06 December 2010
In the case of employees covered under payment of gratuity act exemption for gratuity is computed as described in Payment of gratuity Act, 1972 which defines salary as Basic + DA.
but for leave encashment, employees NOT covered under payment of gratuity act, VRC etc. there is no law which defines the term salary neither the Income Tax Act defines salary so we have to refer juridical ruling and it was decided in Gesterner Duplicators (p) Ltd. vs. CIT (1979) SC, that salary means Basic + DA(is terms of retirement provide so) + Commission ()as a fixed % of profit.
06 December 2010
but we can see in Gratuity that salary for the purpose differ for the same thing As if covered by Payment of Gratuity Act it is BA+ DA(always) But in the case of employee not covered by th said act it is BS+ DA (if provided)+ Commission at fixed %. why it differs for the same thing. Also in the case of perquisites it means BS +DA (if provided) +All taxable allowances+etc. sir please elaborate. what is the reason behind these differences.
CAclubindia
