Salaries

Lecture Notes
 SALARIES

• Salaries mean and include

remuneration in any from due for
personal service as per the contract of
employment or service.
Basis of charge [ U/S 15]

• Any salary due

• Any salaries paid or allowed
• Any arrears of salaries paid or allowed to him in
the previous year by or on behalf of any
employer or a former employer, if not charged to
income tax for any earlier previous year.
 Salaries
• .Wages;
• .Any annuity or pension;
• .Any gratuity;
• .Any fees, commission, perquisites or profit in
lieu of or in addition to any salary or wages;
• .Any advance of salaries;
• .Any payment received by an employee in respect
of any period of leave not availed of by him;
 Salaries U/S 17(1) :

• The annual accretion to the balance to the credit

of an employee participating in a recognized
provident fund to the extent it is in excess of the
prescribed limits.
• Aggregate of the transferred balance to the
account of an employee participating in a
recognized provident fund to the extent taxable
as prescribed under the rules.
• Any contribution made by the central
government to the account of an employee
covered under the pension scheme referred to in
section 80CCD.
 PERQUISITES [U/S 17(2)]

• The term ‘perquisite’ is any casual

emolument, fees or profit attached to an
office or position in addition to salary or
wages.
 PERQUISITES [U/S 17(2)]
• Perquisites includes
• .The value of rent – free accommodation
• .The value of any concession in the
matter of rent
• The value of any benefit or amenity
granted or provided free of cost or at
concessional rate in respect of the
following persons:
• .by a company to an employee who is a
 PERQUISITES [U/S 17(2)]
• .by a company to an employee who is a
director thereof,
• .By a company to an employee being the
person who has substantial interest in the
company.
• .By an employer ( including a company)
to an employee not covered under (a) and
(b) above but having annual salary of Rs
50000 or more
 PERQUISITES [U/S 17(2)]
• .Any sum payable by the employer in
respect of any obligation but for which
payment would have been payable by the
assessee himself.
• .Any sum payable by the employer
whether directly or through a fund to
effect an assurance on the life of an
assessee .
 PERQUISITES [U/S 17(2)]
• the value of any other fringe benefit or
other benefit as may be prescribed ( i.e.
interest free loan, Concessional loan from
employer etc.)
 PROFIT IN LIEU OF
SALARY [ U/S 17(3) ]
• profits in lieu of salaries include:
• Any compensation due or received by an employee
from his employer in connection with the termination
of the employment or due to modification of the terms
and conditions of his employment.
• Payments from an employer or former employer from
provident fund or such other funds, excluding the
amounts exempt from tax under Section 10 and
excluding the amounts of contribution made by the
assessee and the interest thereon.
 PROFIT IN LIEU OF
SALARY [ U/S 17(3) ]
• Any sum received under a Keyman Insurance
Policy including the sum allocated by way of
Bonus on such policy.

• Amounts due to or received, whether in

Lumpsum or otherwise by any assessee from any
person.