Salary And Perquisites In Indian Tax System
Salary is a different story. Tax is required to be paid on salary due from an employer whether paid or not, received in advance though not due and also on arrears of salary paid.
Salary includes wages, fees, commissions, perquisites, profites in lieu of, or, in respect of encashment of leave etc. It also includes the annual accrection to the employee's account recognized provident fund in excess of 12% of the salary of the employee, along with interest applicable, shall be included in the income of the employee.
Profits in lieu of salaryincludes amount received in lump sum or otherwise, prior to employment (temptation to switch jobs) or after cessation of employment (do not join a competitor or divulge sensitive information). It will not include interests on contributions or any sum received, including bonus, under keyman insurance.
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