Salary for the purpose

This query is : Resolved

Dheerej Kumar (Querist)
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06 December 2010 Dear Sir,

I want to ask, while computing exemption etc under the head Salaries, why salary for the purpose differ in differrent cases?

e.g; it is in the case of leave encashment.

Basic salary+ D.A. (if provided)+ Commission at fixed %.

whereas, in the case of employees covered under payment of gratuity act (exemption for gratuity)

Basic salary + DA.

etc. etc.

please specify.

waiting in anticipation.

Thanks in advance.

Manmohan ACA, CS

Manmohan ACA, CS (Expert)
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06 December 2010 In the case of employees covered under payment of gratuity act exemption for gratuity is computed as described in Payment of gratuity Act, 1972 which defines salary as Basic + DA.

but for leave encashment, employees NOT covered under payment of gratuity act, VRC etc. there is no law which defines the term salary neither the Income Tax Act defines salary so we have to refer juridical ruling and it was decided in Gesterner Duplicators (p) Ltd. vs. CIT (1979) SC, that salary means Basic + DA(is terms of retirement provide so) + Commission ()as a fixed % of profit.

Regards...........!

Dheerej Kumar

Dheerej Kumar (Querist)
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06 December 2010 but we can see in Gratuity that salary for the purpose differ for the same thing
As if covered by Payment of Gratuity Act
it is BA+ DA(always)
But in the case of employee not covered by th said act
it is
BS+ DA (if provided)+ Commission at fixed %.
why it differs for the same thing.
Also in the case of perquisites it means
BS +DA (if provided) +All taxable allowances+etc.
sir please elaborate.
what is the reason behind these differences.

Manmohan ACA, CS

Manmohan ACA, CS (Expert)
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06 December 2010 i told you na ONLY IN CASE OF "GRATUITY COVERED BY PAYMENT ACT " THIS BASIC+ DA
IN ALL OTHER CASE AS DEFINED BY CASE LAWS

Dheerej Kumar

Dheerej Kumar (Querist)
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07 December 2010 Not satisfied yet.

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