leave encashment
This query is : Resolved
om prakash sharma
(Querist)
06 May 2008
As person has taken applied for leave encashment in the month of March-08, but has got sanctioned in the month of April-08 and payment was also disbursed in the April-08.
Now my question is that -
Whether it should be booked as liability in the month of March-08 by booking as expense for march-08, or it should be booked in the month of April-08 as expense.
If it booked it in the month of march-08, whether company is liable to deduct tax in the month of march-08 itself.
and finally, when it will be taxable in the hand of employee, in the previous year 2007-08, or in the previous year 2008-09
kindly reply.
Now my question is that -
Whether it should be booked as liability in the month of March-08 by booking as expense for march-08, or it should be booked in the month of April-08 as expense.
If it booked it in the month of march-08, whether company is liable to deduct tax in the month of march-08 itself.
and finally, when it will be taxable in the hand of employee, in the previous year 2007-08, or in the previous year 2008-09
kindly reply.
Amit Sharma
(Expert)
06 May 2008
Dear sir,
According to me leave encashment comes under the head "salary" and the basis of this head is as follows:-
(a) On receipts basis or accural basis whichever is ealier.
In the above case it is accural basis, which means to say that is should be booked in Mar -08. and through this all your questions are answered.
According to me leave encashment comes under the head "salary" and the basis of this head is as follows:-
(a) On receipts basis or accural basis whichever is ealier.
In the above case it is accural basis, which means to say that is should be booked in Mar -08. and through this all your questions are answered.
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