Section 15 — Salaries
Old Act equivalent: Section 15 of IT Act 1961 Sub-part: B.—Salaries
Statutory Text
(1) The following income shall be chargeable to income-tax under the head “Salaries”:—
(a) any salary due from an employer to an assessee in the tax year, whether paid or not;
(b) any salary paid or allowed to him in the tax year by or on behalf of an employer though not due or before it became due to him;
(c) any arrears of salary paid or allowed to him in the tax year by or on behalf of an employer, if not charged to income-tax for any earlier tax year.
(2) For the purposes of sub-section (1), employer includes former employer.
(3) If any salary paid in advance is included in the total income of any person for any tax year, it shall not be included again in the total income of such person when the salary becomes due.
(4) Any salary, bonus, commission or remuneration, by whatever name called, due to, or received by, a partner of a firm from the firm shall not be regarded as salary for the purposes of this section.
Sub-sections
Sub-section (1)
The following income shall be chargeable to income-tax under the head “Salaries”:—
(a) any salary due from an employer to an assessee in the tax year, whether paid or not;
(b) any salary paid or allowed to him in the tax year by or on behalf of an employer though not due or before it became due to him;
(c) any arrears of salary paid or allowed to him in the tax year by or on behalf of an employer, if not charged to income-tax for any earlier tax year.
Sub-section (2)
For the purposes of sub-section (1), employer includes former employer.
Sub-section (3)
If any salary paid in advance is included in the total income of any person for any tax year, it shall not be included again in the total income of such person when the salary becomes due.
Sub-section (4)
Any salary, bonus, commission or remuneration, by whatever name called, due to, or received by, a partner of a firm from the firm shall not be regarded as salary for the purposes of this section.
Provisos
None.
Explanations
None.
Tables
None.
Key Structure
- Applies to: Any assessee receiving salary from an employer (including former employer)
- Charging basis: Due or receipt basis — salary is taxable on whichever is earlier: (a) when it becomes due, or (b) when it is paid or allowed
- Arrears: Taxable in the year of payment, provided not already taxed in an earlier year
- Advance salary: Taxable when received; not taxed again when it becomes due (prevents double taxation)
- Exclusion: Partner’s remuneration from a firm is not salary under this section — taxed under “Profits and gains of business or profession” instead
- Time limits: Tax year in which salary is due or paid/allowed
- Monetary limits: None specified
Cross-References
- s016-salary-definition — Section 16 defines what “salary” includes for the purposes of this Part
- s017-perquisites — Section 17 defines “perquisite” (included in salary per section 16(e))
- s018-profits-in-lieu — Section 18 defines “profits in lieu of salary” (included in salary per section 16(f))
- s019-deductions — Section 19 provides deductions from income computed under this head
- s202-new-tax-regime-individuals — New tax regime applicable to salary income
- Section 157 (not yet ingested) — Relief for salary arrears (old Section 89)
Amendment Notes
None noted from the extracted pages.
Practical Notes
- The “due or receipt” basis means salary cannot escape tax merely because the employer has not paid it — if it has become due, it is taxable.
- Partner remuneration exclusion in sub-section (4) is critical — partnership firms must show partner remuneration under section 26 (PGBP) and not under Salaries.
- For advance salary, the assessee need not wait till it becomes due — it is taxed immediately on receipt but protected from double taxation by sub-section (3).