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Thread: Meaning of Salary, define salary, definition of salary

  1. #1

    Default Meaning of Salary, define salary, definition of salary

    As per section 17 (1) of the Income Tax, Salary includes:

    i) wages;
    (ii) any annuity or pension;
    (iii) any gratuity;
    (iv) any fees, commissions, perquisites or profits in lieu of or in addition to any salary or wages;
    (v) any advance of salary;
    (va) any payment received by an employee in respect of any period of leave not availed of by him;
    (vi) the annual accretion to the balance at the credit of an employee participating in a recognised provident fund, to the extent to which it is chargeable to tax under rule 6 of Part A of the Fourth Schedule; and
    (vii) the aggregate of all sums that are comprised in the transferred balance as referred to in sub-rule (2) of rule 11 of Part A of the Fourth Schedule of an employee participating in a recognised provident fund, to the extent to which it is chargeable to tax under sub-rule (4) thereof;
    (viii) the contribution made by the Central Government [or any other employer] in the previous year, to the account of an employee under a pension scheme referred to in section 80CCD;

  2. #2

    Default Meaning of Salary, define salary, definition of salary, meaning of salary for various purposes, what is included in salary, salary for HRA

    In addition to above, it must be understood that for the purpose of valuation of various allowances & perquisites, the components or break of salary may vary as under:

    SALARY FOR THE PURPOSE OF HRA EXEMPTION:

    Basic+DA (if terms of employment provide)+fixed percentage of commission on turnover as per terms of employment.

    No other allowance or perquisite is added in salary.

    Salary is taken on due basis only.

    Salary is taken for the period during which the rental accomodation is occupied.

  3. #3

    Default Salary for the purpose of entertainment allowance exemption

    Salary for the purpose of entertainment allowance exemption

    No allowance or perquistes or benefits are included in salary for this purpose.

  4. #4

    Default Meaning of salary for the purpose of valuation of rent free accomodation or accomodation on concessional rate

    Meaning of salary for the purpose of valuation of rent free accomodation or accomodation on concessional rate

    For the aforesaid purposes, salary includes:

    a) basic salary;

    b) dearness allowance/pay, provided it enters into the computation of superannuation or retirement benefits;

    c) bonus;

    d) commission;

    e) fees;

    f) all other taxable allowances (but excluding the portion not taxable)

    g) any monetary payment

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