Salary

wage Concept and Definition   Normally, the term profit signifies the rumination for serve rendered by a person. The person who renders the services is called the employee eon the person who receives the services and pays the consideration is called the employer. The expression meshing nub mankind of race of master and servant between the employer and the employee. This relationship is governed by a contract of employment whether expressed or implied which is absolutely essential in order to revenue enhancement the beat so received under the head Income from Salaries. Thus, a medical exam practiti bingler, an exhort or a chartered considerant not occupied by the employer but positive as a advisor or a retainer cannot be called an employee and the amount so received by such persons will not be taxable under the head Salaries. Further, where such persons argon decreed in a regular job under a contract, verbal or written or implied, then they seduce employees and their remuneration is taxable under the head Salaries.     Sec 17 of the Income Tax Act, 1961, gives an inclusive definition of salary. Broadly, it includes:   a)      Basic Salary; b)      Fees, knowledge and Bonus; c)      Taxable portion of cash allowances; d)      Taxable thought of Perquisites; e)      Retirement Benefits etc.

  Although all the components of salary income are include in salary, there are certain incomes in all(prenominal) of these categories which are either fully dislodge or exempt upto a certain limit. The aggregate of all the above incomes, afterward the exemption(s) available, if an! y, is cognise as Gross Salary. From the Gross Salary, the side by side(p) deductions are allowed u/s 16 of the Act to total at the figure of Net Salary. a)       certainty for cheer allowance u/s 16(ii); b)      Deduction on account of any sum paid towards tax on employment u/s 16(iii).     Tax formulation   Broadly speaking, tax grooming is not a one day show; sort of it is...If you want to get a full essay, order it on our website: OrderCustomPaper.com

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