Income tax on salary

I think its only 350000

According to me also Rs. 3,50,000 willbe taxed. As there is no particular section for this kind of exemption or deduction in Income Tax Act, 1961.

3,50,000/- will be taxable.

 I have heard that there is a Case Law on the same issue.

If anyone know the same, please quote it.

Thanks in advance

 3,50,000/- will be taxable.

Hi shailendra, as such its the default of assessee for which he's been charged such penalty... So, i think, that is not at all deductible.. Even in PGBP, few legal expenses are legally not deductible...

So, such penalty should not be allowed as deduction.

here one thing is to be noted sir, i have used the words penalty, it does not make it penalty. It is simply the fine for breaking the contract.

And even in PGBP penalty is allowed if it does not relate to the breaking of any law. If penalty is paid due to violation of contract between two parties, then it is allowed u/s 37(1). It is clarified in the case of shantilal Pvt. ltd. vs. CIT

yes Rs. 3.50 lacs would be chargeable to tax, Penalty amount is not deductible under salary head, as there is no provision as such

Dear Shailendra,

In your case income is under the head salary then how can u take deductions of those expenses which are allowed in PGBP? Do correct me if i am wrong.

Dear sudhanshu,

My question was not of claiming deduction under the head PGBP. I just clarified on the issue that penalty is allowed in income tax if it is not under any law.

I am talking about salary only.

Well then i am agree with you.

still waiting for a expert opinion as still not satified with the answers above so need a strong support for the above comments.

Dear Ritu,

I there is any income under the head salary than deductions which are allowed are under Section 16

ii)  Entertainment Allowance

iii) Professional tax paid

or you can take deduction under Chapter VI- Section 80C to Section 80U but there is no specific section for deduction of Rs. 25,000. So Rs. 3,50,000 is fully taxable.

IN MY OPINION RS. 350000 IS LIABLE FOR TAX.