India - Income Tax Act 2010 - Saarc

S. 16 I.T. ACT, 1961 1.144Salaries.A.—Salaries7215. 73 The following income shall be chargeable to income-tax under the head“Salaries”—(a) any salary due 74 from an employer or a former employer to anassessee in the previous year, whether paid 74 or not;(b) any salary paid 74 or allowed 74 to him in the previous year by or onbehalf of an employer or a former employer though not due or beforeit became due to him;(c) any arrears of salary paid or allowed to him in the previous year byor on behalf of an employer or a former employer, if not charged toincome-tax for any earlier previous year.75[Explanation 1].—For the removal of doubts, it is hereby declared that whereany salary paid in advance is included in the total income of any person for anyprevious year it shall not be included again in the total income of the person whenthe salary becomes due.76[Explanation 2.—Any salary, bonus, commission or remuneration, by whatevername called, due to, or received by, a partner of a firm from the firm shall notbe regarded as “salary” for the purposes of this section.]Deductions from salaries.7716. The income chargeable under the head “Salaries” shall be computed aftermaking the following deductions, namely :—(i) 78 [***]72. See also Circular No. 2(LVIII-32)-D of 1966, dated 21-2-1966, Circular No. 293, dated10-2-1981, Letter [F. No. 45/118/66-ITJ], dated 21-8-1967, Circular No. 309, dated 3-7-1981,Letter No. 35/1/65-IT(B), dated 5-11-1965, Circular No. 312, dated 31-8-1981 and LetterF. No. 40/29/67-IT(A-I), dated 22-5-1967. For details, see Taxmann’s Master Guide toIncome-tax Act.73. For relevant case laws, see Taxmann’s Master Guide to Income-tax Act.74. For the meaning of the terms “due”, “paid” and “allowed”, see Taxmann’s Direct TaxesManual, Vol. 3.75. Existing Explanation renumbered as Explanation 1 by the Finance Act, 1992, w.e.f.1-4-1993.76. Inserted, ibid. Earlier Explanation 2 was inserted and omitted by the Direct Tax Laws(Amendment) Act, 1987/1989, w.e.f. 1-4-1989.77. For relevant case laws, see Taxmann’s Master Guide to Income-tax Act.78. Omitted by the Finance Act, 2005, w.e.f. 1-4-2006. Prior to its omission, clause (i) assubstituted by the Finance Act, 2001, w.e.f. 1-4-2002 and Finance Act, 2003, w.e.f. 1-4-2004,read as under :“(i) in the case of an assessee whose income from salary, before allowing a deductionunder this clause,—(A) does not exceed five lakh rupees, a deduction of a sum equal to forty per centof the salary or thirty thousand rupees, whichever is less;(B) exceeds five lakh rupees, a deduction of a sum of twenty thousand rupees;”Earlier clause (i) was amended by the Finance Act, 1974, w.e.f. 1-4-1975, Finance (No. 2)Act, 1980, w.e.f. 1-4-1981, Finance Act, 1981, w.e.f. 1-4-1982, Finance Act, 1982, w.e.f.(Contd. on p. 1.145)