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advance salary

Geetanjali Sharma (Article Assistant) (47 Points)

27 December 2009

what is the treatment of advance salary

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(Guest)

ADVANCE SALARY IS IS TAXABLE ON RECEIPT BASIS IN THE RELEVANT ASSESSMENT YEAR. THE RECIPIENT OF SALARY CAN HOWEVER CLAIM RELIEF U/S 89. HOWEVER A LOAN TAKEN FROM EMPLOYER IS NOT TAXABLE AS ADVANCE SALARY.

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(Guest)

EXAMPLE :

SALARY OF X IS RS. 5000 PM. DURING THE MONTH OF MARCH, 2009, HE GETS THE SALARY OF NEXT TWO MONTHS IN ADVANCE. IN THIS CASE SALARY OF 14 MONTHS IS IS TAXABLE FOR A.Y. 2009-10

@ CA. $ahar$h @ (Student) (338 Points)
Replied 27 December 2009

Dear Geetanjali,

As per section 15 i.e charging section of salary,. if salary is due then it become taxable whether received or not. Also, salary is taxable on receipt whether due or not.

So it will be taxable in the previous year when the advance salary is received.

CA LOVELY ARORA (C.A. B.Com (H) Graduate) (2151 Points)
Replied 27 December 2009

Advance Salary is taxable....... but advance against salary is exempt........

Amir (Learner) (4016 Points)
Replied 27 December 2009

I confirms Depesh View...

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bhavin (article cleark) (40 Points)
Replied 27 December 2009

i agree with dipesh...because the treatment is right u/s 15 of the income tax Act..

P-A-W-A-N (TAX - MANAGER AT GURGAON) (541 Points)
Replied 28 December 2009

Originally posted by : LOVE ARORA
	Advance Salary is taxable....... but advance against salary is exempt........

love is correctly said

dinesh (audit) (60 Points)
Replied 28 December 2009

Hai all,

Salary is taxable on due or Receipt basis whichever falls earlier.......So advance salary is taxable when it is received i.e...even it is not due.Advance against salary is not taxable when it is received but taxable as and when it falls due.....it is not exempted

Looking for further clarification.

Anup rathi (CA FINAL) (268 Points)
Replied 28 December 2009

It is taxable on reciept basis

Vikram Gagneja (a/c) (108 Points)
Replied 28 December 2009

i agree with dipesh

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Shriti Daga (Chartered Accountant) (102 Points)
Replied 28 December 2009

hey i also with above all salaryis taxable on due or receipt basis whichever is earlier.

manish (Article Assitant) (358 Points)
Replied 28 December 2009

I am also agree with depesh, Advance Salary is taxable for employee on the basis of receipt however he can claim relief u/s 89. Loan from employer is not taxable as advance salary.