Income tax of employee paid by employer : urgent

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Akshata (Querist)
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22 February 2013 Hi,
Please let me know what would be the consequence of employer paying Income Tax of employee?
What effect it would have on Employer as well as Employee?
Is there any bifurcation in treatment on the basis of director and non-director?

CA Suraj Lakhotia

CA Suraj Lakhotia (Expert)
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22 February 2013 It would be added as income of the employee.

Akshata

Akshata (Querist)
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22 February 2013 Thanx suraj,

And would the employer get the benefit i.e.,
It will be allowed as expense to him?
Wont the said amount be exempt u/s 10(10)(CC) to employee?

Ankit

Ankit (Expert)
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22 February 2013 yes the employer will be able to claim the amount as an expense but it will be treated as income for the employee

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