For a payment to be taxed under the head Salaries, there must be
Aan employer employee relationship
Ba written service agreement only
Ca monthly payment schedule
Da registered place of business
Answer & Solution
Correct answer: A. an employer employee relationship
1. Not every payment a person receives for work is salary.
2. Every payment made by an employer to his employee for service rendered is chargeable as salaries.
3. So the relationship, not the label on the payment, decides the head.
4. A fee paid to someone who is not an employee falls under a different head entirely.
_Source: ICAI Income Tax Law, Ch3 'Heads of Income', Unit 1 'Salaries', section 1.2_
Related questions
Provident fund is discussed in the salaries chapter because it isLeave encashment received by an employee is charged underGratuity received by an employee is dealt with under which head of income?In the salary computation, transport allowance appears asThe leave travel concession exemption is available toDeduction for entertainment allowance and professional tax is allowableUnder the default tax regime, house rent allowance isIn the computation of income under the head Salaries, gross salary is the total of