Income from

SALARIES

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27, 2024
 Heads of Income

Sec.14
A) Salaries
B) Income from House property
C) Profits and Gains of business
or profession
D) Capital Gains
E) Income from other sources
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Friday, September
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 Income from Salaries

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Friday, September
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 Salaries

Sec.15, Sec.16 and

Sec.17
Sec.15 – Chargeability
Sec. 16 – Deductions
Sec. 17 – Meaning of
Salary
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Friday, September
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 What is Salary?

a fixed amount of money agreed every year as pay

for an employee, usually paid directly into his or
her bank account every month:
an annual salary of £40,000
His net monthly salary is €2,500.
She's on quite a good/decent salary in her present
job.
He took a drop in (= accepted a lower) salary
when he changed jobs.
a ten percent salary increase
[https://dictionary.cambridge.org/dictionary/
english/salary]
Friday, September
27, 2024
 S.15 Salaries

15. Salaries.—The following income shall be

chargeable to income-tax under the head “Salaries”—
(a) any salary due from an employer or a former
employer to an assessee in the previous year,
whether paid or not;
(b) any salary paid or allowed to him in the previous
year by or on behalf of an employer or a former
employer though not due or before it became due to
him;
(c) any arrears of salary paid or allowed to him in
the previous year by or on behalf of an employer or a
former employer, if not charged to income-tax for any
earlier previous year.
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 S.15- Salaries

Explanation 1[1.]—For the removal of doubts, it is

hereby declared that where any salary paid in
advance is included in the total income of any
person for any previous year it shall not be
included again in the total income of the person
when the salary becomes due.

2[Explanation 2.—Any salary, bonus, commission

or remuneration, by whatever name called, due to,
or received by, a partner of a firm from the firm
shall not be regarded as “salary” for the purposes
of this section.]
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27, 2024
 S.15 - Income from Salary

Any amount due to or received by an

employee from an employer and
falling within the purview of the
meaning of the term Salary is
chargeable to tax under the head
“INCOME FROM SALARIES”
Salary is chargeable to tax either on
due basis or on receipt basis
whichever is earlier
The place of accrual of salary is the
place where the services are rendered
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 S.17 - Meaning of Salary

S.17(1) - Salary

S.17(2)- Perquisites

S.17(3) - Profit in
Lieu of salary

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 S.17 – Salary

17. “Salary”, “perquisite” and

“profits in lieu of salary” defined.
—
For the purposes of sections 15 and
16 and of this section,

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27, 2024
S.17 (1) - Meaning of Salary

Salary to include –
wages,
Any annuity or
pension
Any gratuity
Any fees,
commissions,
perquisites in
lieu of or in
addition to any
salary or wages
Friday, September
27, 2024
 Wages

Term “wages” means fixed regular

payment earned for work or services.
The words “wages”, “salary”, “basic
salary” are used interchangeably.
Payments in the form of Bonus,
Allowances etc. made to the
employee are also included within the
meaning of salary.

Friday, September
27, 2024
 Annuity
Annuity’ is treated as salary.
Annuity is a sum payable in respect of a particular year.
It is a yearly grant. If a person invests some money entitling
him to series of equal annual sums, such annual sums are
annuities in the hands of the investor.
Annuity received by a present employer is to be taxed
as salary. It does not matter whether it is paid in pursuance of
a contractual obligation or voluntarily.
Annuity received from a past employer is taxable as
profit in lieu of salary.
Annuity received from person other than an employer
is taxable as “income from other sources”.

Friday, September
27, 2024
 Pension

Concise Oxford Dictionary defines

‘pension’ as a periodic payment
made especially by Government or a
company or other employers to the
employee in consideration of past
service payable after his retirement.

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 Types of Pension

(1) Uncommuted Pension: Uncommuted pension

refers to pension received periodically. It is fully
taxable in the hands of both government and
nongovernment employees.
(2) Commuted Pension: Commutation means inter-
change. Commuted pension means lump sum
amount taken by commuting the whole or part of
the pension.
Many persons convert their future right to
receive pension into a lumpsum amount
receivable immediately.
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Friday, September
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 Gratuity

Gratuity is a voluntary payment made by an

employer in appreciation of services rendered by
the employee. Now-a-days gratuity has become a
normal payment applicable to all employees.

