Where in books of accounts notice pay
This query is : Resolved
19 September 2012
Dear Seniors,
Please refer a statement here,
"when Notice pay does not rank for P.F deduction, it goes without saying that it is not wage or salary and when it is not wage or salary, in my view , it cannot be shown under salry or wages head.Further the object of notice pay is to enable the employee to tide over a posiible finacial hardship caused by sudden unemployment and thus it is in the nature of subsitence allowance, required by the employer to pay to the employee to enable him to fend for himself till he finds another job but with a time cap of one month. The basis for deciding "one month wages" is a merely to work out a formula agreed up on by the employer and employee to quantify such subsistence allowance but does not render it on par with wages. Therefore, in my view, it may have to be shown under different head of income but not salary. It is better to consult a Chartered accountant in this regard."
Would request if you can please inform where in books of accounts do we place notice pay.
Would request your solution to it at please
Please refer a statement here,
"when Notice pay does not rank for P.F deduction, it goes without saying that it is not wage or salary and when it is not wage or salary, in my view , it cannot be shown under salry or wages head.Further the object of notice pay is to enable the employee to tide over a posiible finacial hardship caused by sudden unemployment and thus it is in the nature of subsitence allowance, required by the employer to pay to the employee to enable him to fend for himself till he finds another job but with a time cap of one month. The basis for deciding "one month wages" is a merely to work out a formula agreed up on by the employer and employee to quantify such subsistence allowance but does not render it on par with wages. Therefore, in my view, it may have to be shown under different head of income but not salary. It is better to consult a Chartered accountant in this regard."
Would request if you can please inform where in books of accounts do we place notice pay.
Would request your solution to it at please
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