{"id":21890,"date":"2022-02-07T16:48:27","date_gmt":"2022-02-07T11:18:27","guid":{"rendered":"https:\/\/carajput.com\/blog\/?p=21890"},"modified":"2023-09-27T13:51:23","modified_gmt":"2023-09-27T08:21:23","slug":"salary-income-not-treated-as-income-under-salary-head","status":"publish","type":"post","link":"https:\/\/carajput.com\/blog\/salary-income-not-treated-as-income-under-salary-head\/","title":{"rendered":"Salary Income not treated as Income under Salary head"},"content":{"rendered":"<div id=\"ez-toc-container\" class=\"ez-toc-v2_0_58 counter-hierarchy ez-toc-counter ez-toc-light-blue ez-toc-container-direction\">\n<p class=\"ez-toc-title\">Page Contents<\/p>\n<label for=\"ez-toc-cssicon-toggle-item-69e185f0bea6c\" class=\"ez-toc-cssicon-toggle-label\"><span class=\"\"><span class=\"eztoc-hide\" style=\"display:none;\">Toggle<\/span><span class=\"ez-toc-icon-toggle-span\"><svg style=\"fill: #000000;color:#000000\" xmlns=\"http:\/\/www.w3.org\/2000\/svg\" class=\"list-377408\" width=\"20px\" height=\"20px\" viewBox=\"0 0 24 24\" fill=\"none\"><path d=\"M6 6H4v2h2V6zm14 0H8v2h12V6zM4 11h2v2H4v-2zm16 0H8v2h12v-2zM4 16h2v2H4v-2zm16 0H8v2h12v-2z\" fill=\"currentColor\"><\/path><\/svg><svg style=\"fill: #000000;color:#000000\" class=\"arrow-unsorted-368013\" xmlns=\"http:\/\/www.w3.org\/2000\/svg\" width=\"10px\" height=\"10px\" viewBox=\"0 0 24 24\" version=\"1.2\" baseProfile=\"tiny\"><path d=\"M18.2 9.3l-6.2-6.3-6.2 6.3c-.2.2-.3.4-.3.7s.1.5.3.7c.2.2.4.3.7.3h11c.3 0 .5-.1.7-.3.2-.2.3-.5.3-.7s-.1-.5-.3-.7zM5.8 14.7l6.2 6.3 6.2-6.3c.2-.2.3-.5.3-.7s-.1-.5-.3-.7c-.2-.2-.4-.3-.7-.3h-11c-.3 0-.5.1-.7.3-.2.2-.3.5-.3.7s.1.5.3.7z\"\/><\/svg><\/span><\/span><\/label><input type=\"checkbox\"  id=\"ez-toc-cssicon-toggle-item-69e185f0bea6c\"  aria-label=\"Toggle\" \/><nav><ul class='ez-toc-list ez-toc-list-level-1 ' ><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-1\" href=\"https:\/\/carajput.com\/blog\/salary-income-not-treated-as-income-under-salary-head\/#What_are_the_Salaries_Income_which_is_not_treated_as_Income_under_Salary_head\" title=\"What are the Salaries Income which is not treated as Income under Salary head?\u00a0\">What are the Salaries Income which is not treated as Income under Salary head?\u00a0<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-2\" href=\"https:\/\/carajput.com\/blog\/salary-income-not-treated-as-income-under-salary-head\/#Following_salaries_are_not_treated_as_income_under_the_head_of_salary_%E2%80%94\" title=\"Following salaries are not treated as income under the head of salary: \u2014\">Following salaries are not treated as income under the head of salary: \u2014<\/a><ul class='ez-toc-list-level-3'><li class='ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-3\" href=\"https:\/\/carajput.com\/blog\/salary-income-not-treated-as-income-under-salary-head\/#i_Salary_obtained_by_Member_of_State_Legislature_or_of_a_Parliament\" title=\"(i) Salary obtained by Member of State Legislature or of a Parliament\">(i) Salary obtained by Member of State Legislature or of a Parliament<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-4\" href=\"https:\/\/carajput.com\/blog\/salary-income-not-treated-as-income-under-salary-head\/#ii_Income_under_the_head_salary_getting_by_the_partners_from_his_partnership_firm\" title=\"(ii) Income under the head salary getting by the partners from his partnership firm?\">(ii) Income under the head salary getting by the partners from his partnership firm?