A presentation on Income from salary by students of RNB Global Univerity. Including Grading system of salary, Basis of Charge, Allowances, Bonus, Perquisites, Gratuity, Pension, and many more.

1. INCOME TAX LAWS & ACCOUNTS
[INCOME FROM SALARY]
1. Gautam Chopra
2. Saurabh Chopra
3. Chaman Tanwar
4. Kanak Binayakiya
5. Pradhumn Soni
PRESENTED BY:-
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2. FLOW OF PRESENTATION
• Introduction
• Grading System of Basis of Salary
• Basis of Charge of Salary
• Format of Computation of Salary
• Basic Introduction
• Allowances
• Perquisites
• Bonus
• Retirement Benefits
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3. INTRODUCTION TO SALARY
• Normally, the term ‘Salary’ signifies the consideration for services rendered
by a person and it is a fixed monthly remuneration.
• To cover an income covered under salary head “Employer & Employee”
relationship has to be established.
• Forgoing of Salary to be treated as application for salary.

4. GRADING SYSTEM OF BASIS OF SALARY
• Certain employees are entitled to a graded system of basic
salary.
• The normal annual increments are already fixed in the grade.
• Here is an Example
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5. BASIS OF CHARGE OF SALARY
[SECTION 15]
• It is charged either on “due” or “receipt” basis, whichever is earlier.
• Special Case: In increment like Pay Commission by the Govt. and revision of salaries of
employees. Certain relief shall also be granted in such cases.
• Place of Accrual: Salary earned in India is deemed to accrue or arise in India and will be
taxed in India, even if
- It is received outside India.
- It is received after termination of service.
• Pension received abroad in respect of services rendered in India, shall be treated as Income
arised in India.
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6. FORMAT OF COMPUTATION OF SALARY
Particulars Amount
Income from salary -
Income from allowances -
Taxable value of perquisites -
Gross Salary -
Less Deductions u/s 16 -
Entertainment Allowance -
Professional Tax -
Income from Salaries -
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7. ALLOWANCE
Allowances
House rent
allowances
Entertainment
allowances
Actual or limit
specified
Notified special
allowances
Fully exempt
allowances
Fully taxable
allowances

8. PERQUISITES
Perquisites
R.F.A.
Furnished
Unfurnished
Movable
assets
Computer
Free food and
non- alcoholic
beverages
Value of gifts
In cash
In kind
Motor car
If owned by
employer
If owner by
employee

9. BONUS
• A bonus is any financial compensation, reward, or return over and above the
normal expectations of the recipient. A bonus can be given to a company’s
employees and executives, prospective employees, or shareholders.

10. RETIREMENT BENEFITS
Retirement Benefits –
1. Gratuity
• It is generally paid at the time of cessation of employment.
• It is based upon the duration of service.

11. Pension (Sec 10(10A)
• Pension is a payment made by the
employer
after the retirement/death of the
employee as
a reward for his past services.
• Uncommuted Pension
• Commuted Pension
Uncommuted pension which is
monthly pension received by
employee after retirement.
Commuted Pension which is
lump sum payment received at
the time of retirement.

12. DEDUCTIONS U/S 16
• Entertainment Allowances
• Professional Tax

13. THANK YOU