Salary
This query is : Resolved
10 July 2012
what is the difference between advance salary and advance against salary?
CA Rahul Gupta
(Expert)
10 July 2012
Advance Salary
Advance salary is taxable when it is received by the employee, irrespective of the fact whether
it is due or not.It may so happen that when advance salary is included and charged in a particular previous year, the rate of tax at which the employee is assessed may be higher than the normal rate of
tax to which he would have been assessed. Section 89(1) provides for relief in these types of
cases.
Loan or Advance against Salary
Loan is different from salary. When an employee takes a loan from his employer, which is repayable in certain specified installments, the loan amount cannot be brought to tax as salaryof the employee.
Similarly, advance against salary is different from advance salary. It is an advance taken by the employee from his employer. This advance is generally adjusted against his salary over a
specified time period. It cannot be taxed as salary.
Advance salary is taxable when it is received by the employee, irrespective of the fact whether
it is due or not.It may so happen that when advance salary is included and charged in a particular previous year, the rate of tax at which the employee is assessed may be higher than the normal rate of
tax to which he would have been assessed. Section 89(1) provides for relief in these types of
cases.
Loan or Advance against Salary
Loan is different from salary. When an employee takes a loan from his employer, which is repayable in certain specified installments, the loan amount cannot be brought to tax as salaryof the employee.
Similarly, advance against salary is different from advance salary. It is an advance taken by the employee from his employer. This advance is generally adjusted against his salary over a
specified time period. It cannot be taxed as salary.
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