<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-5\" href=\"https:\/\/carajput.com\/blog\/salary-income-not-treated-as-income-under-salary-head\/#iii_Income_from_Salary_by_proprietor_from_his_proprietorship_firm\" title=\"(iii) Income from Salary by proprietor from his proprietorship firm\">(iii) Income from Salary by proprietor from his proprietorship firm<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-6\" href=\"https:\/\/carajput.com\/blog\/salary-income-not-treated-as-income-under-salary-head\/#ivIncome_under_the_Head_Family_Pension_getting_by_widow_from_former_employer_of_her_husband\" title=\"(iv)Income under the Head Family Pension getting by widow from former employer of her husband\">(iv)Income under the Head Family Pension getting by widow from former employer of her husband<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-7\" href=\"https:\/\/carajput.com\/blog\/salary-income-not-treated-as-income-under-salary-head\/#_v_Income_as_Honorarium_obtained_by_the_visiting_doctors\" title=\"\u00a0(v) Income as Honorarium obtained by the visiting doctors\">\u00a0(v) Income as Honorarium obtained by the visiting doctors<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-8\" href=\"https:\/\/carajput.com\/blog\/salary-income-not-treated-as-income-under-salary-head\/#vi_Income_as_Remuneration_paid_to_College_lecturer_for_setting_up_question_bank_paper_by_a_university\" title=\"(vi) Income as Remuneration paid to College lecturer for setting up question bank paper by a university\">(vi) Income as Remuneration paid to College lecturer for setting up question bank paper by a university<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-9\" href=\"https:\/\/carajput.com\/blog\/salary-income-not-treated-as-income-under-salary-head\/#vii_RevenueIncome_from_a_musician_profession\" title=\"(vii) Revenue\/Income from a musician profession \">(vii) Revenue\/Income from a musician profession <\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-10\" href=\"https:\/\/carajput.com\/blog\/salary-income-not-treated-as-income-under-salary-head\/#viii_Acting_as_guarantee_commission_agent\" title=\"(viii) Acting as guarantee commission agent\">(viii) Acting as guarantee commission agent<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-11\" href=\"https:\/\/carajput.com\/blog\/salary-income-not-treated-as-income-under-salary-head\/#ix_In_case_of_Directors_Remuneration\" title=\"(ix) In case of Directors Remuneration\">(ix) In case of Directors Remuneration<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-12\" href=\"https:\/\/carajput.com\/blog\/salary-income-not-treated-as-income-under-salary-head\/#x_Fees_from_as_Directors\" title=\"(x) Fees from as Director\u2019s \">(x) Fees from as Director\u2019s <\/a><\/li><\/ul><\/li><\/ul><\/nav><\/div>\n<p><a href=\"https:\/\/carajput.com\/blog\/wp-content\/uploads\/2020\/12\/income-tax-1024x683-1.jpg\"><img loading=\"lazy\" decoding=\"async\" class=\" wp-image-11637\" src=\"https:\/\/carajput.com\/blog\/wp-content\/uploads\/2020\/12\/income-tax-1024x683-1-300x200.jpg\" alt=\"www.carajput.com; income tax Act, 1949-TDS\" width=\"1030\" height=\"686\" srcset=\"https:\/\/carajput.com\/blog\/wp-content\/uploads\/2020\/12\/income-tax-1024x683-1-300x200.jpg 300w, https:\/\/carajput.com\/blog\/wp-content\/uploads\/2020\/12\/income-tax-1024x683-1-768x512.jpg 768w, https:\/\/carajput.com\/blog\/wp-content\/uploads\/2020\/12\/income-tax-1024x683-1.jpg 1024w\" sizes=\"(max-width: 1030px) 100vw, 1030px\" \/><\/a><\/p>\n<h2><span class=\"ez-toc-section\" id=\"What_are_the_Salaries_Income_which_is_not_treated_as_Income_under_Salary_head\"><\/span><span style=\"color: #000080;\"><strong>What are the Salaries Income which is not treated as Income under Salary head?