The relationship between the employer and the employee is
very important if you want to make the employee's income
taxable in the salary head.
Take Sujata as an example. She has a job in Chopra Films
where she gets a monthly remuneration of 2 lakhs.
What is her job? She has to act in all the films that
Chopra produces.
In this case, she must have contracted. So, there is a
relationship between the employer and the employee.
Chopra is the employer and Sujata is the employee. So, in
Sujata's hands, the salary head's income will be taxable.
But here, if Sujata had not contracted with anyone, she
would have made the films according to her income.
If it is a 60-day job, then it is a 60-day shooting. If it
is an 80-day job, then it is an 80-day shooting.
She is not contracting anyone's salary.
So, in that case, if Mr. Chopra comes, he will do Chopra's
work. If Mr. Rishabh comes, he will do his work.
If Mr.
Garewala comes, he will make his film.
Isn't it so?
If this is the case, then is there a contract in that case?
Is there a salary contract that I will work with you for a
year? Isn't it so?
You have to pay me according to the number of days.
So, in that case, will the salary head be taxable? No.
Because there is no relationship between the employer and
the employee.
In that case, there is a principle-to-principle
relationship.
So, in that case, Sujata will go for business income.
In a way, it is assumed that she has taken professional
services.
Let's move ahead.
Now, for example, there is a director of a company.
It is a good post. It is a big post.
Let's assume that a person is a director of a company.
Now, will he go for his salary or business?
This is something to check.
So, check if he has a letter of appointment.
In his letter of appointment, check what he is getting.
If he is getting monthly salaries, then it is obvious that
he is a salaried person.
His income will be taxable in salary.
But, let's assume that he is giving profit-sharing or as a
principle-to-principle service.
There is no relationship between the employer and the
employee.
He gets fees. He does not get salary.
What does he get? Fees.
On which, TDS is deducted.
Under section 194J of professional services.
What is this? I will tell you later.
He does not get salary. He gets fees.
In that case, his business income will be taxable.
This is a simple point.
Shall we move ahead?
Let's move to the third point.
The third point is foregoing of the salary.
Friends, what work is being done in this?
You know the condition of India.
Law is not made.
Those who break it, come first.
So, people see that the salary that I receive, my income
will be taxable in the salary head.
So, what should we do?
Let's do one thing.
Let's take the salary and show it in the papers that I have
given the salary to someone else.
I have contracted with my employer that I forego my salary.
On my behalf, give the salary to someone else.
Give it to a temple, give it to a gurudwara, give it to all
these people.
Distribute my salary among the poor.
In that case, what did that person show?
He showed that he did not receive the salary himself.
He distributed it among those people.
Assume that the person was his acquaintance.
After deducting some money from there, he got the money.
So, the government said, tell me one thing.
We have kept UPSC people here.
Are we mad?
You will go and tell your employer that, brother, don't
give me the salary.
Give the salary to some temple.
We have a setting with the priest of the temple.
I will tell the priest that, okay, you are receiving my
salary of one lakh rupees.
You do one thing.
You keep five thousand rupees yourself.
Give me five thousand rupees later.
Can there be a setting?
So, the government said, the setting that you are thinking
of, we have also done a lot of settings in our time.
Okay? So, the government put this third point, that once
your salary is acquired, your salary is due, then if you
make a waiver for it, the subsequent waiver by the employee
does not absolve him from the liability to income tax.
You will have to pay tax on it.
Your income will be accepted.
You will have to pay tax on it.
Even if you make a waiver for it, your income will be
accepted.
Read this example, friends.
She is an employee.
She tells her employer that, brother, I don't want a salary.
I have lost faith in the world of religion.
This is a destructive world, friends.
I have no one in this world.
And this salary of mine, you can give it to a charitable
institution.
Now, in that case, tax will be imposed.
What is he saying?
In this case, Mr.
A cannot claim that he cannot be charged in respect of the
salary.
He cannot claim it.
This is just an application of income.
His salary is due.
In a way, when he receives it, it will be accepted that he
received it and applied for his income.
Therefore, he will apply only when he receives his income.
Therefore, on a due basis, we will accept that he has
received his salary and it will be taxable in his hands.
Yes, if it is a charitable trust, an ATG one, then you will
get a deduction for it.
Let's talk about that later.
But this was the main point.
Now, suppose a person surrenders his salary.
This point is applicable only for government employees.
Government employees get a salary and they surrender their
salary.
Sometimes, there is a problem in the country.
The Prime Minister has to deposit money in the relief fund.
