Perquisite received by the assessee during the course of carrying on his business or profession is taxable under the head.
Perquisite received by the assessee during the course of carrying on his business or profession is taxable under the head.
B is getting salary of Rs 10,000 per month. His salary is due on last day of every month. Salary of March 2020 was paid on 7 April, 2020. Compute his taxable salary income for the PY 2019-20.
Answers
Salary is the remuneration received by or accruing to an individual, periodically, for service rendered as a result of an express or implied contract. The actual receipt of salary in the previous year is not material as far as its taxability is concerned. The existence of employer-employee relationship is the sine-qua¬non for taxing a particular receipt under the head ‘salaries. ‘For instance, the salary received by a partner from his partnership firm carrying on a business is not chargeable as “Salaries” but as “Profits & Gains from Business or Profession”. Similarly, salary received by a person as MP or MLA is taxable as “ Income from other sources”, but if a person received salary as Minister of State/ Central Government, the same shall be charged to tax under the head “Salaries”. Pension received by an assessee from his former employer is taxable as “Salaries” whereas pension received on his death by members of his family (Family Pension) is taxed as “Income from other sources”.