Got a pay cut? You may still be taxed on your original CTC

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  • Last Updated on 28 October, 2020

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May 21, 2020

Naveen Wadhwa, Deputy General Manager at Taxmann.com, said:

 

 

“As per income tax laws, salary is taxable on the basis of due or received, whichever is earlier. Therefore, any salary amount due to you will be taxable in your hand, even if not received. If the CTC of an employee undergoes any revision (cut or hike), then such revision should be reflected in the individual’s salary slip as well i.e. the components of the salary such as basic, HRA, special allowance etc. should be revised in the similar fashion. If the components are not revised, then the taxability of individual’s salary will be computed on the basis of the amount shown in the salary slip against those components, irrespective of the actual payment received by him. The income tax department will consider payslips as proof to determine the amount due and/or received against the components in your salary slips and thereby, the tax liability on it.”

 

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