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Income Tax - Doubt ??

Krish (CA Final ) (3331 Points)

31 October 2010

If any employee under Sales Department receives a Car, air conditioner, motor cycle or any other article on achieving a sales target;

What should be the treatment. ? (Under Salary or PGBP)

Actually i have gone through the situation where such perquisites have been treated under Profit and Gain from Business.

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17 Replies

CA Saba Naaz (Chartered Accountant) (8487 Points)
Replied 31 October 2010

I think ..such perquisites should be taxable under the head "Profits and Gains of Business" as these perquisites are provided for achieving the sales target.

3 Like

Azim Khan ACA,CS,CMA*,LLB* (Proprietor) (1312 Points)
Replied 31 October 2010

What about employer and employee relationship?

(Guest)

if such things are as gift from employer. taxable under IOS

If those r as perquisite taxable under salaries

Hari Babu (CA Student) (82 Points)
Replied 31 October 2010

Hi,Any amenity or facility provided by the employer to the employee. Then it is taxable as perquisite. Here amenity or benefit given by employer to sales man is taxable as perquisite

Hari Babu (CA Student) (82 Points)
Replied 31 October 2010

Perquisites taxable only when:.... They should be provided by employer to the employee and provided in the course of employment. And There arises personal advantage to the employee. Perquisite may be regular or casual.

CA SUNIL KUMAR (FCA,ACMA,CS) (53 Points)
Replied 31 October 2010

I think, If there exist employer employee relationship, then whatever received from employer is taxable only under the head Income from Salary subject to the exemptions and caps. If they are in kind, the cost to the employer will be the taxable value.

Azim Khan ACA,CS,CMA*,LLB* (Proprietor) (1312 Points)
Replied 31 October 2010

According to me It will be taxable under the head salaries as follows.

Value of benefit on the transfer of movable assets shall be the Actual Cost to the employer as reduced by the depreciation amount on WDV method calculated for each completed year. fraction if any will be ignored.

3 Like

danish dabir (mumbai) (218 Points)
Replied 31 October 2010

it is taxable under the head salaries

Shyamal Mistry (Final Student) (282 Points)
Replied 01 November 2010

According to me.........under the head Salaries

Aravind.. (CA) (1262 Points)
Replied 01 November 2010

taxable under the head salaries....

Prachi Jindal (CA-Article-Final-Student) (129 Points)
Replied 01 November 2010

Here a person got all above mentioned things as a gift in a status of an employee...so taxable under head salaries..but if received on practicing a business then will be taken as PGBP. Gifts received from an employer is taxable as perquisite giving exemption upto 5000...but if it is received not on the services rendered but on any other personal capacity then would be taxable under the head IFOS...Thus employer- employee relationship is important to charge any receipt as salary.

In the case mentioned above assessee may be under employment and practice both and the gifts are received on the basis of his professional qualification and treated as professional receipt and charged under the head PGBP.

1 Like