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Gross salary or in hand salary is taxable?

Michelle (Service) (297 Points)

28 February 2018

An employee is entitled to consolidated salary Rs. 30000 pm. If he takes leaves during a month, salary gets deducted and assume in such case for 1 month he gets only Rs. 20000 pm. No leave encashment benefits.

While calculating total tax on salary at the end of the year, do we consider Rs. 30000 or Rs. 20000 as his salary?

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7 Replies

Sagar Mailapur (172 Points)
Replied 28 February 2018

20000

Divakar (Student CA Final ) (11857 Points)
Replied 28 February 2018

Here his gross total income is Rs. 20000 and not 30000..what he does not earned..... So GTI less deduction is Net taxable income.... Tax is on net taxable income

Bharath Soni (Chartered Accountant) (108 Points)
Replied 28 February 2018

To my knowledge it is 20000/- very obvious that you can't be taxed for that you have not even earned.
I believe the same would be even reflected in your 26AS and form 16.
Kindly recheck and revert for clarification if any

Michelle (Service) (297 Points)
Replied 28 February 2018

TDS gets deducted from 1st month of the year. At that point we can only take gross salary due as we wouldn't know how much the employee would get in hand in the later months. He is due to earn 30000 pm. Salary is taxed on due basis.

Please correct if wrong

Divakar (Student CA Final ) (11857 Points)
Replied 28 February 2018

Once salary sheet is prepared only then tds is deducted... So he can't deduct tds on gross salary... Even if he deduct tds on gross salary and later u not received it then u get refund of that tds in ur return.... Tds on salary is on payment basis