Income from salary

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Employee - Employer relationship

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An employment relationship where the employee works under the control and direction of the employer, qualifying their earnings as salary.

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Taxable Salary

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Income received by an individual from an employer which is subject to income tax.

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Direct Tax CA

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18 Terms

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Employee - Employer relationship

An employment relationship where the employee works under the control and direction of the employer, qualifying their earnings as salary.

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Taxable Salary

Income received by an individual from an employer which is subject to income tax.

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Salary Forgone

When an employee gives up a portion of their salary, it is still considered taxable income.

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Contract 'of' Service

A type of employment where the individual works for an employer, rendering services as an employee.

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Contract 'for' Service

A business relationship where one party contracts another to perform services, taxable under PGBP.

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Gross Salary

The total salary income before any deductions such as taxes or other allowed exemptions.

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Net Taxable Salary

The salary amount after all deductions are made under the applicable income tax laws.

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Exempt Amount

The portion of income or benefits that is not subject to tax under specific provisions of the Income Tax Act.

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Provident Fund (PF)

A retirement savings scheme in which both employer and employee contribute, with certain tax exemptions.

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VRS (Voluntary Retirement Scheme)

A scheme that offers financial incentives to employees who voluntarily choose to retire early.

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Perquisite

Additional benefits provided by an employer to an employee, such as housing, vehicle, or medical facilities.

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House Rent Allowance (HRA)

An allowance given to employees to cover the cost of renting a home, with states conditions under which it can be exempted from tax.

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Leave Travel Concession (LTC)

Tax exemption on expenses incurred during travel, subject to certain conditions and limits.

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Entertainment Allowance

An allowance provided for entertainment expenses which is fully taxable for employees, but may have deductions available for government employees.

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Standard Deduction

A fixed deduction allowed from income to reduce the taxable income, beneficial in the computation for salary earners.

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Specified Employee

An employee who meets certain criteria, including salary or interest in the employer's business, leading to taxation on certain perquisites.

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Professional Tax

A tax levied by state governments on professions, trades, and employment income, with allowable deductions applicable.

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Salary Income under u/s 115BAC

Salary income computed as per the provisions stated in section 115BAC of the Income Tax Act, indicating defaults and benefits under the new tax regime.