Guide to .. Tax Management ,Tax Planning and Tax Saving
BLOG on Income Tax Management for - AY 2022-23 & 2023-24

Meaning of Specified Employee for Taxable Perquisites [Section 17(2)(iii)]

An employee shall be a specified employee, if he falls under any of the following three categories:

  1. he is a Director of a company; or

  2. he, i.e. the employee, has a substantial interest in the company.

    As per section 2(32), person who has a substantial interest in the company, in relation to a company means a person who is the beneficial owner of shares, not being shares entitled to a fixed rate of dividend whether with or without a right to participate in profits, carrying not less than 20% of the voting power;

    Here the word beneficial owner is significant. It means that even if a person is not a registered holder of shares in a company but has beneficial interest in such shares, he shall be covered by this definition and conversely, even if a person is a registered holders of shares but has no beneficial interest in such shares, he shall not be covered by this definition. Thus, the beneficial ownership is the criterion under this definition.

  3. his income under the head 'Salaries' (whether due from, or paid or allowed by, one or more employers), exclusive of the value of all benefits or amenities not provided for by way of monetary payment, exceeds Rs. 50,000.

    Income, for this purpose, shall include all taxable monetary payments like ..
    • basic salary,

    • dearness allowance,

    • bonus,

    • commission,

    • taxable allowances/perquisites

    • but shall not include the value of any non-monetary benefits/perquisites.

The following are to be deducted from salary for this purpose:

    1. entertainment allowance (to the extent deductible under section 16(ii);

    2. tax on employment [Section 16(iii)].

Monetary Salary includes :

  1. Basic Salary.

  2. D.A. / D.P. / A.D.A.

  3. Bonus, Commission, Fees and all taxable allowances or taxable portion of an allowance.

  4. Any perquisites received in cash or in monetary form.

  5. Gratuity, Pension, Leave Salary but arrears of salary and salary received in advance is to be excluded.

  6. In case employee is working simultaneously with more than one employer, salary from all the employers is to be included.

  7. Monetary annual salary income Rs. 50,000 shall be calculated after allowing deductions u/s 16(u) and 16(iii).

Contents : Salary Income

 Important Links....for calculating Salary Income

(A). Salary -Definition & Meaning
(B). Provident Fund
(C). Allowance
(D). Perquisites
(E). Profit in lieu of Salaly
(F). Retirement Benefits
(G). Deductions
(H). Table Presentation of Salary Income (Section 15 to 17)

You may also like ...


TallyPRIME-3.* Book (Advanced Usage)
TallyPrime Book @ Rs.600

| About Us | Privacy Policy | Disclaimer | Sitemap |
© 2024 : IncomeTaxManagement.Com