Payment of Gratuity Act, 1972 is a statutory

recognition of the concept of gratuity. Almost all
employers enter into an agreement with
employees to pay gratuity.

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Friday, September
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 Employees get ‘allowances &
Perquisites

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 Allowances - Perquisites

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 S.17(1) - Meaning of Salary

Any advance of
salary- not
advance against
salary
Leave encashment
Annual accretion to
recognized PF
Contribution made
by Central Govt to
pension scheme
under Sec.80CCD
80CCD. Deduction in respect of contribution to
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27, 2024
pension scheme of Central Government
 Leave Salary or Leave Encashment

Generally, employees are allowed leaves during

the period of service.
Employee may avail such leaves or in case the
leaves are not availed, then the leaves may either
be lapsed or accumulated for future or allowed to
be encashed every year or at the time termination/
retirement. The payment received on account of
encashment of unavailed leave would be form part
of salary.
However, section 10(10AA) provides exemption in
respect of amount received by way of encashment
of unutilised earned leave by an employee at the
time of his retirement whether on superannuation
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27,or otherwise
2024
Friday, September
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Friday, September
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 S.17(2) - Perquisites

Benefits in
additions to normal
salary to which the
employees has a
right by virtue of
his employment

Attached to office
or position

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27, 2024
 Perquisites

Value of rent-free
accommodation,
any concession
provided;
Value of any benefit
or amenity
provided free of
cost

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S.17(3) - Profits in lieu of Salary

Compensation received in connection

with the termination of service or
modification of the terms and
conditions of employment
Any amount received by the assessee
from employer;
Sum received on key man insurance
policy

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 Income from Salary

Foregoing of salary- Tax on salary

is on due basis. Therefore, the salary
forgone is taxable in the hands of the
employee. However, if employee
foregoes his salary before it accrues,
then it is not taxable;
Surrendered salary – salary
surrendered to Central Govt will not
be included in computing the income.
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 Employer- Employee

There must be
employer and
employee
relationship either in
the present or past;

“fruits of
employment”

“Master – Servant”

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27, 2024
 Allowances

Fixed amount of money payable for

particular requirement connected
with the service rendered
May be given for personal purposes
or for official purposes
Allowances may be fully exempted,
fully taxable, partially exempted
and special allowances.

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Taxable Value of Allowances

Fully Taxable cash

allowances
Partially exempt
cash allowances
Fully exempt cash
allowances

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Friday, September
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Friday, September
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 Fully Taxable Allowances

DA
CCA
Tiffin/Lunch Allowance
Non-Practicing Allowance
Warden or Proctor Allowance
Deputation Allowance
Overtime Allowance
Fixed Medical Allowance
Servant Allowances
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Partially Exempt Allowances

HRA
Entertainment Allowance
Special Allowances –
Children Education Allowance –
Rs.100 per child for (max. 2)
Children Hostel Allowance – Rs. 300
per child (max 2);
Transport Allowance
Out of station allowance
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27, 2024
 Fully Exempt Allowances

Foreign Allowance- being Indian

citizen posted out of India for
rendering Government services;
Allowance to High Court and Supreme
Court judges ;
Allowances from UN organization to
its employees are fully exempt from
tax;

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 UN Allowances

Allowance received from United

Nations Organisation (UNO):
Allowance paid by the UNO to its
employees is not taxable by virtue of
section 2 of the United Nations
(Privileges and Immunities) Act, 1947.

Friday, September
27, 2024
 Legal Issues?

