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loss in salary

SUDHIR & PRADEEP JI (CA FINAL+LLB + DISA) (2299 Points)

14 March 2010

dear all

kindly provide your valuable advice reagarding the salary

"one of our client has ocuured the loss in salary what sholud he do"

"case is as, mr.a has been working in a company who is drawing the salary of Rs.120000/- PM but due to some problem company is going in winding up. so it can not get the salary for the last 2 month,i.e, feb & march,

but the company has deducted the tds on its salary for whole yrs(i.e 12 month) & file a return on regular basis,& issue the form 16 to the mr.a but co. has not given the salary for last 2 month,but the company has shown the salary of this 2 month in his P&L a/c as exp.

how should it been shown in income tax return,

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22 Replies

CA Priya (CS Final) (1049 Points)
Replied 14 March 2010

Of course..... He can claim refund i suppose for the excess deducted tax.....

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SUDHIR & PRADEEP JI (CA FINAL+LLB + DISA) (2299 Points)
Replied 14 March 2010

but dear priya pls explain me that ,if the company has claim the salary of that person as exp. for whole yrs i.e.RS 14,40,000/- but he person has shown only the income of Rs. 12,00,000/- how can we satisfied the AO on this point,

he has said that the company has claim the exp. for whole yrs but the income of other person is shown of only for 10 month .but the form 16 issued by the company show the total salary of Rs. 14,40,000/- only

pls send me as frd request. or thanks bheij raha hu

vijay singla (learner) (340 Points)
Replied 14 March 2010

dear sudhir, income from salary is charged on due or receipt basis. hence total salary is chargable to tax on due basis.

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SUDHIR & PRADEEP JI (CA FINAL+LLB + DISA) (2299 Points)
Replied 14 March 2010

but it is loss 4 assesee

@ CA. $ahar$h @ (Student) (338 Points)
Replied 14 March 2010

Sudhir this is not a loss. it is just case of excess deduction of tax. so claim it in return.loss under the head salary can be in only one case. if there is a bond of an employee and employee breach the contract and resign without complying the conditions of the bond, in that case the amount deducted or paid by employee as compensation is loss for him.

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CA Chaitanya (PRACTISING CA) (4283 Points)
Replied 14 March 2010

Salary income cannot be negative. It is taxable on due or receipt basis whichever is earlier.

Sharad Suman Das (art) (141 Points)
Replied 15 March 2010

Mr. Sudhir the case presented by you is the case of exess deduction of tax and refun can be claimed by an assesee. Further as per your question Form 16 issued by the employer shows total salary as Rs. 144000 in my view it is incorrect and correct form 16 should be issued by the employer in ths regard bcoz Assessing Officer can only be convinced by showing amount of salary mentioned in Form 16.

Prasanth Nair V (ACA,ACS,CWA Final,Mcom) (557 Points)
Replied 15 March 2010

hi...there is no loss here, its just non receipt of salary for two months, but while filing returns you have to take for 12 months, as it is taxable in due basis also.

TDS refund can be claimed, excess if any.

Robin (AUDITOR) (854 Points)
Replied 15 March 2010

The excess tax paid can be claimed as refund after computing assesses tax liability. This is not loss from salary. In Company's books the expense already allowed will be disallowed because the salary has not been paid during current FY

CA PRAVEEN KESHAV (CHARTERED ACCOUNTANT) (331 Points)
Replied 15 March 2010

salary cannot be negative and the tds deducted if any without payment of salary, then the excess amt of tds would be refunded........for that period for which the employer has not got salary.......