\u00a0<\/strong><\/span><span class=\"ez-toc-section-end\"><\/span><\/h2>\n<p><a href=\"https:\/\/carajput.com\/blog\/income-tax\/\">Income<\/a> taxable under the head of \u201csalary\u201d when there is existing a relationship of employer and employee between payer and payee. If such relationship does not exist between payer and payee, income shall not be taxable under the head \u201csalary\u201d.<\/p>\n<h2><span class=\"ez-toc-section\" id=\"Following_salaries_are_not_treated_as_income_under_the_head_of_salary_%E2%80%94\"><\/span><span style=\"color: #ff0000;\"><strong>Following salaries are not treated as income under the head of salary: \u2014<\/strong><\/span><span class=\"ez-toc-section-end\"><\/span><\/h2>\n<h3><span class=\"ez-toc-section\" id=\"i_Salary_obtained_by_Member_of_State_Legislature_or_of_a_Parliament\"><\/span><span style=\"color: #000080;\"><strong>(i) Salary obtained by Member of State Legislature or of a Parliament<\/strong><\/span><span class=\"ez-toc-section-end\"><\/span><\/h3>\n<ul>\n<li>Member of Legislative Assembly\/ Member of Parliament they are not government employee because they are elected by public from their respective constituency\/Locality\/Areas. They discharge their duties for public interest within their respective constituency, so they cannot treated as a government employee for Income Tax Act prospective. A Member of Parliament is not an employee of Govt &amp; therefore, Salary received by him as a Member of Parliament \/Member of Legislative Assembly shall not be chargeable to tax under the head \u201cSalaries\u201d. On the other hand it shall be taxable under \u201cIncome from other Sources\u201d head.<\/li>\n<li>Provisions of u\/s 57 shall not provide for any deduction of expenditure from such said salary incomes, etc. of a Member of Legislative Assembly\/ Member of Parliament. As such no deduction can be available for expenditure under section 57.<\/li>\n<\/ul>\n<table style=\"height: 576px;\" width=\"1074\">\n<tbody>\n<tr>\n<td width=\"64\"><em>S. No.<\/em><\/td>\n<td width=\"132\"><em>Nature of Allowance<\/em><\/td>\n<td width=\"111\"><em>Section<\/em><\/td>\n<td width=\"403\"><em>Treatment<\/em><\/td>\n<\/tr>\n<tr>\n<td width=\"64\">(i)<\/td>\n<td width=\"132\">Special<\/p>\n<p>Allowance<\/td>\n<td width=\"111\">10(14)<\/td>\n<td width=\"403\">Any special allowances such as conveyance allowance, Uniform allowance, academic allowance\u2019 helper allowance etc. granted to meet expenses wholly or partially or necessarily and exclusively to performance of official duties or employment to the extent to which such expenses are actually incurred for the official purpose are exempted up to the prescribed limit of U\/s 10(14) &amp; any surplus left out will be taxable<\/td>\n<\/tr>\n<tr>\n<td width=\"64\">(ii)<\/td>\n<td width=\"132\">Daily Allowance<\/td>\n<td width=\"111\">10(17)<\/td>\n<td width=\"403\">Daily allowances received by Member of Legislative or Member of Parliament Assembly to meet out there daily expenses (M.L.A.) are exempted.<\/td>\n<\/tr>\n<tr>\n<td width=\"64\">(iii)<\/td>\n<td width=\"132\">Constituency Allowance<\/td>\n<td width=\"111\">10(17)<\/td>\n<td width=\"403\">Constituency allowance received by any person of his membership of any State Legislature<\/td>\n<\/tr>\n<\/tbody>\n<\/table>\n<p>The remuneration received by MLA shall not attracted u\/s 15\u00a0of income tax act; when provisions of\u00a0sec 15\u00a0are not attracted to remuneration received by him, as well as,\u00a0section\u00a017 will not be attracted, in respect of reimbursement of medical expenses, as\u00a0section\u00a017 only extends definition of \u2018salary\u2019, by providing certain items mentioned therein, to be included in salary<\/p>\n<p>According to\u00a0section 15\u00a0there must be built a relationship of employer and employee between payer and payee, whether in existence, or in the past. For this section employer and employee relationship means where employee is appointed by employer and employer have control over the work of employee, and employer must have a right to terminate or discharge the employee. This basic conditions is missing in the\u00a0case\u00a0of Member of Legislative Assembly (M.L.A.)