20 December 2007
Hi, I want to know the calculation of the tax paid by the employer on the behalf of employee. Since, under section 17(2) of income Tax act it is also considered as monetary perquisites & taken under head of Taxable income.
20 December 2007
It is significant to note that Special Bench of ITAT vide a significant ruling in favour of MNC employees has ruled that taxes paid by the employer on behalf of the employee is a perquisite within the meaning of section 17(2) of the Income-tax Act, which is not provided by way of monetary payment. Therefore, there is no reason not to exclude such payment of taxes from the total income of the assessee. In other words, taxes paid by the employer can be added only once in the salary of the employee. Thereafter, tax on such perquisite is not to be added again- the assessee is entitled to exemption u/s 10(10CC) of the Income-tax Act- AIT-2007-443 –ITAT
CAclubindia
