Co. paying tax for employees

Respected All

As per income tax law co. cnt pay tax on behalf of there employees, employees them self hv to bear the tax burden, but i hv come across a co. wh pays tax for der foreign client.
M nt I.T expert, I will try to explain suppose his pay is rs 2 lakh per mnth n tax cums at 4 lakh annually so co. decided to pay him 24(salary)+4(tax)= 26 lakhs so the foreign client (engineer) dnt hv to bear d tax, the work is in s.africa but d foreign client will b on indian co. payroll
So ALL, my learned experts frnds i wnt to kn is it right practice or not if wrong cn ni1 gv my relevant  ACT or any Court Case i will b v thn full to all


with rgrds
guddu

Replies (1)

Dear Virendra,

Shifting the burden of tax is perfectly valid.

In case of employees -

If co. bears the tax burden on non-monetary perks (like Rent free accomodation) then "the amount of tax is not allowed as deduction to the employer" & that tax remains exempt in the hand of employees.

Whereas if co. bears the tax burden on monetary perks " then the "amount of tax" becomes a taxable perquisite in the hands of employees & it is allwoed as deduction to the employer.

In case other than employees -

The amount of expenditure increases with the aqmount of tax & is allowed as deduction..(also known as grossin up)

Leave a Reply

Your are not logged in . Please login to post replies

Click here to Login / Register  

Company
15 October 2026
Senior Accountant

Continental Belting Pvt Ltd

Mumbai

B.Com

View Details
Company
ARTICLESHIP 17 October 2026
Articled Assistant

RRPM & Associates LLP

Chennai

CA Inter

View Details
Company
13 October 2026
Accountant

Zerdi & Co. Chartered Accountants

Pune

B.Com

View Details
Company
ARTICLESHIP 30 September 2026
CA Article Assistant

CA Suraj Garg & Associates

New Delhi

CA Final

View Details
Company
ARTICLESHIP 07 October 2026
Article Assistant

Malhotra Rajesh & Associates

New Delhi

B.Com

View Details
Company
19 October 2026
Accountants/Articles (Freshers/Experienced)

ADY & CO.

New Delhi

Graduate (Any)

View Details
Company
Featured 21 September 2026
Consultant - Reporting

Finrep Advisors LLP

Mumbai

CA

View Details
Company
30 September 2026
Senior Accounts Executive

Codeboard Technology

Chennai

MBA

View Details