\/ Member of Parliament (M.P.), as they are not employed by anybody, rather, they are elected by the public by election process for their respective constituencies, and it is consequent upon such election, that they acquire constitutional position, and discharge constitutional functions and obligations. that may be they receive remunerations after swearing in, but then, it cannot be said to be salary, with the meaning of\u00a0section 15, and therefore, the remuneration, received by the Member of Legislative Assembly (M.L.A.)\/ Member of Parliament (M.P.), shall not be taxed, under the head &#8216;income form salary&#8217;, but it will be taxed under the head, &#8216;income from other sources&#8217;.<\/p>\n<p>If the provisions of U\/s 15 are not attracted to the remuneration received by the assesse , then it will also not\u00a0 attracted \u00a0section 17, in respect of reimbursement of medical expenses, as section 17 only extends the definition of \u2018salary\u2019, by providing certain item mentioned in section 17, to be included in salary. \u2013\u00a0<em>[Commissioner of Income Tax v. Shiv Charan Mathur (2008) 306 ITR 126:\u00a0219 CTR 292 (Raj.)]<\/em><\/p>\n<p><a href=\"https:\/\/carajput.com\/press-releases\/employer-s-tds-liability-under-new-default-tax-regime-u-s.pdf\"><strong>Employer\u2019s TDS liability under New \u2018default\u2019 Tax Regime u\/s 115BAC(1A)<\/strong><\/a><\/p>\n<h3><span class=\"ez-toc-section\" id=\"ii_Income_under_the_head_salary_getting_by_the_partners_from_his_partnership_firm\"><\/span><span style=\"color: #000080;\"><span style=\"color: #000080;\">(ii) Income under the head <span style=\"font-size: 18.72px;\">salary<\/span> getting by the partners from his partnership firm?<\/span><\/span><span class=\"ez-toc-section-end\"><\/span><\/h3>\n<ul>\n<li>Salary given to partners by the firm Taxable under the head of \u201cProfits &amp; Gains from business or profession\u201d as salary paid to a partner by a firm is an appropriation of profits. Hence the amount of salary being received by the partner shall not be subject to tax under the head \u201cSalary\u201d.<\/li>\n<li>However, the said amount of remuneration shall be taxed under the head \u201cBusiness Income\u201d since the partner cannot be an employee of the entity.<\/li>\n<\/ul>\n<h3><span class=\"ez-toc-section\" id=\"iii_Income_from_Salary_by_proprietor_from_his_proprietorship_firm\"><\/span><span style=\"color: #000080;\"><strong>(iii) Income from Salary by proprietor from his proprietorship firm<\/strong><\/span><span class=\"ez-toc-section-end\"><\/span><\/h3>\n<ul>\n<li>Proprietor and proprietorship firm are not distinguish form each other and no one can earn from himself, and proprietor is not an employee. Hence any amount received by him would be treated as salary.<\/li>\n<\/ul>\n<h3><span class=\"ez-toc-section\" id=\"ivIncome_under_the_Head_Family_Pension_getting_by_widow_from_former_employer_of_her_husband\"><\/span><span style=\"color: #000080;\"><strong>(iv)Income under the Head Family Pension getting by widow from former employer of her husband<\/strong><\/span><span class=\"ez-toc-section-end\"><\/span><\/h3>\n<ul>\n<li>Family pension received by legal heirs or widow of deceased employee shall not be taxed under the head \u201csalary\u201d, but it shall be taxed under Income from Other sources. Any family pension received by the widow or legal heirs of a deceased employee shall not taxed under the head \u201cSalaries\u201d However is taxable under the head \u201cIncome from other Sources\u201d.