State the income chargeable under the head “Salary”. Explain in detail the concept of Perquisites and their tax treatment under the Income-tax Act, 1961. (More detailed analysis)
Q. 4 – State the income chargeable under the head “Salary”. Explain in detail the concept of Perquisites and their tax treatment under the Income-tax Act, 1961. (More detailed analysis) ⭐ A. Meaning of Salary (Section 17(1)) The term Salary under the Income-tax Act is very wide . It includes every amount — whether monetary or non-monetary — received by an employee from an employer for services. Salary includes 3 main things: Salary actually received Salary due, whether received or not Arrears of salary ✔ Even advance salary is taxable. ✔ Even if salary is forfeited , it remains taxable once due. ✔ Salary must arise from employment relationship . ⭐ B. Income Chargeable Under the Head “Salary” (Section 15) Section 15 lays down the following: 1. Salary Due (Whether Paid or Not) If salary becomes due in a particular year, it is taxable even if not received . Example: Salary for March due on 31 March, paid in April → Taxable in March year. 2. Salary Received ...