Question

50515-II / Unit-II Q.2. वेतन से क्या आशय है ? वेतन एवं वेतन के स्थान पर लाभ में क्या अंतर है? वेतन के स्थान पर लाभ में क्या-क्या शामिल है? What is meant by salary ? What is difference between salary and profits in lieu of salary ? What are included in profits in lieu of salary? अथवा OR​

Answer 1

Answer:

Concept:

Profit in lieu of salary are payments received or owed to an employer in addition to wages or salary known as "profit in lieu of salary". Since the definition of salary includes profit instead of salary, it becomes taxable under the head 'income from other sources'.

Explanation:

Salary is a form of regular payment from the employer to the employee, which can be specified in the employment contract. This is in contrast to piecework wages, where each job, hour or other unit is paid separately, rather than on a periodic basis. From the point of view of business management, wages can also be viewed as the costs of acquiring and maintaining human resources for operations and are then called personnel costs or labor costs. In accounting, wages are recorded on wage accounts.

Profits in lieu of wages are payments that an employee receives in addition to their regular wages. Benefits in lieu of salary may include monetary or other forms of compensation. Profit in lieu of wages is taxable under the Income Tax Act and must be declared when filing a tax return. In this article, we provide a description of the concept of profit instead of wages.

According to section 17(3) of the Income-tax Act, 1961, "profits in lieu of salary" include

1. Any amount payable or received as compensation in respect of s

• Termination of employment, or

• Adjustment of employment conditions

2. Payments received from an unaccounted for pension fund, i.e. employer and employee contribution and interest accrued therefrom, will be taxable.

3. Any amount received under an insurance contract concluded by the employer for the life of the employee. It includes any amount provided as a bonus on such policy.

4. Any amount due or received by an employee, whether lump sum or otherwise,

• Before starting work, or

• After termination of employment.

5. Any other amount received by the employee from the employer shall be treated as profit in lieu of wages unless the amount is specifically exempted under the Income Tax Act.

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