<\/li>\n<\/ul>\n<p><strong>THE DEDUCTION FOR FAMILY PENSION :\u2014<\/strong><\/p>\n<ul>\n<li>A standard deduction is available, which deducts 1\/3 of the family pension or Rs. 15,000\/- whichever is less, from the family pension.<\/li>\n<\/ul>\n<p><span style=\"color: #000080;\">FAMILY PENSION ELIGIBLETY<\/span><\/p>\n<ul>\n<li>Unmarried daughter of deceased employee<\/li>\n<li>Children below 25 years of age<\/li>\n<li>Spouse of deceased employee<\/li>\n<li>Children of \u201cDivorced wife\u201d who loses the status of a legally wedded wife and as such is not entitled to the award of family pension. However, the eligible child\/children from a divorced wife will be entitled to the share of family pension which the mother would have received at the time of death of her husband had she not been divorced.<\/li>\n<\/ul>\n<p><span style=\"color: #000080;\"><strong>Family pension is chargeable as \u201cIncome from other sources\u201d.\u00a0<\/strong><\/span><\/p>\n<table style=\"height: 872px;\" width=\"1048\">\n<tbody>\n<tr>\n<td colspan=\"3\" width=\"699\">PROVISIONS ILLUSTRATED:\u2014<\/td>\n<\/tr>\n<tr>\n<td colspan=\"3\" width=\"699\">Mr. \u2018A\u2019, a Government servant, died on 01.04.2019, while in service. In terms of the rules and regulations governing his service, his widow Mrs. \u201cA\u201d, is paid a family pension of ` 40000\/-p.m. and a dearness allowance @ 90% thereof. Compute income of Mrs. A for the assessment year 2020-21.<\/td>\n<\/tr>\n<tr>\n<td colspan=\"3\" width=\"699\">SOLUTION:\u2014<\/td>\n<\/tr>\n<tr>\n<td colspan=\"3\" width=\"699\">Family pension received by Mrs. \u2018A\u2019 is taxable under the head \u201cIncome from other sources\u201d. She can claim the lower of Rs. 15,000\/-or 1\/3rd of her family pension, as deduction under section 57 in respect of such income as per calculation given below :\u2014<\/td>\n<\/tr>\n<tr>\n<td width=\"44\"><\/td>\n<td width=\"500\"><em>Particulars<\/em><\/td>\n<td width=\"155\"><em>Amount (In Rs.)<\/em><\/td>\n<\/tr>\n<tr>\n<td width=\"44\">(i)<\/td>\n<td width=\"500\">Family Pension received (Rs. 40000 x 12 months)<\/td>\n<td width=\"155\">480000<\/td>\n<\/tr>\n<tr>\n<td width=\"44\">(ii)<\/td>\n<td width=\"500\"><em>Add : Dearness Allowance @ 90% of Rs. 480000\/-<\/em><\/td>\n<td width=\"155\">432000<\/td>\n<\/tr>\n<tr>\n<td width=\"44\">(iii)<\/td>\n<td width=\"500\">Total Pension received<\/td>\n<td width=\"155\">912000<\/td>\n<\/tr>\n<tr>\n<td width=\"44\">(iv)<\/td>\n<td width=\"500\"><em>Less : Deduction under the \u00a0section of 57 : Least of the following :<\/em><\/td>\n<td width=\"155\"><\/td>\n<\/tr>\n<tr>\n<td width=\"44\"><\/td>\n<td width=\"500\">(a) 1\/3rd of Gross Pension (Rs. 912000 x 1\/3) = Rs. 304000\/-<\/td>\n<td width=\"155\">15,000<\/td>\n<\/tr>\n<tr>\n<td width=\"44\"><\/td>\n<td width=\"500\">(b) Maximum deduction Rs. 15,000\/-<\/td>\n<td width=\"155\"><\/td>\n<\/tr>\n<tr>\n<td width=\"44\">(v)<\/td>\n<td width=\"500\">TAXABLE FAMILY PENSION (iii \u2013 iv)<\/td>\n<td width=\"155\">897000<\/td>\n<\/tr>\n<\/tbody>\n<\/table>\n<h3><img loading=\"lazy\" decoding=\"async\" class=\"alignnone wp-image-23379\" src=\"https:\/\/carajput.com\/blog\/wp-content\/uploads\/2022\/02\/pension.jpg\" alt=\"pension taxation \" width=\"1055\" height=\"1350\" srcset=\"https:\/\/carajput.com\/blog\/wp-content\/uploads\/2022\/02\/pension.jpg 720w, https:\/\/carajput.com\/blog\/wp-content\/uploads\/2022\/02\/pension-235x300.jpg 235w\" sizes=\"(max-width: 1055px) 100vw, 1055px\" \/><\/h3>\n<h3><span