What is salary income, how to calculate tax?
22 Sep 2022
The points to be noted while considering the salary income.
1. There should be an employer and employee relation in order to consider the salary income.
Ex. Remuneration earned by a director who is also an employee of the company is taxable under the head “SALARY” but remuneration earned by the director who is not an employee of the company is not taxable under the head “SALARY”.
Section 15: Taxability of salary income
1. Due Basic
2. Receipt Basic
Whichever is earlier.
Salary: Basic Salary + *Allowances + *Perquisites + *Profit in lieu of salary
Allowances= The company use to give many allowances such as House rent allowance, shift Allowance, Special Allowance, Leave encasement etc.
Perquisites= any addition benefits provided by employer to employee like car facility, Rent free accommodation, etc
Profit in lieu of salary = Profit instead of salary.
Exemption: Under section 10
1.Allowance (for example)