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Income tax paid by employer on behalf of employee

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girish (Querist)
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24 April 2013 (i) If income tax liability on salary of an employee is borne by the company, how it should be disclosed in form 16 as well as quarterly eTDS return?

(ii) Whether tax liability borne by the company amounts to monetary perquisite or non monetary perquisite?

(iii) Whether employee's tax liability borne by company can be booked as expenditure in the books of accounts of the company?

I shall be grateful if the above questions answered with appropriate example / illustrations.

CA PARAS BAFNA

CA PARAS BAFNA (Expert)
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24 April 2013 IT should be grossed up with the income and accordingly be shown in the E-TDS Returns.
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It is a monetary item.
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Income-tax payment can not be booked as an expense. It can be shown under the expense head like Salary & Wages and can be claimed as an expense.
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