Computation of "Gross Salary" Income

1.1.      WHAT IS “ GROSS SALARY”  AND HOW IT IS COMPUTED ?

Any amount received by an Employee from an Employer is known as Salary. To receive / give salary, there was to be an Employee-Employer relationship.

What is GROSS SALARY according to Income-Tax ?

GROSS SALARY means :

  1. Basic Salary or Wages, Bonus, Pension, Gratuity (beyond exempted limit), Leave Salary or encashment, Advance Salary,  Salary arrears, Fee or Commission, Remuneration for extra work,  Ex-gratia, Award for excellence etc.

  2. Allowances such as House Rent Allowance, Dearness Allowance, City Compensatory Allowance, Children’s Education Allowance, Conveyance Allowance, Fixed Medical Allowance and any other Special  Allowances.

  3. Perquisites - viz., Rent Free Accommodation, Amount spent or paid by the Employer on behalf of the Employee in respect of Gas, Electricity, Water Charges, Children’s School Fee, Club Fees, etc.

  4. Benefit received in place of Salary which includes Retrenchment Compensation (Amount given to an employee when his services are no more required).

  5. Pension received from former Employer is taxable as “Salaries”. However, Family Pension is taxed as income from other sources and is eligible for deduction up to Rs.15,000 or 33.33% whichever is less u/s 57 (ii a).

However Gross Salary does not include :
(1)  Retirement Gratuity / Death Gratuity u/s 10(10)
(2)  Sumptuary Allowance
(3)  Medical treatment Reimbursement (with restrictions)
(4)  Leave Travel Concession
(5)  Uniform Allowance
(6)  Leave encashment at retirement u/s 10(10AA)
(7)  Free Meals / Refreshment  provided during office hours. How Salary is Computed :

This can be depicted in the form of Chat given below

Computation of "Gross Salary" Income
 
MORE TOPICS ...
Allowances Under Section-10 & 17(3) under Head 'Salary' Income
Chart Showing Computation of 'Salary' Income
Computation of 'Gross Salary' Income
Computation of 'Net Salary' Income :
Deduction under Chapter VI-A

Retirement Benefits

1.       Major Retirement benefits gets by the Employee

2.       Tax Treatment of ‘Leave Encashment’

3.       Tax Treatment of ‘Gratuity’

4.       Tax Treatment of ‘Pension’
Other Benefits & Facilities gets by the Salaried Employees
Arrear of Salary and relief under section 89(1)
Deduction Under Section 80 C ( How to Find Out)
Exemption Specified in Income Tax Rules in 'Salary' Income
'Perquisies' and 'Income Tax - ( Taxable and Exempted) - Salary :
Computation of 'Profit in Lieu of Salary' (Sec-17(3)
Computation of Income Under Head 'Salaries' under Income Tax
 
 
 
 
GST (India)
F.A.Q. on GST
GST Forms Download
GST Compensation Law
GST Enrollment Process
GST Law & Act.
GST Rules
GST Schedule ( I to V )
IGST Law & Act.
GST A Practical Knowledgebase
Filing GST Return
Enroll & Registration with GST
GST Office Tool to File GST Return
LIBRARY @ Tax Management
TAX & INVESTMENT GUIDE FOR "NRI"- Non-Resident Indians !
GUIDE & FAQ @ TAX
GRAPHICAL PRESENTATION @ TAX
TIPS & TRICKS @ TAX
MANAGERIAL & FINANCIAL DECISIONS @ TAX
5 GOLDEN RULES OF TAX PLANNING
FAMILY TAX PLANNING
DEDUCTIONS FROM YOUR INCOME
EXEMPTED INCOMES
HUF - FORMATION, MANAGEMENT & TAX PLANNING
COMPUTATION OF GROSS TOAL INCOME
INCOME TAX @ GLANCE
MULTIPLE KNOWLEDGEBASE ON TAX
51 TIPS ON TAX PLANNING
APPEALS UNDER INCOME TAX
ASSESSMENTS
PENALTIES UNDER IT DEPATMENTS
TAX SAVING SCHEMES
TAX READY RECKONER
TAX RATES
PROSECUTIONS UNDER INCOME TAX DEPARTMENT
TAXATION SYSTEM IN INDIA
CHARITABLE & RELIGIOUS TRUST - TAXATION
PRESCRIBED FORMS WITH with Section / Rules
 
TAX @ KNOWLEDGE BASE !

Most Popular Links :

Clubing of Income Deduction U/s 80C
Allowances Us-17(3) Exemption-Salary
Tax Amendment-2015 Taxable Income
Clubing of Income Tax Deductions
HUF Deduction HUF Investment
Gift by HUF HUF Tax Planning Tips
Tax Saving Schemes Tax Planning Tips
Refund of Tax Fringe Benefit Tax-FBT
Return Filing Assessment / Scrutiny
Notice from I.T. Dept. Incomes Types @ TDS
Exemptions-Tax Returns “Summon” U/s 131
'Black Money' @ I.Tax Big Gifts To Be Taxed
'Appeals' under I.Tax Assessment @ I.Tax
Exempted Incomes Capital Gain
Business & Professions House Property
Salaries @ I.Tax Partnership Firm
'Penalty' under I.Tax Act. Tax Ready Reckoner
Charitable Trust Useful Links @ I.Tax
 
Guide & FAQ on Tax Knowledgebase @ Taxation Income Tax @ Glance HUF - Formation, Planning & Taxation
Charitable & Religious TRUST NRI (Tax Planning,Saving,Investemnt) Tax Tutorials GST (FAQ, Law, Act. Rules, Schedule, Enrollment)
FAQs - Income Tax India    

Disclaimer:
All efforts are made to keep the content of this site correct and up-to-date. But, this site does not make any claim regarding the information provided on its pages as correct and up-to-date. The contents of this site cannot be treated or interpreted as a statement of law. In case, any loss or damage is caused to any person due to his/her treating or interpreting the contents of this site or any part thereof as correct, complete and up-to-date statement of law out of ignorance or otherwise, this site will not be liable in any manner whatsoever for such loss or damage.

The visitors may click here to visit the web site of Income Tax Department for resolving their doubts or for clarifications

Tally.ERP9 Book Online Order Tally.ERP9 Book Content