Salaries of Judges?
Salaries of MLA and MP ?
Salary received by suspended
employee?
Incentive bonus to Development
officers of LIC’s
Honorarium received by visiting
doctors?
Friday, September
27, 2024
Salaries of Judges?Justice Deoki Nandan
Agarwala v UOI 237 ITR 872

Salary of HC or SC
judges taxable
under the head
salary although they
have no employer;
Art.125 and 221 of
the Constitution
deal with Salaries of
SC & HC & expressly
state that what
judges receive are
salaries
Friday, September
27, 2024
 Justice Deoki Nandan Agarwala vs Union Of
India & Anr on 4 May, 1999

Whether the salary of a

Judge of the High Court
of a State payable
under cl.(1) of Art. 221 of
the Constitution and the
salary of a Judge of the
Supreme Court payable
under cl.(1) of Art. 125 is
taxable by a law made
by Parliament under
Entry 82 of List I of the
Seventh Schedule.
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Allowance to High Court Judges

Any allowance paid to a Judge of a High Court under section

22A(2) of the High Court Judges (Conditions of Service) Act,
1954 is not taxable
Compensatory allowance under Article 222(2) of the
Constitution:

Compensatory allowance received by judge under Article

222(2) of the Constitution is not taxable since it is neither
salary not perquisite.

Sumptuary allowance: Sumptuary allowance given to High

Court Judges under section 22C of the High Court Judges
(Conditions of Service) Act, 1954 and Supreme Court Judges
under section 23B of the Supreme Court Judges (Conditions
of Service) Act, 1958 is not chargeable to tax.
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 Salaries of MLA and MP ?CIT v Shiv
Charan Mathur 306 ITR 126 (Raj)

MP or MLA is not a
Government
employee and
therefore,
remuneration
received by him is
not taxable as
Salary

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27, 2024
C I T Ajmer vs Shiv Charan Mathur Bhilwara on
28 August, 2008

……;from reading of this section 15, it is clear, that

fundamental requirement, for attracting this section
is that, there should be relationship of employer and
employee, whether in existence, or in the past.
Obviously, and inherently, in the very nature of
things, for bringing about such relation ship, the
assessee, being the person concerned, should have
been employed by the employer, and as a necessary
corollary, the employer should have right to
discharge or terminate the employee.

Friday, September
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 C I T Ajmer vs Shiv Charan Mathur
Bhilwara on 28 August, 2008

This basic ingredient is missing in the

case of MLAs and MPs, as they are
not employed by anybody, rather,
they are elected by the public,
forming their election constituencies,
and it is consequent upon such
election, that they acquire
constitutional position, and discharge
constitutional functions and
obligations.
Friday, September
27, 2024
 Pay and Allowances of Chief
Minister?

Salary ;
It cannot be taxed
under the head
income from other
sources;
Lalu Prasad v CIT
(2009) 316 ITR 186(Patna)

Friday, September
27, 2024
Lalu Prasad vs Commissioner Of Income
Tax on 11 November, 2008

"The Chief Minister is not a political

post. It is a constitutional post. The AO
had rightly stated that the fact that the
assessee enclosed a Service Certificate
to the return wherein Form No. 16
shows his income as pay and
allowances from the Government. He
could not have classified this as
professional income to claim the
expenses
Friday, September
not related to this income.
27, 2024
 Lalu Prasad vs Commissioner Of Income Tax
on 11 November, 2008

It is not upto the assessee to reclassify the

source of his income especially when
documentary proof exists. In the case of PV
Narsimha Rao vs. State it has been held that
the Members of Parliament and Legislative
Assembly are public servants and the
assessee being a Chief Minister had been
drawing salary from the Government which
has been his claim for constitutional post of
chief ministership. We, therefore, do not find
merit in the Cross Objection filed by the
assessee
Friday,
27, 2024
September which is dismissed".
Friday, September
27, 2024
 Incentive bonus to Development officers of
LIC’s

Forms part of the

Salary

H M Pareek v CIT
257 ITR 790

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27, 2024
 Salary received by suspended
employee?

Regional Director v
Popular
Automobiles (1997)
7 SCC 665

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27, 2024
 Honorarium received by visiting
doctors?

Employer and
employee
relationship?

ITO v Ranjan Mehta

33 TTJ 398 (Ahd)

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27, 2024
Principal – Agent - Agent receives
Salary?

