Income tax paid by employer on behalf of employee

Is income tax paid by an employer on behalf of his employees , a taxable perquisitie in  hands of the employees? Can employer claim deduction of this payment as an expense while calculating income from business?

Replies (5)

no

i think it is part of salary of employees

The tax paid by an employer on behalf of the employee directly to the goverenment is a non-moetary perquisite in the hands of the employee.....the employer can gain exemption from multiple grossing up of the same u/s 10(10cc).....in other words, taxes paid by the employer can be added only once in the salary of the employee...

hi all

 

       i am the new guy for this site

 

Dear Sandeep,

There can be scenario for this:

1)Tax paid by the employee can be treated as loan to the employee and recovered from his subsequent salary. 

2) Tax paid by the employee is added back as salary Income to employee. In this case company can claim deduction.

Dear Sandeep,

There can be 2 scenario in this case:

1)Tax paid by the employee can be treated as loan to the employee and recovered from his subsequent salary. 

2) Tax paid by the employee is added back as salary Income to employee. In this case company can claim deduction.

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