class=\"ez-toc-section\" id=\"_v_Income_as_Honorarium_obtained_by_the_visiting_doctors\"><\/span><span style=\"color: #000080;\"><strong>\u00a0<\/strong><strong>(v) Income as Honorarium obtained by the visiting doctors<\/strong><\/span><span class=\"ez-toc-section-end\"><\/span><\/h3>\n<ul>\n<li>Honorarium obtained by visiting doctors is not treated as salary because it is not covered by conditions of service of the doctors. Hence the same shall not be treated as profit in lieu of salary hence it is treated as professional fee. [<em>Income tax officer v. Ranjan R Mehta (Dr) (1989)(ITAT Ahmedabad))<\/em>]<\/li>\n<li>A medical institute engaged number of visiting doctors as specialists for a limited period of one year only. Visiting doctors had to follow certain terms regarding attendance of medical institut. They had to refer a certain number of patients to assessee-institute.<\/li>\n<li>Assessee-institute collected fees\/charges from patients and paid same to visiting doctors after deducting a 10 per cent of collection as administrative charges. Assessee-institute is provided infrastructure for visiting doctors to carry out their professional activities in its premises in lieu of commission and whole arrangement was merely a profit-sharing arrangement between parties for fees collected.<\/li>\n<li>Hence, in absence of any employer-employee relation, payments made to visiting doctors cannot \u00a0be held to be salary and, consequently, assessee-institute could not be held liable and penalised for not deducting tax at source. (Above case related AY : 1990-91) \u2013\u00a0<em>[<span style=\"color: #0000ff;\"><a style=\"color: #0000ff;\" href=\"https:\/\/www.caindelhiindia.com\/service\/income-tax-return-filing\">Income tax<\/a><\/span> officer v.\u00a0Calcutta Medical Research\u00a0(1999)]<\/em><\/li>\n<\/ul>\n<h3><span class=\"ez-toc-section\" id=\"vi_Income_as_Remuneration_paid_to_College_lecturer_for_setting_up_question_bank_paper_by_a_university\"><\/span><span style=\"color: #000080;\"><strong>(vi) Income as Remuneration paid to College lecturer for setting up question bank paper by a university<\/strong><\/span><span class=\"ez-toc-section-end\"><\/span><\/h3>\n<ul>\n<li>Income or remuneration is not getting from the employer hence it is not treated as \u2018salary\u2019 U\/s 15 and is taxable under the head \u201cIncome from other sources\u201d.<\/li>\n<\/ul>\n<h3><span class=\"ez-toc-section\" id=\"vii_RevenueIncome_from_a_musician_profession\"><\/span><span style=\"color: #000080;\"><strong>(vii) Revenue\/Income from a musician<\/strong> <\/span><strong><span style=\"color: #000080;\">profession<\/span> <\/strong><span class=\"ez-toc-section-end\"><\/span><\/h3>\n<ul>\n<li>Amount received from profession as a musician, incidentally rendered services to a college of music shall not be treated as salary because there does not existed and employer and employee relationship. [<em>Commissioner of Income Tax v. Jnan Parkash Ghosh (1994)<\/em>].<\/li>\n<\/ul>\n<h3><span class=\"ez-toc-section\" id=\"viii_Acting_as_guarantee_commission_agent\"><\/span><span style=\"color: #000080;\"><strong>(viii) Acting as guarantee commission agent<\/strong><\/span><span class=\"ez-toc-section-end\"><\/span><\/h3>\n<ul>\n<li>Earning from Commission income getting by the taxpayers from a Bank for performing as guarantee commission agent shall not be considered to be taxed under the head of salary. [<em>Bhargava (K.P.) v. Commissioner of Income Tax (1954)]<\/em><\/li>\n<\/ul>\n<h3><span class=\"ez-toc-section\" id=\"ix_In_case_of_Directors_Remuneration\"><\/span><span style=\"color: #000080;\"><strong>(ix) In case of Directors<\/strong> <strong>Remuneration<\/strong><\/span><span class=\"ez-toc-section-end\"><\/span><\/h3>\n<ul>\n<li>Director Remuneration shall be taxed under salary, if the director is an employee of the company in terms of a contract of employment or the AOA. Otherwise it is taxable as income from business and profession or income from other sources depending upon the facts of each case.