for an amount to be taxable as salary there should be an employer and employee relationship between payer and payee ,the employer can be a firm,individual,company etc......my query is regarding the 'employee' part ...whether any company or a firm can be an employee of another company.....if yes then in which head will that firm or company's income would be taxed??
Since a company is a body Corporate, which exists only in the eyes of law cannot be employee and even a PF cannot be an employee.
but is there any judgement or rule regarding this matter which i can refer to?
Please go through the chargeability section of salary. It clearly uses the words signifying individuals like 'him' 'his' all along the chapter of salary. Becomes amply clear beyond reasonable doubt that employee is used in respect of a person only. MOreover, going by the other acts relating to employees, like PF, ESI, u will find that the word 'employee' is actually intended in respect of an individual....
Please go through the Chargebility section in salaries will clear all the doubts you have.
Ashwini K
Practically speaking, salaries accrue to individuals only. However, in the Indian income tax act, the word Employee has not been defined. in all the places, only the word person is used. Person has been defined to include company, HUF etc. in sec 2(31)
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