So, he says, we will receive our salary and then deposit it.
We will surrender our salary for a month.
I will leave my salary for a month in the name of my poor
brothers.
But he should be a government employee.
He should be a government employee.
In that case, his salary will be taken as exempt.
Friends, look at this.
These are the same points.
But now, what is the difference between private and
government employees?
That is why I say that government employees get more
benefits.
Okay, sir?
Now, suppose the salary is paid tax-free.
What does salary paid tax-free mean?
For example, you have an employer.
Can the employer…
Think about it and tell me.
Can the employer
give his employee's name to the entire neighborhood?
Yes, he can.
Can he give his employee's name to his house? Yes, he can.
Can he give his employee's name to his car? Yes, he can.
The employee who pays tax on his salary, can he pay it to
the employer?
Think about it and tell me.
Can he do it?
The answer is yes.
Sir, he can.
I have told you that it is a contract between them.
You can contract anything.
Brother, the tax that you will get, your employer will pay
it to your brother.
Can he do that too?
The salary that he is giving to the gardener, the tax that
will be imposed on the gardener, can Jethalal pay the tax?
Of course, he can.
No one has said that he cannot.
It is not written.
Now, in that case, understand this, friends.
What am I talking about?
It is an important topic.
Please understand this.
For example, his salary is Rs.
10 lakhs.
And on that Rs.
10 lakhs salary, suppose, on that Rs.
10 lakhs salary, suppose, Rs.
1 lakh tax will be imposed.
Rs. 1 lakh tax will be imposed.
And this tax, who is paying it?
Jethalal.
In a way, what is happening?
This is his in-hand salary.
Which he is receiving.
Rs. 10 lakhs.
And what is this Rs.
1 lakh?
In a way, it has become his facility.
What has happened, friends?
It has become his facility.
In a way, it has become his facility.
In a way, it has become a part of his salary.
Jethalal's cost.
How much will be Jethalal's cost to hire the gardener?
Rs. 11 lakhs.
He is giving Rs.
10 lakhs as salary.
Rs. 1 lakh.
He is paying the tax himself.
So, how much will be Jethalal's outflow?
Rs. 11 lakhs.
What is that?
His gardener's total salary.
In this case, will the gardener's salary be Rs.
10 lakhs or Rs.
11 lakhs?
I had said, see, what is the cost of the company?
He is receiving Rs. 10 lakhs.
In a way, he is taking a benefit of Rs.
1 lakh.
He is taking a benefit of doing a job.
So, what will happen?
Rs. 11 lakhs.
But in this case, the government says, if something like
this happens, then it will be exempted in the hands of the
employees.
In this case, it will be considered as 10 lakhs.
If employer pays tax on your salary, the tax on employee's
hands will be exempted.
This is the point, friends.
Read it once more so that clarity comes.
Tax free on salary is the fifth point.
In other words, it means that employer bears the burden of
tax on the salary of the employee.
In such case, income from salaries in the hands of employee
will consist of salary income and the tax he has paid.
In other words, 10 lakhs plus 1 lakh more.
However, according to Section 10, income tax paid by the
employer on the non-monetary requisite on behalf of the
employee will be exempted in the hands of the employee.
In the hands of the employer, 1 lakh will be exempted and
10 lakhs will be taxable.
Come to the next point, friends.
Place of accrual of salary.
Friends, what does it say?
Under Section 9.1.2, the salary you have earned in India.
Earned in India.
What does it mean to earn salary?
When do you earn salary?
When you provide services.
If I say that you have earned salary in India, then where
will you provide services?
In South Africa or in India?
In India.
If you provide services in India, then it will be assumed
that you have earned salary in India.
Let's read it once.
Salary earned in India is deemed to accrue or arise in
India.
It will be assumed that it has been accrued in India.
Even if you get its payment abroad.
It will be assumed that it will be taxable in India.
Okay, friends.
Let's take an example of this.
For example, there was a movie called Tiger.
For example, there was a shooting of Tiger in India.
After the shooting, our Sallu bhai went to Switzerland with
Katrina madam for a holiday.
The producer of the movie said,
Madam, what is your salary?
Katrina said, I am with Sallu bhai.
Your Sallu bhai and my Sallu.
I am with Sallu in Switzerland.
You do one thing.
I have an account in Switzerland.
Send money there.
He said, okay madam, no problem.
So, what will be assumed in that case?
Where did he provide services?
Assume that the movie was shot in India.
He has provided services in India.
So, what will be assumed in that case?
