Hi I am designing salaries for the sales force, n Im stuck on the fact if INCENTIVES ARE TAXABLE or how is the salary taxed...Juss the basic or what else is included. Smita
From India, New Delhi
From India, New Delhi
Dear Smita,
For finding out what is taxable and what is not, you have to refer to Income Tax Ready Reckoner. But it is not easy to understand it. Better talk to your Accounts/Finance person.A present there are very few benefits which are not taxable, otherwise everything is taxable. Basic Pay, DA, Incentives are definitely taxable. PF (whether employee or employer's share is not taxable). So is Superannuation benefit. But there are some perks or benefits which do not attract Income Tax but attract Fringe Benefit tax which could be even more than Income Tax. So better consult you Finance person.
KKT
From India, Delhi
13For finding out what is taxable and what is not, you have to refer to Income Tax Ready Reckoner. But it is not easy to understand it. Better talk to your Accounts/Finance person.A present there are very few benefits which are not taxable, otherwise everything is taxable. Basic Pay, DA, Incentives are definitely taxable. PF (whether employee or employer's share is not taxable). So is Superannuation benefit. But there are some perks or benefits which do not attract Income Tax but attract Fringe Benefit tax which could be even more than Income Tax. So better consult you Finance person.
KKT
From India, Delhi
All salary components that are allowances are taxed.
However, reimbursements are tax free.
Conveyance allowance ( above 800/- is taxable)
Medical allowance (above 1250 /- is taxable)
LTA (above 1250/- is taxable)
From India
However, reimbursements are tax free.
Conveyance allowance ( above 800/- is taxable)
Medical allowance (above 1250 /- is taxable)
LTA (above 1250/- is taxable)
From India
Hi Smita,
Besides the above components you can also provide
Meals Vouchers ( Sodexho) Rs 1500 / month which is not taxable.
Children education allowance - Rs 100 per child per month upto two children.
Anyways your query as far taxation is concerned is still not answered as yet..
Basically the taxable components are:-
Basic
HRA ( exemption as per the tax rules..lesser of three options)
All allowances except the above mentioned ones which are exempted as mentioned by my colleagues..
LTA upto the amount of bills submitted
Incentives
Less :
Rs one lac : Basic exemption (includes PF & investments in Insurance)
Housing loan principle & interest payout
Professional Tax
= taxable income
% tax as per the tax bracket as per the IT Act.
Hope this helps..
Regards,
Rajat Joshi
From India, Pune
Besides the above components you can also provide
Meals Vouchers ( Sodexho) Rs 1500 / month which is not taxable.
Children education allowance - Rs 100 per child per month upto two children.
Anyways your query as far taxation is concerned is still not answered as yet..
Basically the taxable components are:-
Basic
HRA ( exemption as per the tax rules..lesser of three options)
All allowances except the above mentioned ones which are exempted as mentioned by my colleagues..
LTA upto the amount of bills submitted
Incentives
Less :
Rs one lac : Basic exemption (includes PF & investments in Insurance)
Housing loan principle & interest payout
Professional Tax
= taxable income
% tax as per the tax bracket as per the IT Act.
Hope this helps..
Regards,
Rajat Joshi
From India, Pune
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