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TaxOrigin

Introduction


All about Salary Display

Q1) Is pension income considered as salary?
A1) Yes, However pension received from the United Nation is exempt.
Q2) When is salary income taxable?
A2) Due or receipt basis whichever is earlier
Q3) What is Form 16?
A3) Form 16 is a certificate issued by the employer to its employees under section 203 of Income Tax Act for Tax Deducted at Source (TDS) from the Income chargeable under the head “salaries”.
Q4) How do I Account my Salary from More Than One Employer?
A4) The employee is required to furnish details of the income, under the head "Salaries" due or received from the former/ other employer, to the present/current employer, and also tax deducted at source, in writing and duly verified by him and by the former/other employer in Form 12B (The present/current employer will deduct tax at source based on the aggregate amount of salary including salary received from the former or other employer) though it is not shown on the Form 16 of the current employer.
Q5) What is Perquisite and how it is taxed?
A5) Perquisites are emoluments or benefits received from an employer, in addition to salary, bonus, allowances, gratuity, etc. They include rent-free accommodation, free electricity, gas, or water supply, free domestic servant, etc. provided / paid for by the employer. These perquisites are added to the Salary Income for arriving at the tax liability as per the applicable slabs.
Q6) What are the various deductions allowed under Chapter VI A?
A6) Under 80C, an employee is entitled to deductions for the amounts paid or deposited in the current financial year in the following schemes, subject to a limit of Rs.100, 000/-• Life Insurance Premium
• Contributions to recognized Provident Fund / V P F / P P F
• Contributions to approved Superannuation Fund
• Cumulative Time Deposit A/c with P O
• Contribution to U L I P, 1971 of Unit Trust of India
• Contribution to U L I P of LIC Mutual Funds
• Annuity with Insurance Company
• Subscription to Mutual Fund
• Subscription to deposit schemes of National Housing Bank
• Subscription to NSC & Interest accrued on NSC subscription
• Subscription to deposit schemes of a public sector company engaged in providing long-term finance for construction / purchase of houses in India for residential purposes.
• Repayment of Housing Loan principal
• Infrastructure Bonds
• Children Tuition Fees (education)
• Term Deposits – Scheduled Bank (5 years and more)
• Investments of up to Rs.100,000 under erstwhile section 80 CCC
*checking
Q7) What is the Salary tax limit for A.Y. 2010-11?
A7) Normal slab limit
Q8) Which deductions are allowable under the head of salary?
A8) *Entertainment allowance only for government employees
*Professional tax
Q9) Is Family pension considered as salary?
A9) No, It is taxable under other sources.
Q10) Whether relief u/s 89 & exemption u/s 10(10C) can be granted simultaneously?
A10) No, relief u/s 89 or exemption u/ 10(10C) can be allowed. Both can’t be granted simultaneously.
Q11) Whether house property loss can be claimed as set off against salary income?
A11) Yes, it can be set off.
Q12) Life insurance amount received on maturity along with bonus - is it taxable?
A12) No, it is not taxable.
Q13) Whether partner’s salary is taxable under the head of salary?
A13) No, it is taxable under the head of Profits & gains from business & profession.
Q14) Which is the Place of accrual of salary?
A14) Where the services are actually rendered except Resident & ordinarily resident whose global income is taxable.