Where did he earn his salary?
Even if he receives it in Switzerland, no problem.
Will he be taxed here?
Yes, he will be taxed.
Why will he be taxed?
Because it will be assumed that where did he provide
services?
He has provided services in India.
You have earned income.
So, in that case, you have earned in India.
Even if he receives a payment somewhere.
If you are providing services in India, then income deemed
to have arisen in India will be assumed.
Earned in India will be assumed.
And in India, he will be taxed.
No problem.
No problem, sir.
Sir, you are in high energy today.
Sir, what should I do?
Energy is needed to show in class.
If I don't remain in energy, if I remain like this, will
you enjoy in studies?
Friends, we work for 12-15 hours on a daily basis.
Even after that, we try to make you look energetic.
Sir, you are very important.
Sir, what should I do?
I have also formed a relationship with you.
Come on, sir. Next.
Have you studied? Come on.
Basis of Charge.
We were talking about the charging section.
I had said that when you check any head of income, when you
study any head of income, first of all, you will check that
under which section, income is taxable in that head.
So, there is section 15 in this.
Section 15 says that if there is any income under your
salary, then we will make that income under the head
taxable in salaries.
Come on, read.
Section 15 deals with Basis of Charge.
Now, look here.
Sir, you have said that tax is imposed on salary.
But tell me, if the salary is due,
I think it is the month of 31st, for example.
You have done till 31st.
If the salary is due on 31st, then your salary will be due
for the whole month.
For example, if a person starts working in January.
From 1st January to 31st January, that person has given his
services to the company.
When will his salary be due?
On the night of 31st?
If he has worked for a month, then his salary will be due
on the night of 31st.
Now, his salary, generally what happens, if you check in
any company, then generally, you don't get your salary on
1st.
You get your salary on 5th, 7th.
For example, in the month of January, you worked for 31
days.
You worked hard.
You are getting your salary on 5th February, after 5 days.
Now, in this case, for the income tax people, tell me, if
you have earned your salary, will it be due on 31st or 5th?
This is a question.
Your salary will be due on 31st.
If you have worked for 31 days, even if you want to quit,
you can ask your employer to give you your salary on 31st.
Your salary will be due on 31st.
You are getting your salary on 5th.
In that case, according to the income tax, what will be the
rate?
Income tax people are so smart, you will keep thinking,
they will do their work and leave.
Income tax people are saying that salary is chargeable to
tax either on due basis or receipt basis, whichever is
earlier.
Whatever is earlier, we will consider that period.
In this case, we will consider 31st January.
Look at the point.
Assume that you have not received your income yet, but it
will be taxable on 31st January.
Your salary has not yet come in your account, but your tax
is due.
Look at this.
When will you get your salary?
On 5th.
But according to the tax, when are we due on 31st?
Are you getting my point?
If you are not getting it, you will get it.
On 31st, what is the way to remember it?
For example, which one do you want?
It is like this.
There was a man, his name was Bharadwaj.
He worked for the whole year.
I will tell you the practical problem.
He worked for the whole year.
He worked hard for the whole year.
For 12 months, he worked for 12 months.
And that man after working for 12 months, did not get even
a month's salary.
When he went to his master and said,
Master, my master, give me some salary.
The master said, get lost.
In 12 months, he did not get even a month's salary.
And his package was of 20 lakhs.
His package was of 20 lakhs.
He did not get even a month's salary.
That poor man paid the tuition fees of his students, paid
the premium of LIC, paid the health insurance.
He did all these things by begging.
Because he did not get even a month's salary.
He was shocked and worried.
He was wandering.
And as soon as these 12 months were completed, the income
tax people came here.
What did they say?
Do one thing.
You have earned 20 lakhs.
Pay the tax of 4 lakhs on it.
Now that poor man was worried.
He said, Master, tell me one thing.
I have to pay the tax, but I do not get even a month's
salary.
I do not get even a month's salary.
I am paying the tuition fees of my students.
I am riding my bike.
I am adding kerosene to it.
I am riding my bike.
You are talking about tax.
I will not give tax.
Income tax people, should they take tax or not?
Those who have said that they should not take tax, slap
them on the face.
Why am I saying this?
Because in law, there is no game of emotions.
Emotions do not work in law.
They have written due or receipt.
Whichever is earlier.
So in this case, was there a receipt?
No.
Was the salary due?
Yes or no?
Salary was due.
Salary of 20 lakhs was due.
Should the income tax people pay tax on it?
The answer is yes. Will it look like an actual text? Yes!