No
Remuneration
awarded to the
agent is the one
falling under Profits
or Gains of
Business
Lakshminarayan Ram
Gopal v Govt of
Hyderabad 25 ITR 449
(SC)
Friday, September
27, 2024
 Expenses incurred by employer defending
employee against criminal charge

Company defending its

director on criminal charge
and incurring expenditure
thereon by way of legal
expenses;
Whether benefit to director
and chargeable to tax as
part of income of director?
Rendell v Went ( Inspector of
taxes) 58 ITR 73 (HL)
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27, 2024
 Rendell v Went ( Inspector of taxes) 58 ITR 73 (HL)

A motor car belonging to a company while

being driven by a director of the company
on the company's business, met with an
accident and a pedestrian was killed.
The director was charged with causing
death by reckless or dangerous driving. His
defence was undertaken by the company
and it amounted to pounds 641.
The director was acquitted and in his assessment to income-
tax this amount sought to be taxed as benefit accruing to
him within section 161(1) of the I.T. Act, 1952 (U.K.).

Friday, September
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 Rendell v Went ( Inspector of taxes) 58 ITR 73 (HL)

Ultimately, the matter went to the

House of Lords and the view taken
was that the expenditure amounted
to a benefit, the money value of
which was liable to tax in his hands.
The contention that since it suited
and was to the advantage of the
company to make that expenditure,

Friday, September
27, 2024
 Rendell v Went ( Inspector of taxes) 58 ITR 73 (HL)

it was not advantageous to the

director, was repelled and it was held
that the money spent by the
company "bought nothing except the
appellant's defence, no part of it was
spent on something that did not
benefit him”

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27, 2024
Embezzled money – Salary ?

The fraudulent
appropriation of
funds or property
entrusted to a
person’s care but
actually owned by
someone else

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27, 2024
Embezzled money – Salary ?

Taxable
[ CIT v Troilakya
Chandra Bora
2003 128 TAXMANN 344 ]

If embezzled
money returned ?
Can it be
considered as
‘borrowing’?
Friday, September
27, 2024
 Deductions
16. Deductions from salaries.—The income chargeable under
the head “Salaries” shall be computed after making the
following deductions, namely:—
3[4* * * * *
5[(ia) a deduction of 6[fifty thousand] rupees or the amount of
the salary, whichever is less;]
(ii) a deduction in respect of any allowance in the nature of an
entertainment allowance specifically granted by an employer to
the assessee who is in receipt of a salary from the Government,
a sum equal to one-fifth of his salary (exclusive of any
allowance, benefit or other perquisite) or five thousand rupees,
whichever is less;]
7[(iii) a deduction of any sum paid by the assessee on account
of a tax on employment within the meaning of clause (2) of
article 276 of the Constitution, leviable by or under any law.]
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 Deductions (Sec.16)

The income chargeable under the

head ‘Salaries’ shall be computed
after making the following deductions
from gross salary-
i) standard deduction ( no longer
valid- Finance Act, 2005 -
reintroduced in 2018)
ii) deduction for entrainment
allowance
iii) deduction for professional tax
Friday, September
27, 2024
 Standard Deduction

When Salary income does not exceed

Rs.5 lac – a sum equal to 40% of
gross salary or Rs.30,000 (RS.50,000-
00 now) whichever is less, shall be
allowed as standard deduction ;
When salary income exceeds Rs.5 lac
Rs.20,000 shall be allowed as
standard deduction (withdrawn now)

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 Standard deduction from 2018

The Standard Deduction Under

Section 16 is allowed under Section
16 (ia).
It has been replaced by the transport
allowance of Rs. 19,200 and the
medical reimbursement of Rs.
15,000.
In the 2018 budget, the finance
minister introduced this.
Friday, September
27, 2024
 Entertainment Allowance
Not eligible for exemption but qualifies
only as deduction
Available only to Government employees
Deduction Allowable least of the
following-
(i) Rs.5000 or (ii) 1/5th of the salary (basic)
or (iii) actual entertainment
allowance received for the previous
year
Least of the above deductible
Deduction from basic salary only
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 Income from Salary

