If an employee seeks a salary advance of about 3 times his salary and the advance is deducted in 9 or 10 installments from his salary every month, is there an income tax deduction on the advance salary as per the Indian government? Please let me know urgently.
From India, Delhi
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1From India, Delhi
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Hi,
Consider his advance salary as a loan to him. Talk to your seniors, accounts, and management. If they agree, then pay some EMI amount from his monthly salary. Income tax deduction remains the same as per the monthly deduction, so no changes required in that aspect. His salary slip should reflect two additional deductions, namely income tax and loan installment to the company. Also, verify whether it is an interest-free loan or if the company will charge any interest percentage on the same. Consult your account department before committing to any employee.
Regards, Jayshree
From India, Mumbai
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Consider his advance salary as a loan to him. Talk to your seniors, accounts, and management. If they agree, then pay some EMI amount from his monthly salary. Income tax deduction remains the same as per the monthly deduction, so no changes required in that aspect. His salary slip should reflect two additional deductions, namely income tax and loan installment to the company. Also, verify whether it is an interest-free loan or if the company will charge any interest percentage on the same. Consult your account department before committing to any employee.
Regards, Jayshree
From India, Mumbai
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