ASSIGNMENT

Tax management
Salary income
Income from salary is the income received by an employer for services he is rendering or a
contract undertaken by him. This clause essentially assimilates the pay received by an employer
for the services provided by him under the contract of employment. It is also explain that salary
is a reward or recompense for service performed. Salary income included
 Pay
 Leave pay
 Bonus
 Wage
 Overtime
 Leave Encashment
 Perquisites
 Fees
 Commission
 Allowances
 Work conditions supplements (i.e., additional pay for unpleasant or dangerous)
 Profit in lieu of or in addition to the salary or wages
 Any other benefit provided by the employer to his employee

The following incomes are chargeable to tax under the head "salary" Any salary received
during the year. The receipt may be on account of current salary arrears or advance.
Valuation of perquisites, allowance and benefits according to section 13 and 14 of the
oncome tax ordinance, 2001 and income tax rule 2002. An employee shall not be entitled
to deduct any expenditure incurred by him in deriving salary income. An amount or
perquisite shall be treated as received by an employee whether it is paid or provided by
his employer (including present, past or prospective), or to him, to his associate or to a
third party on his behalf.

In addition to salary benefits

Benefits are any perks offered to employees in addition to salary. Benefits can be quite
valuable. These are following some as follows. Any amount received as consideration for an
agreement to enter into an employment relationship. Any amount received as consideration
for an employee's agreement to any conditions of employment or any change there.
Retirement benefits are funds set aside to provide people with an income or pension when
they end their careers. Retirement plans fit into two general categories defined benefit plans,
defined contribution plans. Paid time off (also referred to as PTO) is earned by employees
while they work. The three common types of paid time off are holidays, sick leave, and
vacation leave. Fringe benefits are a variety of non-cash payments are used to attract and
retain talented employees. They may include tuition assistance, flexible medical or child-care
spending accounts (pre-tax accounts to pay qualified expenses), other child-care benefits, and
 non-production bonuses (bonuses not tied to performance). The total amount of salary paid
by the employer to the domestic servants of an employee (e.g., housekeeper, driver, gardener
or other domestic servants) shall be included in the salary income of the employee for the tax
year in which the services are rendered.

Compensation for the termination of employment

Any amount received as compensation for the termination of employment. It includes
any compensation for redundancy or loss of employment and golden handshake
payments at the option given to employee. It may be included in total income of the
employee foe the tax year in which it is receive or it may be taxed as a separate block,
the rate of tax applicable to such amount shall be computed in accordance with the
formula A/B%. Here A is total tax payable or paid by the employee on his total taxable
for the three proceeding year and B is the employee total taxable income for the three
preceding tax year.

Benefits for accommodation

Facility in respect of housing may be in either the form of house rent allowance or an
accommodation provided by the employer. House rent allowance receivable in cash by
employees is taxable. Where an employer has provided an accommodation to his
employee, the value of such accommodation shall be amount that would have been paid
by the employee if he did not provide the accommodation. This amount shall be included
in salary income of the employee. The value shall not be taken less than forty-five
percent of the minimum of the time scale of the basic salary or the basic salary if the
time is not provided. In small cities, house rent allowance is allowed thirty percent only
of MTS or basic salary.

Benefits for conveyance

Where an employer has provided a conveyance to an employee, the value to be included
in salary income. If the use of motor vehicle is in private use of the employee than
amount to be added in salary shall be only 10% of the cost to the employer for acquiring
the motor vehicle or the fair market value of the vehicle at the commencement of lease,
if it is taken on lease. And if the use of motor vehicle is partly of private use of the
employee and partly for the official use, than amount to be added in salary shall be only
5% of the cost to the employer for acquiring the motor vehicle or the fair market value of
the vehicle at the commencement of lease, if it is taken on lease

Medical benefits
Medical insurance covers the costs of physician and surgeon fees, hospital rooms, and
prescription drugs. Dental and optical care might be offered as part of an overall benefits
package. Employers usually pay all or part of the premium for employee medical
insurance. Fifty three percent of firms offer medical insurance to full-time employees.
Only 12 percent offer it to part-time employees. Dental insurance is less common,
especially for part-time workers.