TAXATION & AUDITING

HRM-303

Chapter: 06
Income from Salary

Sajun Saha

Lecturer, dept of HRM.

JKKNIU, Trishal, Mymensingh.

INCOME FROM SALARY- CHAPTER OUTLINE

1) Definition of Salary.
2) Elements of Salary and Explanations.
3) What is a Provident fund.
4) Explain the different types of provident fund.
Section 20 of the ITO, 1984 Specifies 7 heads of income. Of these 7 heads “salary” is the first one.

Generally salary means periodical payment made for work to an employee from an employer for the
service rendered to him.

According to section 2(58) of the ITO,1984, salary includes:

a) Any pay or wages;
b) Any annuity, pension or gratuity;
c) Any fees, commission, allowances, perquisites or profits in lieu of, or in addition to salary or
wages;
d) Any advance of salary;
e) Any leave encashment.
1. Basic Salary;
2. Dearness Allowance;
3. Bonus;
4. Special Allowance;
5. Medical Allowance;
6. House rent allowance in cash;
7. Rent free accommodation;
8. Accommodation at a concession rate;
9. Entertainment allowance;
10. Conveyance allowance received in cash with no conveyance facility;
11. Conveyance facility provide for personal use;
12. Additional conveyance allowance along with conveyance facility;
13. Fees & commission;
14. servant allowance;
15. compensation;
16. Annuity;
17. Outstanding salary;
18. Advance against salary;
19. Pension;
20. Gratuity;
21. employer’s contribution to recognized provident fund;
22. Interest on recognized provident fund;
23. Accumulated balance of unrecognized provident fund;
24. Accumulated balance of recognized provident fund;
25. Wages;
26. Lunch / Tiffin allowance;
27. Special / professional allowance;
28. Overtime;
29. Leave encashment;
30. Others benefits.
Provident fund:
Provident fund is the fund where funds are accumulated during the active period of employees
for his financial protection at the end of his service life, amount contribution by the employee or
the employer or both employee and employer.

When an employee leave his service either on retirement or for any other reason, he get back the
money standing to the credit of his provident fund account. In case of death of the employee, the
amount is refunded to his nominee

Provident fund is a social security measure provided to employees for his rainy days for post
employment period.
 General Provident fund

Statutory Provident fund Contributory provident fund

Provident Recognized Provident fund

fund
Unrecognized Provident fund
THANKS EVERYBODY