<\/li>\n<li>Moreover, any amount payable to any whole time director, who is also an employee of the company would be treated as salary. Otherwise, the same would be treated as \u201cOther Income\u201d.<\/li>\n<li>A director is an employee of a company or not is dependent on nature and character of appointment and terms and conditions of employment or other provisions contained in MOA and AOA. When board of directors of a company by a resolution appointed assessee as a whole-time director for managing affairs of company by fixing his remuneration in accordance with articles and memorandum of association of company,<\/li>\n<li>it could be said that there was an employer and employee relationship between company and assesse. Hence, remuneration received by assessee was assessable under section 15 not under section 56.(Related Assessment years: 1993-94, 1995-96 &amp; 1996-97) \u2013\u00a0<em>[Sajid Mowjee v. Income tax officer (2005)]<\/em><\/li>\n<li>Where employer-company purchased single premium deferred annuity policy out of commission payable to employee managing directors (assessees) in their names, amounts utilised for obtaining deferred annuity policies would form part of remuneration payable to assessee and as such be chargeable under head \u2018Salaries\u2019. (Related Assessment year : 1973-74) \u2013\u00a0<em>[Commissioner of Income Tax v. Navnit Lal Sakar Lal (2001)]<\/em><\/li>\n<\/ul>\n<h3><span class=\"ez-toc-section\" id=\"x_Fees_from_as_Directors\"><\/span><span style=\"color: #000080;\"><strong>(x) Fees from as Director\u2019s <\/strong><\/span><span class=\"ez-toc-section-end\"><\/span><\/h3>\n<ul>\n<li>Sitting fees given to the director for attending Board of Director meeting not covered under the head of salary but taxable under the head of \u201cIncome from other sources\u201d. Where assessee, a B-tech from IIT, had provided professional services for students of coaching institutes for which he was provided lump sum amount as per contract; coaching institute deducted Tax deduction at source\u00a0 by treating such payments as professional; and assessee was free to do work with other institutions also,\u00a0Held\u00a0that the relationship between the assessee and the coaching institute was of consultant\/professional and therefore, the assessees receipts were professional and expenses claimed by the assessee were to be considered by the AO.\u00a0[In favour of assessee] (Related Assessment year: 2009-10) &#8211;\u00a0[Arvind Singh v. Income tax officer, Kota\u00a0(2017) (ITAT Jaipur)]<\/li>\n<li>Where the assessee was appointed as an Assistant Honorary Surgeon in a Hospital and medical attendant of LIC, it was held that the income from honorarium received by the assessee-doctor from hospital and LIC should be assessed as income from profession and not under the head \u2018Salary\u2019 since there was no employer-employee relationship in the case of the assessee and hospital\/LIC.\u00a0\u2013\u00a0<em>[Sixth Income tax officer v. Dr. N.P. Sheth (1989) (ITAT Bombay)]<\/em><\/li>\n<li>In case of Assesse Hindu Undivided Family was partner in a firm through its Karta who received salary payments from firm in terms of partnership deed for services rendered by him to firm then such salary is determine without including the income of Hindu Undivided Family unless it has direct link with the investment of family fund in the said firm.