Friday, September
27, 2024
 Compute salary income for AY
2012-13

Mr. A who is in Government services

receives Rs.4,000-00 pm as basic
salary; Rs.500-00 as dearness
allowances and Rs.600-00 as
entrainment allowances;

Friday, September
27, 2024
 Compute salary income for AY 2012-13

Mrs. X who is the executive director

of a private company is in receipt of
Rs.25,000-00 pm as basic salary and
Rs.5,000-00 pm towards entrainment
allowances

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27, 2024
 House Rent Allowance

Under Sec.10(13A) the least of the

following will be allowed as exemption; (see
next slide)

No HRA deduction if employee lives in his own house

Salary for this purpose means basic salary, dearness

allowance, if provided in terms of employment and
commission as a fixed percentage of turnover.

3. Relevant period means the period during which the said

accommodation was occupied by the assessee during the
previous year.

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HRA- Partly exempt(Select the least
for exemption)

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27, 2024
 Problem?

X is in receipt of Rs.1,20,000 as basic

salary and Rs.60,000 as DA for the
year 2013-14. He had received
Rs.30,000 as HRA from his employer.
He pays Rs.36,000 as rent for the
house occupied by him.
Determine the taxable HRA if he
resides in (i) Delhi (ii) Coimbatore

Friday, September
27, 2024
 Problem?

X, an employee of ABC Ltd., resides in

Madurai. He receives a basic salary of
Rs.5,000 p.m, Rs.2000 as DA and Rs.1,000
as HRA p.m. X stays in his father-in-law’s
house for which he does not pay any rent.
He spends Rs.18,000 p.a on the
maintenance of the house.
X claims deduction under Sec.10(13A).
Is the claim of X correct?
If x rents a house for Rs.1,200 for 6
months, calculate the deduction.
Friday, September
27, 2024
 Profession Tax

Deduction is allowed in respect of any

sum paid by the assessee on account
of tax on employment within the
meaning of Art.276(2) of the
Constitution of India
If PT is paid by employer, the amount
should be included in perquisite and
then deducted under Sec.16(iii)

Friday, September
27, 2024
Compute the salary income for the
assessment year 2005-06
Mr.A who is in Government service receives
Rs.4,000p.m as basic salary; Rs.5000 p.m
as dearness allowance and Rs.600 p.m as
entrainment allowance
Mrs.X who is the executive director of a
private company is in receipt of Rs.25,000
p.m as basic salary and Rs.5,000 p.m
towards entrainment allowance
Mr.Y is employed in a multinational
company at Mubai for a salary of Rs.1 lac
p.m. Value of taxable requisites is
Rs.1,60,000 for the year. He pays
profession
Friday,
27, 2024
September tax of Rs.2,500 for the year
 Problem?

Mr.X joins a company on 1-6-2000 on

a salary of Rs.10,000 p.m
From 1-12-2004 his salary is
increased to Rs.15,000 p.m
Compute his basic salary for the AY
2005-06 assuming that (a) salary falls
due on last day of each month (b)
Salary falls due on first day of next
month
Friday, September
27, 2024
 Retirement Benefits

Gratuity

Pension

Provident Fund

Friday, September
27, 2024
 Gratuity

Payment made by
the employer to an
employee in
appreciation of the
past services
rendered by the
employee;

Friday, September
27, 2024
 Gratuity

Gratuity can either

be received by:
(1) employee
himself at the time
of retirement
(2) legal heir on the
event of the death
of the employee

Friday, September
27, 2024
 Gratuity – employee category

Exemption under S.10(10)

Government employee and

employees of local authorities
Employees covered under Payment of
Gratuity Act, 1972
Other employees

Friday, September
27, 2024
 The Payment of Gratuity Act,
1972
Applies to factories, mines, plantations and
other establishments employing ten or more
persons.
On completion of five years service, the
employees are entitled to payment of
gratuity @15 days wages for every
completed year of service or part
thereof in excess of six months subject
to a maximum of 10 lakh.
The current maximum limit is applicable from 2010 .

