Salary from second company

This query is : Resolved

Querist : Anonymous

Querist : Anonymous (Querist)

11 March 2014 I am working with Company A and they have another company B. Both are running individually and there is no finance transaction between both companies internally

I am getting regular salary from Company A
and Incentives from Company B.

There is taxable income from Company A around 1 Lac after deduction of 80C and 80D

So I will be paying Rs. 10,000 as income tax

Now from Company B i will be getting incentive around 1 Lac So should company B deduct the TDS? OR they have to show my incentive as profession fees and deduct TDS for profession fees

Can Company B show me as employee?

Can one person work in two companies?

Nikhil Kaushik

Nikhil Kaushik (Expert)
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11 March 2014 yes. you can work for as many companies as you want to as an employee. it is for Company B to decide whether they want give you salary or professional fees. If professional fees is paid, it would be reflected in your tax return as income from business/profession. It would be advisable for Company B to show it as salary only

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Querist : Anonymous

Querist : Anonymous (Querist)

11 March 2014 Dear Nikhil,

Thanks for the reply

If company Company B show it as salary then should they deduct TDs on 1 Lac paid to me as salay from Company B as from Company A 1 Lac is taxable income from Company A or I should ask company A to deduct TDS as my taxable in come is 1 Lac

OR while individual tax return i should show as income from other sources and pay tax directly

Nikhil Kaushik

Nikhil Kaushik (Expert)
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11 March 2014 you can ask any one of the company to deduct tax on both the salaries. I am not sure if the same can be classified as income from other sources.

Sandeep Dharar

Sandeep Dharar (Expert)
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11 March 2014 It is the choice of the employee to choose employer of his own choice who will deduct TDS of all the other companies(including itself) from which the employee is receiving salary. If u choose Co. A then it will also deduct TDS from income from Co. B & vice versa.

CS,CA F,Numrologi TusharSampat

CS,CA F,Numrologi TusharSampat (Expert)
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11 March 2014 it is not income from other source but income from salary only.

Nikhil Kaushik

Nikhil Kaushik (Expert)
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11 March 2014 Tushar that is true only where the same employee is offering some commission/incentive income.

CS,CA F,Numrologi TusharSampat

CS,CA F,Numrologi TusharSampat (Expert)
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11 March 2014 it is in connection with his salary as he said both co cannot give him gift it must be as condieration for his work only.

Sandeep Dharar

Sandeep Dharar (Expert)
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11 March 2014 Agreed with Tushar, it will b treated as salary.

Nikhil Kaushik

Nikhil Kaushik (Expert)
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11 March 2014 well it can professional income...and here the question is about structuring of the payments...it is still open for company to decide what form it wants to give to the payments being made.

Nikhil Kaushik

Nikhil Kaushik (Expert)
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11 March 2014 Tushar/Sandeep, can you explain how payment from Company B can only be salary!!!

Querist : Anonymous

Querist : Anonymous (Querist)

11 March 2014 Company B is willing to show payment as salary

Nikhil Kaushik

Nikhil Kaushik (Expert)
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11 March 2014 Dear Querist,

As I said earlier it is beneficial to show as salary as it helps in reduction of compliances. However, you can reduce tax impact by showing it as professional receipts and claim expenses against the same. To that extent tax planning is beneficial.

Querist : Anonymous

Querist : Anonymous (Querist)

11 March 2014 company B is willing to show as salary instead of incentive

CS,CA F,Numrologi TusharSampat

CS,CA F,Numrologi TusharSampat (Expert)
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11 March 2014 how can it be professional income as he is under employment with the co and any emoulments received is income from salary only..he is not providing any service as a professional.

Sandeep Dharar

Sandeep Dharar (Expert)
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11 March 2014 Nikhil since he is not providing any services to the company, & if not providing service then hw can he receive professional fees, I think Co. B is sister concern & hence it will b treated as salary...

Nikhil Kaushik

Nikhil Kaushik (Expert)
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11 March 2014 he is working for two companies. Company 1 is already deducting taxes under salary head. With company 2 he is in receipt of incentives..thats all...the taxes have not been deducted yet...and the querist is looking for what is the best way to show it.

salary is the way that helps in reduced compliances as ITR1/2 can be filed (depending on other incomes) whereas professional fees can be shown to reduce tax impact but it would entail higher compliances in form of ITR4/4S depending upon applicability of 44AA(1)

CS,CA F,Numrologi TusharSampat

CS,CA F,Numrologi TusharSampat (Expert)
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11 March 2014 nihkil if u read above queirst have said co b is willing to show as salary instead of incentive????then wat is the problem?

Nikhil Kaushik

Nikhil Kaushik (Expert)
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11 March 2014 "hence it will be treated as salary"

in taxation, use of will and shall should normally be avoided...specially while giving broad-based advisory.

regardless..is there any provision for any payment received from an entity related to employer to be included in "income from Salaries" head?

and where is it written that services need to be provided for treating income under head "income from business/profession". even casual receipts are included therein friend.

Nikhil Kaushik

Nikhil Kaushik (Expert)
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11 March 2014 Tushar, I have already answered that. He was earlier advised to include in salary only. The response regarding inclusion in business income was towards suggestions that it "HAS" to be included in salary. That is wrong..there is no compulsion on that.

CS,CA F,Numrologi TusharSampat

CS,CA F,Numrologi TusharSampat (Expert)
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11 March 2014 willing clearly means that the intention is to show as salary exp by co b so there was no use of will and shall.

so what do professional provide?

Nikhil Kaushik

Nikhil Kaushik (Expert)
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11 March 2014 you are referring to wrong message....willing is an intention (the term the querist used)..."will have to" means compulsion (like as per law, the term Sandeep used). I was responding to sandeep's comment that it has to be shown as salary. I hope I have made myself clear.

CS,CA F,Numrologi TusharSampat

CS,CA F,Numrologi TusharSampat (Expert)
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11 March 2014 by the way law never uses the word will have to...it uses "shall" for compulsion and "may" if discretion is given

hope now i have made myself clear to all.

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