As an employee during the year, can I declare salary actually received thereby postponing my tax liability on unpaid salary considering cash basis of accounting. Is it allowed
Employer has issued form 16 to the extent salary paid to employees.
19 June 2014
cash basis of accounting is allowed only in respect of income under the head profits and gains of business or profession and income from other sources and not in respect of other heads.
As per section 15 of the Act Salary shall be taxed either on due basis or cash basis which ever event occurs earlier.
Therefore there is no question of postponing of salary to the next year on cash basis.
It is true that TDS u/s 192 on salary needs to be made on cash basis. Your employer has correctly issued that Form 16.
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