when is bonus taxable

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Raghav (Querist)
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03 June 2010 Respected Sir,

Company is paying basic 10000 (Gross Salary 25000 p.m.CTC and 833 is deducting as bonus as well company will pay this amount in next financial year by seperate cheque.

My question is when is bonus taxable for employees and how we calculate the TDS amount, which is deductible from employees salary I mean considering the salary 24167 or 25000 per month .

Thanks & Regards,
Raghav Jha

CA V. Mohanakrishnan

CA V. Mohanakrishnan (Expert)
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03 June 2010 Considering the salary level this does not comes under the ambit of payment of bonus act which is statutory
accordingly bonus needs to be approved and declared specifically based on the performance of the company. the same needs to be included in the year of payment to the employee. Alternately if the provision is made for such bonus at the end of the year even though paid in the next year, the same may be included as part of this year calculation

Raghav

Raghav (Querist)
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03 June 2010 Thanks Sir.

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Raghav

Raghav (Querist)
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03 June 2010 Respected Sir,

IHave some doubt about salry slip.Since we are talking about CTC how we give the salary slip to employees for 24167 or 25000.

Regards,
Raghav Jha

K V Subba Rao

K V Subba Rao (Expert)
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03 June 2010 Words such as salary, dearness allowance, provident fund, bonus, gratuity. ltc, encashment, notice pay etc., are found in tax laws in the sense their tax treatment is well laid. But, the word "CTC" doesn't find any place at all. It is rather a relatively new concept highlighted especially after software industry started penetrating.

CTC only facilitates quantifying employer's liability for "all-inclusive" expenditure directly as well as indirectly, irrespective of periodicity of payment (monthly or annually etc) and actual payee (employee himself or PF Commissioner etc)

Further Bonus is taxable in the year in which it is actually received by the employee
For the purpose of Income Tax, CTC has no relevance. Taxability or otherwise of any component of CTC depends on law regulating such individual components.