tax on advance salary

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kamal sood (Querist)

15 June 2010 Dear All,

It is mentioned in the IT Act that salary is taxable on due basis or paid basis whichever is earlier.

Now if some amount of salary i.e. for Rs. 25000 for the fy year 2010-11 is paid in the fy 2009-10 and also mentioned in form 16 and tds is also deducted in fy 2009-10, whether that amount to be shown in form 16 for fy 2010-11 or not as the tax has already been deducted and paid in the fy 2009-10.

pls suggest.

thanks

CA Sanat Pyne

CA Sanat Pyne (Expert)

15 June 2010 Advance salary is taxable in the year of receipts.

CA. BIJENDER KR. BANSAL

CA. BIJENDER KR. BANSAL (Expert)

15 June 2010 Salaries.

15. The following income shall be chargeable to income-tax under the head "Salaries"—

(a) any salary due from an employer or a former employer to an assessee in the previous year, whether paid or not;

(b) any salary paid or allowed to him in the previous year by or on behalf of an employer or a former employer though not due or before it became due to him;

(c) any arrears of salary paid or allowed to him in the previous year by or on behalf of an employer or a former employer, if not charged to income-tax for any earlier previous year.

1[Explanation 1].—For the removal of doubts, it is hereby declared that where any salary paid in advance is included in the total income of any person for any previous year it shall not be included again in the total income of the person when the salary becomes due.

2[Explanation 2.—Any salary, bonus, commission or remuneration, by whatever name called, due to, or received by, a partner of a firm from the firm shall not be regarded as "salary" for the purposes of this section.]

Please check explanation 1 .

no need to show it agaisnt in FY 2010-11

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