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Costing and Taxation · Class 11 Commerce

Ch 7Income under the Head "Salaries" — Class 11 Costing and Taxation, concept-first.

Income under the head "Salaries" is charged to tax under Section 15 of the Income Tax Act, 1961, and its precise composition is fixed by the definition of "salary" under Section 17(1).

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Basis of Charge and Taxable Allowances under the Head Salaries

Salary is charged to tax under Section 15 on whichever is earlier of the due basis or the receipt basis, so that no instalment of salary is ever taxed twice or escapes tax altogether; arrears not already taxed in an earl…

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Chapter contents

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7.A

Basis of Charge and Taxable Allowances

Income under the head "Salaries" is charged to tax under Section 15 of the Income Tax Act, 1961, and its precise composition is fixed by the definition of "salary" under Section 17(1).

7.B

Perquisites and Professional Tax Deduction

Section 17(2) of the Income Tax Act, 1961 lays down an inclusive list of what counts as a perquisite; this section works through the two categories of perquisite this unit's syllabus specifically name…

Terms Introduced in the Chapter

This section collects, in one place, every term, exemption and valuation rule introduced in this chapter, for quick reference and revision.

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  1. Q14State any four allowances covered in this chapter that are fully taxable, with no exemption available at all, under the head Salaries.Free
  2. Q15Mrs. G is a Central Government employee posted in Bhubaneswar. During the previous year 2025-26 she received: Basic Salary ₹35,000 per month…Preview
+Show 13 questions13 questions
  1. Q1Mr. Roy's salary for March 2026 became due to him on 31st March 2026, but his employer actually paid it to him only on 10th April 2026. In w…Free
  2. Q2Mr. X is employed in Kolkata. During the previous year 2025-26, he received Basic Salary of ₹30,000 per month and Dearness Allowance of ₹10,…Free
  3. Q3Ms. Y is employed in Bhubaneswar. During the previous year 2025-26, she received Basic Salary of ₹20,000 per month (her Dearness Allowance d…Free
  4. Q4Mr. Z has two children and, during the previous year 2025-26, received Children Education Allowance of ₹300 per month per child and Transpor…Preview
  5. Q5Distinguish between Dearness Allowance, City Compensatory Allowance and Medical Allowance in terms of their tax treatment under the head Sal…Preview
  6. Q6Mr. A is employed with a private company in Kolkata. During the previous year 2025-26 he received: Basic Salary ₹40,000 per month; Dearness…Preview
  7. Q7What is a 'Perquisite' under Section 17(2) of the Income Tax Act, 1961? Are all benefits an employee receives from an employer necessarily t…Preview
  8. Q8Mr. B is a State Government employee provided with rent-free accommodation. The licence fee for this accommodation, as determined by the Sta…Preview
  9. Q9Mr. C is employed with a private company and is provided unfurnished rent-free accommodation owned by the company. His 'salary' for this pur…Preview
  10. Q10Continuing from part (a) of the previous question (Mr. C, unfurnished value ₹90,000), suppose the company has also provided furniture in the…Preview
  11. Q11Mr. D's employer provides free education, in a school maintained by the employer, to Mr. D's two children — the employer's cost of providing…Preview
  12. Q12(a) Mr. E paid ₹2,400 as professional tax during the year, out of his own salary, directly to the State Government. State the deduction he c…Preview
  13. Q13Mr. F is employed with a private company in Kolkata (a city with a population exceeding 40 lakh as per the 2011 census). During the previous…Preview