Friday, September
27, 2024
 Gratuity

Friday, September
27, 2024
 Gratuity amount for other
employees

Gratuity - (15 * last drawn salary

* the working tenure) / 30.
For example, you have a basic salary
of Rs 30,000. You have rendered
continuous service of 7 years and the
employer is not covered under the
Gratuity Act.
Gratuity Amount = (15 * 30,000 * 7) /
30 = Rs 1,05,000.
Friday, September
27, 2024
 Gratuity

Exemption under Sec10(10)

Any gratuity received by an employee
covered by the Payment of Gratuity Act,
1972 is exempt from tax to the least of the
following:
1) Rs.10,00,000 (now Rs.20,00000)( up to
2010 - 3,50,000) or
2) 15 days salary (out of 26 days) based on
last drawn salary for each completed year
of service or part of the year in excess of 6
months;
3)September
Friday, gratuity actually received
27, 2024
In case of any other employee

Gratuity received by employee on

retirement, death, termination or
resignation is exempt from tax to the
extent of least of the following
(1) Rs.10,00,000-00 (now
Rs.20,00000) (Rs.3,50,000 up to 2010)
(2) ½ month salary for each
completed year of service ( fractions
have to be ignored);
(3) Gratuity actually received
Friday, September
27, 2024
 Gratuity from more than
one employer
If Gratuity is received from more than
one employer in the same previous
year, by an employee, the limit of
Rs.10,00,000-00 would apply to the
aggregate of gratuity received from
one or more employees;

Friday, September
27, 2024
 Gratuity

Any death-cum-
retirement gratuity
received by
Government
employees or
employees of local
authorities fully
exempt;

Friday, September
27, 2024
Friday, September
27, 2024
 Problem?

Mr.Shyam an employee of AB Ltd.,

receives Rs.90,000 as gratuity under
the Payment of Gratuity Act, 1972.
He retires on Aug 15, 2004 after
rendering service for 32 years and 4
months. The last drawn salary was
Rs.3,250 p.m.
Calculate the amount of gratuity
chargeable to tax.
Friday, September
27, 2024
G, who has been in part time employment with R Ltd., and S
Ltd., submits the following information. Compute the gratuity
exemption under Sec.10(10)

Friday, September
27, 2024
 Problem?

Ms.Uma, not being covered by the

Payment of Gratuity Act, 1972 retires
during 2004-05 from SR Private Ltd.,
and receives Rs.45,000 as gratuity
after a service of 40 years 11 months.
Her average monthly salary during the
last 10 months of service was Rs.2,200.
Determine the taxable gratuity in her
case.
What would be your answer if she
retired after serving for another 2
Friday, September
months?
27, 2024
 Pension

Periodic payment
received by an
employee from
former employer
for past service;

Friday, September
27, 2024
 Pension

In case of non-resident
or not ordinarily
resident of India,
pension accruing to
him or received by
him abroad is not
chargeable to tax.
Family pension
received by a widow is
chargeable as income
from other sources.
Friday, September
27, 2024
 Uncommuted & Commuted
Pension

Uncommuted pension
refers to pension
periodically received by
the employee;

Uncommuted pension is
taxable as salary under
Sec.15 in the hands of
both Government and
non-government
employees.
Friday, September
27, 2024
 Commuted & Uncommuted
pension

Commuted pension
means lump sum
amount taken by
commuting the
pension or part of
the pension.

Friday, September
27, 2024
Commuted Pension- Exemption

Any commuted pension received by a

Government employee is wholly exempt
from Tax
A non-government employee can avail
exemption to the following extent
(i) if the employee is in receipt of
Gratuity,1/3rd of commuted pension which
he would have received had he commuted
the whole pension
(ii) if the employee is not in receipt of
Gratuity , ½ of the amount of commuted
pension
Friday, September
which he would have received
27, had
2024 he commuted the whole of the pension
Friday, September
27, 2024
 Problem?

On 30th June 2004, Mr.Sathosh retires

from Central Govt service and gets
pension of Rs.3,000 p.m up to 31-3-
2011. With effect from1-2-2012 he
gets his 1/3rd of pension commuted
for Rs.1,20,000.
Determine the gross amount of
taxable pension includible in salary
income for the assessment year
2012-13.
Friday, September
27, 2024
 Mr.Santhosh

Friday, September
27, 2024
 Problem?

