Treatment of professional fee to employee
This query is : Resolved
29 December 2025
Sir,
An employee is posted as Accountant with gross salary of INR 35,000.00 p.m.
In addition to the above salary, he is getting fees of INR 15,000.00 p.a. for filing TDS returns for the same employer.
What would be the treatment of the fees? Salary or Fees for Professional Services? Any provision in this regard under the Income-tax Act?
An employee is posted as Accountant with gross salary of INR 35,000.00 p.m.
In addition to the above salary, he is getting fees of INR 15,000.00 p.a. for filing TDS returns for the same employer.
What would be the treatment of the fees? Salary or Fees for Professional Services? Any provision in this regard under the Income-tax Act?
30 December 2025
In the scenario described, the additional fees of INR 15,000 per annum paid to the employee for filing TDS returns would be treated as Salary, not as fees for professional services.
Section 17(1)(iv) IT act: This section specifically defines "salary" to include any fees, commissions, perquisites, or profits received in addition to any salary or wages.
So, Under the Income-tax Act, 1961, all payments made by an employer to an employee by virtue of their employment relationship are classified under the head "Salaries".
Section 17(1)(iv) IT act: This section specifically defines "salary" to include any fees, commissions, perquisites, or profits received in addition to any salary or wages.
So, Under the Income-tax Act, 1961, all payments made by an employer to an employee by virtue of their employment relationship are classified under the head "Salaries".
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