Taxation Exam > Taxation Notes > Income Tax for assessment (Inter Level) > What is the Due Date of Salary and Allowances - Taxation
What is the Due Date of Salary and Allowances - Taxation | Income Tax for assessment (Inter Level) PDF Download
What is the due date of salary
1. Salary may falls due either on the last day of each month; or
2. on the first day of next month.
3. Where salary falls due on the last day of each month, salary of April to March is taxable.
4. Where salary falls due on the first day of next month, salary of March to Feb is taxable.
P1: Mr. Taxcrazy is employed in Facebook since 1-9-2013 in the grade of 25,000-2,000-29,000-3000-41,000. Compute salary chargeable to tax for the PY 2016-17 if (a) salary falls due on last day of each month (b) Salary falls due on first day of next month.
Ans: 3,69,000; 3,66,000.
Solution
|
Date of increment of salary |
Amount |
Date of increment of salary |
Amount |
|
1-9-2013 [PY 2013-14] |
25,000 |
1-9-2017 [PY 2017-18] |
35,000 |
|
1-9-2014 [PY 2014-15] |
27,000 |
1-9-2018 [PY 2018-19] |
38,000 |
|
1-9-2015 [PY 2015-16] |
29,000 |
1-9-2019 [PY 2019-20] |
41,000 |
|
1-9-2016 [PY 2016-17] |
32,000 |
|
|
|
salary falls due on the last day of each month |
Salary falls due on the first day of next month |
||||||||
|
April 2016 to March 2017 |
March 2016 to February 2! |
||||||||
|
April |
to |
Aug |
(5 x 29,000) |
1,45,000 |
March |
to |
Aug |
(6 x 29,000) |
1,74,000 |
|
Sept |
to |
March |
(7 x 32,000) |
2.24.000 |
Sept |
to |
Feb |
(6 x 32,000) |
1,92,000 |
|
Total salary of PY 21 |
3,69,000 |
Total salary of PY 21 |
3,66,000 |
||||||
P2: Mr. Taxcrazy is employed in Apple since 1-1-2012 in the grade of 12,000-3,000-33,000-5,000-63,000. Compute salary chargeable to tax for the PY 2016-17 if (a) salary falls due on last day of each month (b) Salary
falls due on first day of next month.
Ans: 2,97,000; 2,94,000
P3: Compute basic salary for the PY 2016-17 from the following information if (a) salary falls due on last day
of each month (b) Salary falls due on first day of next month.
1. Mr. X joins a company on 1-11-2014 on a grade of 12,000-1,000-20,000.
2. Mr. X joins the Co. on 1-7-2016 on a salary of ₹ 6,000 p.m.
3. Mr. X joins the Co., on 1-6-2012 on a grade of 16,000 - 2,000 - 20,000 - 4,000 - 32,000. He retires on
31-1-2017.
4. Mr. X joins the Co., on 1-5-2016 on a salary of ₹ 15,000 p.m. He retires at the end of February.
5. Mr. X is working with two Companies. A Ltd. pays him ₹ 8,000 p.m. and B. Ltd. pays ₹ 9,000 p.m.
6. Mr. X has been drawing basic salary of ₹ 12,000 p.m. for last 3 years. His annual increment falls due on 1-8-2016 of ₹ 3,000 p.m.
7. Mr. X retires on 31-12-2016. Basic salary at the time of retirement ₹ 8,000 p.m. His annual increment falls due on 1-9-2016 ₹ 2,000 p.m.
of each month (b) Salary falls due on first day of next month.
1. Mr. X joins a company on 1-11-2014 on a grade of 12,000-1,000-20,000.
2. Mr. X joins the Co. on 1-7-2016 on a salary of ₹ 6,000 p.m.
3. Mr. X joins the Co., on 1-6-2012 on a grade of 16,000 - 2,000 - 20,000 - 4,000 - 32,000. He retires on
31-1-2017.
4. Mr. X joins the Co., on 1-5-2016 on a salary of ₹ 15,000 p.m. He retires at the end of February.
5. Mr. X is working with two Companies. A Ltd. pays him ₹ 8,000 p.m. and B. Ltd. pays ₹ 9,000 p.m.
6. Mr. X has been drawing basic salary of ₹ 12,000 p.m. for last 3 years. His annual increment falls due on 1-8-2016 of ₹ 3,000 p.m.
7. Mr. X retires on 31-12-2016. Basic salary at the time of retirement ₹ 8,000 p.m. His annual increment falls due on 1-9-2016 ₹ 2,000 p.m.
