Sales Incentives Considered As Salary

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A company is including sales incentives in monthly salary calculations, which is increasing the employee's overall tax burden. The employee questions if this is correct, especially since channel partners have TDS deducted at a flat 5% rate. They are seeking clarification on the proper tax treatment and how to approach the company for a potential change in calculation.

Honey Singh

Honey Singh (Querist)
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11 August 2023 Hi
As per our quarterly performance our company is paying sales incentives. However this incentive is getting calculated as part of salary every month it gets credited. This is increasing my overall tax calculation.

I wanted to know if this is the right way. Because when payment are made to Chanel partner TDS of 5% is deducted for those payouts. Can’t the same happen for us . Please give the right way to approach this.

Dhirajlal Rambhia

Dhirajlal Rambhia (Expert)
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11 August 2023 Whether your TDS is deducted at slab rate or at 5% flat rate, overall it doesn't make difference, as while filing ITR the aggregate income will be taxed at slab rate only.

Dhirajlal Rambhia

Dhirajlal Rambhia (Expert)
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10 September 2024 Good Luck.

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