TAXABILITY ON SALARY
This query is : Resolved
04 September 2009
I have income from salary for job and I also have proprietorship business. I maintain books on mercantile basis and recognize my business income as well personal income (interest etc) on accrual basis.
I have been reading some answers to queries on tax treatment of salary to be on due and paid (even in advance basis).
My employer pays me Salary for April any time in May and so on for other months. Say the salary for March may be paid in April and he deducts TDS for 12 months salary. I also file the return for all twelve months even though the March salary is not paid but it is due and even employer maintains mercantile system. Do I have to show the income again in my next April to March again as paid salary also in addition to what would be due in March? Would that not be taxing the same amount twice?
I have been reading some answers to queries on tax treatment of salary to be on due and paid (even in advance basis).
My employer pays me Salary for April any time in May and so on for other months. Say the salary for March may be paid in April and he deducts TDS for 12 months salary. I also file the return for all twelve months even though the March salary is not paid but it is due and even employer maintains mercantile system. Do I have to show the income again in my next April to March again as paid salary also in addition to what would be due in March? Would that not be taxing the same amount twice?
04 September 2009
As per Income Tax Act, 1961, Salary is chargeable to tax either on due basis or on receipt basis whichever is earlier.
Therefore, if once your salary is taxed on due basis, thereafter the same salary will not be taxable on receipt basis.
Therefore, if once your salary is taxed on due basis, thereafter the same salary will not be taxable on receipt basis.
05 September 2009
Thank you. As I understand, if I have been taxed a salary of march on due basis then it will not be taxed again when paid in April. However if I have been paid my salary for march in march and in addition to that I take some advance for April,the entire years salary + advance is taxed. If the advance is deducted next month against the regular salary that is due, then it will not be taxed again as it is taxed in previous year against payment. Is this assumption correct?
06 September 2009
Yes it is correct as once salary has been teaxed on payment basis it cann't be taxed again on due basis
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