Advance salary

Dear Friends

Following is the salary structure of X in ABC Limited.

Basic Salary                         40000

DA                                          12000

HRA                                       10400

Transport Allowance      4000

Gross Salary                       66400

EPF Deduction                   6240

TDS Deduction                  5000

Net Salary                           55160

So Rs. 55160 is what X will get in hand at the end of the month after deductions if he remains present for the whole month.

Now, if X request company for 2 months advance salary, then how will ABC Limited calculate this advance salary to be paid to X.

ABC Ltd does not for how many days X will be present during next 2 months. So how will ABC calculate next 2 months advance salary?

Will ABC Ltd. pay him 110320 (i.e. 55160 X 2).

Advance salary is given on Net salary basis or Gross Salary basis?

If yes, then if in the following 2 months salary of X after considering number of days he is present comes out to be following

Month 1               50000

Month 2               49000

Then what will be the accounting treatment in next 2 months. His salary during next 2 months based on attendance is Rs. 99000 (i.e. 50000 + 49000) but advance salary taken by him is 110320.

Regards