Mr.Kamath retires from X Ltd., on 31-

10-2010. He gets pension of Rs.2,000
p.m up to 31-10-2011. With effect
from Nov1, 2011 he gets 60% of
pension commuted for Rs.30,000. He
is not in receipt of gratuity.
Determine the gross amount of
taxable pension includible in salary
income for the assessment year
2012-13.
Friday, September
27, 2024
 Mr.Kamath

Friday, September
27, 2024
 Provident Fund

Friday, September
27, 2024
 Provident Fund

Provident Fund Scheme is a welfare

scheme for the benefit of employees;
Both employee and employer
contributes to the fund;
Contributions are invested in
securities & interest earned credited
to PF account;
At the time of retirement
accumulated balance is given to
employee;
Friday, September
27, 2024
 Provident Funds

4 types
Statutory Provident Fund- set under PF Act,
1925 & maintained by Government and its
instrumentalities;
Recognized Provident Fund – set up under
Employee’s PF and Miscellaneous Provision
Act, 1952 & maintained by private sector
employees;
Unrecognized PF- not recognized by CIT
Public PF

Friday, September
27, 2024
Friday, September
27, 2024
Exemptions Sec.10(5)-Sec.10(14)

Value of travel concession or

assistance – received by an individual
from his employer or former
employer for himself and his family in
connection with his proceedings
(1) on leave to any place in India
(2) to any place in India after
retirement from service or after the
termination of his service shall be
exempt
Friday,
27, 2024
September
Fringe Benefits (2006-2010)

Any privilege, service, facility or

amenity, directly or indirectly
provided by an employer to his
employees;
Any free or concessional ticket
provided to the employees and their
family members for private journeys;
Any contribution to an approved
superannuation fund.
Friday, September
27, 2024
 Fringe Benefits

Taxable in the hands of employer –

entertainment expenditure, travel, use of
hotel, boarding and lodging, use of
telephones, scholarships, expenditure on
conferences etc
Taxable in the hands of employee –
interest free loan or concessional loan,
use of movable assets or transfer of
movable assets;
Refer to
Friday, September
27, 2024
S.115WM
Friday, September
27, 2024
 PROBLEMS

Friday, September
27, 2024
 Problem

Mr. A, an employee instructs his

employer that he is not interested in
receiving the salary for April 2017
and the same might be donated to a
charitable institution.
Is the salary amount exempted?

Friday, September
27, 2024
 Problem

Sujatha, an actress, is employed in

Chopra Films, where she is paid a
monthly remuneration of ` 2 lakh.
She acts in various films produced by
various producers. The remuneration
for acting in such films is directly paid
to Chopra Films by the different
producers.
Is Sujatha’s remuneration chargeable
asSeptember
Friday, Salary?
27, 2024
 Problem

Mr. A, a citizen of India is posted in

the United States as our Ambassador.
He renders his services outside India.
He also receives his salary outside
India. He is also a non-resident.
Question is whether he can claim
exemption in respect of his salary
paid by the Government of India to
him outside India.?
Friday, September
27, 2024
 Problem

A draws his salary in advance for the

month of April 2018 in the month of
March 2018 itself;
Will this be charged to Tax fo the year
, 2017-18 I or 2018-19.?

Friday, September
27, 2024
 Problem
Mr. Raj Kumar has the following receipts from his
employer:
(1) Basic pay ` 3,000 p.m.
(2) Dearness allowance (D.A.) ` 600 p.m.
(3) Commission ` 6,000 p.a.
(4) Motor car for personal use (expenditure met by
the employer) ` 500 p.m
(5) House rent allowance ` 900 p.m.
Find out the amount of HRA eligible for exemption
to Mr. Raj Kumar assuming that he paid a rent of `
1,000 p.m. for his accommodation at Kanpur. DA
forms part of salary for retirement benefits
Friday, September
27, 2024