Salary in common parlance means any amount paid by an employer to his employees in lieu of services rendered by them. However income tax act 1961 defines the term “ salary” u/s 17(1) to include the following monetary as well as non monetary payments :- a) Wages. b) Annuity or pension. c) Any Gratuity.

Is perquisites part of salary?

Perquisites are included in salary income only if they are received by an employee from his employer (maybe former, present or prospective). Perquisites, received from a person other than employer, are taxable under the head “Profits and gains of business or profession” or “Income from other sources”.

Do you have to pay tax on honorarium?

Let us clear one by one with the statutory act applicable to it. As per the income tax Act, there is no word define as “honorarium”. But it is sure that honorarium should be considered as Income and person receiving it should pay tax on it if applicable. TDS is a liability on NGO to deduct from the payment to staff if limit crosses.

Which is part of salary for income tax purpose in India?

Honorarium is the part of salary for income tax purpose in India. As held in Sri Vardaraja swami Transports P Ltd V/s RPF Commissioner AIR 1966 Mad 466 and AAR (New Delhi) No. 597 of 2002 in case of Max Muller Bhavan, (2004) 268 ITR 31, 32, 35 – 36 (AAR)

How are salaries of Supreme Court judges taxable in India?

Article 125 and 221 of the constitution deal with salary of Supreme Court and High court judges respectively. These articles state that judges of a Supreme Court and high court receives salary. As it is clearly stated in article that what judges are receiving are salary we have to tax these incomes under the head “Income from salary”.

How much TDS can you deduct on honorarium?

Thus TDS is to be deducted on honorarium if treated as regular salary (sec 192), as per basic exemption limit stated in the Income Tax Act of relevant Assessment Years. If honorarium treated as consultancy (sec 194J), then deduct TDS at 10%, if basic limit crossed.