<\/li>\n<li>It is a well-established rule that payment form of remuneration to a coparcener of a Hindu Undivided Family or the Karta by a firm in which the Hindu Undivided Family is a partner, cannot be assessed as the income of the family unless it has a direct nexus with the investment of funds of the family in the firm.<\/li>\n<li>In other word if family funds is not invested in the said firm, it cannot be treated as the income of the family. In the instant case, the disputed payments having been made to the Karta for services rendered by him to the firm and without any detriment to the funds invested by the assesse- Hindu Undivided Family in the firm, could not be treated as the income of the assesse- Hindu Undivided Family. (above is related AY: 1973-74 or 1972-73) \u2013 [Laxman Das v. Commissioner of Income Tax (1982)]<\/li>\n<\/ul>\n<p><img loading=\"lazy\" decoding=\"async\" class=\"alignnone size-full wp-image-24731\" src=\"https:\/\/carajput.com\/blog\/wp-content\/uploads\/2022\/02\/16.jpg\" alt=\"form 16 and 26AS\" width=\"1080\" height=\"1080\" srcset=\"https:\/\/carajput.com\/blog\/wp-content\/uploads\/2022\/02\/16.jpg 1080w, https:\/\/carajput.com\/blog\/wp-content\/uploads\/2022\/02\/16-300x300.jpg 300w, https:\/\/carajput.com\/blog\/wp-content\/uploads\/2022\/02\/16-1024x1024.jpg 1024w, https:\/\/carajput.com\/blog\/wp-content\/uploads\/2022\/02\/16-150x150.jpg 150w, https:\/\/carajput.com\/blog\/wp-content\/uploads\/2022\/02\/16-768x768.jpg 768w, https:\/\/carajput.com\/blog\/wp-content\/uploads\/2022\/02\/16-800x800.jpg 800w\" sizes=\"(max-width: 1080px) 100vw, 1080px\" \/><\/p>\n<p><strong><em>Popular Blogs:-<\/em><\/strong><\/p>\n<ul>\n<li><strong><span style=\"color: #333399;\"><a style=\"color: #333399;\" href=\"https:\/\/carajput.com\/learn\/new-tds-deduction-provision-prevent-cash-transactions-of-more-than-1-crore-section-194n.html\">New TDS deduction No cash transactions exceeding 1 Crore -Section 194N<\/a><\/span><\/strong><\/li>\n<li><strong><span style=\"color: #333399;\"><a style=\"color: #333399;\" href=\"https:\/\/carajput.com\/learn\/deductions-under-section-80ccd-of-income-tax-act.html\">Deduction u\/s 80CCD of Income Tax Act, 1961<\/a><\/span><\/strong><\/li>\n<\/ul>\n","protected":false},"excerpt":{"rendered":"<p>What are the Salaries Income which is not treated as Income under Salary head?\u00a0 Income taxable under the head of \u201csalary\u201d when there is existing a relationship of employer and employee between payer and payee. If such relationship does not exist between payer and payee, income shall not be taxable under the head \u201csalary\u201d. Following &hellip;<\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[1],"tags":[3908],"aioseo_notices":[],"_links":{"self":[{"href":"https:\/\/carajput.com\/blog\/wp-json\/wp\/v2\/posts\/21890"}],"collection":[{"href":"https:\/\/carajput.com\/blog\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/carajput.com\/blog\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/carajput.com\/blog\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/carajput.com\/blog\/wp-json\/wp\/v2\/comments?post=21890"}],"version-history":[{"count":5,"href":"https:\/\/carajput.com\/blog\/wp-json\/wp\/v2\/posts\/21890\/revisions"}],"predecessor-version":[{"id":25455,"href":"https:\/\/carajput.com\/blog\/wp-json\/wp\/v2\/posts\/21890\/revisions\/25455"}],"wp:attachment":[{"href":"https:\/\/carajput.com\/blog\/wp-json\/wp\/v2\/media?parent=21890"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/carajput.com\/blog\/wp-json\/wp\/v2\/categories?post=21890"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/carajput.com\/blog\/wp-json\/wp\/v2\/tags?post=21890"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}