Ans: (1) 1,61,000; 1,60,000; (2) 54,000; 48,000; (3) 2,72,000; 2,96,000; (4) 1,50,000; 1,50,000; (5) 2,04,000;
2,04,000; (6) 1,68,000; 1,65,000; (7) 62,000; 68,000.
2,04,000; (6) 1,68,000; 1,65,000; (7) 62,000; 68,000.
P4: Mr. X monthly basic pay is 16,000. (a) He took 3 months basic salary in advance on 28-2-2017. (b) He took
3 months basic salary in advance on 28-2-2016. Compute his salary for the AY 2017-18.
3 months basic salary in advance on 28-2-2016. Compute his salary for the AY 2017-18.
Ans: (a)16,000 x 14 = 2,24,000 (b) 16,000 x 10 = 1,60,000
Allowances
- It is a fixed amount of money payable to employee for particular requirement in cash connected with the services rendered. For e.g. ₹ 200 p.m. for meal. It is meal allowance. ₹ 200 meal coupon. It is perquisites.
- Allowances may be given for personal purpose or for official purpose.
- Where the allowances are given for personal purpose it is generally fully taxable. But where allowances are given for official purpose it is generally exempt from tax. Treatment of taxability of allowance does not depend upon the name of the allowance but for the purpose for which it is provided.
- Allowances are divided into four categories (i) Fully exempted allowances (ii) Fully taxable allowances (iii) Partially exempted allowances and (iv) Special allowance.
P1 : X, a former employee of United Nations Organisation (UNO), receives pension from the UNO. His taxable
salary is-
Ans : Nil
Fully Taxable Allowances
Following allowances, whether spend or not, is fully taxable.
|
1. |
Servant Allowance. |
9. |
Fixed Medical Allowance. |
|
2. |
City Compensatory Allowance. |
10. |
Tiffin / breakfast / lunch / brunch / refreshment / meal / dinner allowance. |
|
3. |
Overtime allowance. |
11. |
Telephone Allowance. |
|
4. |
Project allowance. (personal research) |
12. |
High Cost of living Allowance. |
|
5. |
Entertainment allowance. (for clients entertainment) |
13. |
Marriage / Family Allowance |
|
6. |
Dearness allowance. (inflation in the economy) |
14. |
Holiday Home Allowance |
| 7. | Rural allowance. | 15. | Non-Practising Allowance |
| 8. | Absent Allowance. | 16. | Overseas allowance |
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FAQs on What is the Due Date of Salary and Allowances - Taxation - Income Tax for assessment (Inter Level)
| 1. What is the due date for filing salary and allowances taxation? |  |
Ans. The due date for filing salary and allowances taxation varies depending on the country and its tax regulations. In many countries, the due date is typically around April 15th of each year for individual taxpayers. However, it is essential to consult the specific tax authority or seek professional advice to determine the exact due date for filing salary and allowances taxation.
| 2. Can the due date for filing salary and allowances taxation be extended? | |
Ans. Yes, in some cases, the due date for filing salary and allowances taxation can be extended. However, this extension is usually granted under certain circumstances, such as natural disasters, personal emergencies, or specific situations outlined by the tax authority. Taxpayers need to apply for an extension before the original due date and provide valid reasons for the extension request.
| 3. What happens if I miss the due date for filing salary and allowances taxation? | |
Ans. Missing the due date for filing salary and allowances taxation may result in penalties and interest charges. The specific consequences vary depending on the tax jurisdiction, but common penalties include late filing penalties, late payment penalties, and accruing interest on the unpaid tax amount. It is crucial to file the tax return as soon as possible to avoid additional penalties and charges.
| 4. Can I file my salary and allowances taxation before the due date? | |
Ans. Yes, taxpayers can file their salary and allowances taxation before the due date. In fact, it is recommended to submit the tax return as early as possible to avoid last-minute rush and potential errors. Filing early allows taxpayers to have ample time for reviewing their returns, gathering necessary documents, and seeking professional assistance if needed.
| 5. Is there a penalty for filing salary and allowances taxation after the due date but without any tax liability? | |
Ans. The penalty for filing salary and allowances taxation after the due date but without any tax liability varies depending on the tax jurisdiction. In some countries, if there is no tax liability, there may be no penalty for late filing. However, it is essential to consult the specific tax authority or seek professional advice to understand the penalty provisions in your jurisdiction. It is always recommended to file the tax return on time, even if there is no tax liability, to avoid any potential penalties.
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