Sunday, 28 August 2016

Income from Salaries: Tax Implications

“Salary” is any remuneration paid by an employer to the employee in lieu of the service provided by him/her. Salary may include monetary and non monetary benefits which are taxable as per the Income Tax Act. Any payment made by the employer to employee in lieu of service is chargeable to tax. Salary has a much wider meaning for taxation purpose than it is normally understood. 
Salary includes;
Fees, Commission, Perquisites or Profits in Lieu of Salary
Advance Salary
Leave Encashment
Fund transferred from Unrecognized Provident Fund to Recognized Provident Fund
Compensation due to variation in Service Contract
Contribution to Recognized Provident Fund in excess of prescribed limit by the respective employer.
Contribution to Notified Pension Scheme by the Central Government to an account of an employee.
Annuity or Pension Fund

Condition need to satisfied for the “Income” to qualify as “Salary”

Employer-Employee Relationship: Any income can only be taxed under the head “Salaries” if there is employee-employer connection, between the payer and the payee. 

Part-time or Full time Employment: Once the employer-employee relationship is established it does not matter whether a person is employed on part time or full time basis. The income will be charged under the head “Salaries. 

Forgoing of Salary: Even if an employee forgoes his/her salary post accrual, it does absolve the employee from his/her liability to Income tax. 

Surrender of Salary: If an employee choses to surrender his/her salary to the Central Government, then the salary so surrendered will be exempt from computation Income Tax.

Basis of Charge (Section 15)

Salary is chargeable to tax either on “due” or “accrual” basis subject to whichever occurs earlier.
Salary paid in advanced is chargeable to tax, in the year of payment and cannot be taxed again when it is actually due.
Salary paid in arrears is already taxed on due basis and cannot be taxed again when it is being paid. However, in some cases might be charged on receipt basis.
Salary or Arrears allowed to Employee from his/her present of former employer/s in the previous year but not charged to tax, is liable to tax in the current year.

Place of Accrual of Salary (Section 9 (1) (ii))

Salary is deemed to accrue at the place where the service is rendered and not the place where it is received, thus is taxable accordingly.

Loan against Salary

Loan availed by an employee from his/her employer cannot be charged to tax under the head “Salaries”.

Leave Encashment

Leave encashed while in service is chargeable to tax. However, Leaves encashed at the time of superannuation is exempted from tax.

Salary from United Nation Organisation (UN)

Salary received from service rendered to United Nations is exempted from Tax under United Nations (Privileges and Immunities Act,1947). 

Types of Allowances and Tax Implications

Fully Taxable
Partly Taxable
Fully Exempt
1.)Basic Allowance
2.)Dearness Allowance
3.)City Compensatory Allowance
4.) Fixed Medical Allowance
5.) Overtime Allowance
6.) Interim Allowance
7.) Servant Allowance
8.) Project Allowance
9.) Cash Allowance
10.) Non Practicing Allowance
11.) Food Allowance
12.) Entertainment Allowance (exempted upto Rs 5,000 for Govt employees)
1.) Conveyance Allowances (exempted upto Rs 1,600 per month)
2.) House Rent Allowances (least of following: Actual HRA Received, Rent paid less 10% of Basic plus DA (If provided), 40% of Salary (50% for Delhi, Kolkata, Chennai and Mumbai)
3.) Special Allowances
4.) Children Education Allowance (Rs 100 per month for maximum of 2 children, if children are staying in hostel for studies additional Rs 300 per month is allowed)
1.) Allowances Granted to Employees Outside India
2.) Sumptuary Allowances granted to High/Supreme Court Judges
3.) Compensatory Allowances received by Judges

Following allowances are exempted subject to actual expenses incurred:
Allowances paid to meet the cost of business related tours and travels.
Allowance granted to meet the cost of maintenance of uniform required when on official duty.
Research or Training Allowance granted in Academic Institution.


Taxable Perquisites:
Value of Rent free accommodation provided to employee.
Concessional value of rent with respect to accommodation provided by the employer.
Amount paid by employer towards any expenses which would have normally accrued and borne by the employer.
Amount paid towards Assurance Plan by employer providing life cover to Employee.
Value of any other fringe benefits, sweat equities, deposit in excess of prescribed limits to Superannuation funds. 

Non Taxable Perquisites:
Telephone expenses
Goods provided at concessional rates
Refreshment provided to Employees
Medical Expenses upto prescribed limit
Subsidized Food provided to Employees
Premium paid towards Accidental Insurance Plan
Leave Travel concession extended to Employees

Professional Tax

Professional Tax on employment levied by respective State is allowed as deduction while calculating Taxable Income.

Wednesday, 24 August 2016

Asus Zenfone 3: The Latest Launch

Asus has finally come up with their latest Zenfone series. The Zenfone 3 was launched recently in India and is expected to compete with the likes of One Plus 3 and Xiaomi Mi5. The device is available exclusively on Flipkart portal and Asus has priced the device keeping its competitors in mind. However, one does feel that Asus could have been a bit more aggressive with the pricing as the Zenfone 3 is powered by a midrange chipset. The base variant is priced at Rs 21,999/- while the top end variant is priced at Rs 27,999/-. The base variant sports 5.2 inch display with 3GB Ram, 32 GB onboard storage and 2650 mah battery while the premium variant comes with 5.5 inch screen, 4GB Ram, 64 GB internal storage and 3000 mah battery.
Asus also claims to have included additional features which would enhance the end user experience. Previous generation Zenfones belonged to the budget and midrange price category but Asus seems to be vying for the premium price segment with this launch.

Build and Design: Asus has really done a great job with the build and design of the Zenfone 3. The device uses a combination of glass and metal which lends premium feel to the device while the ergonomics make it comfortable to use. The phone is comparatively light considering the size although single hand use may not be possible. The frames of the device uses metal while the front and rear body is made of 2.5D curved gorilla glass which makes it pretty stylish.
It also has the oleophobic coating makes it a smudge resistant device. The 3 capacitive keys are placed at the bottom but unfortunately they are not backlit. The fingerprint scanner is at the back just below the camera lens.
The display on device is crisp with true color reproduction and decent viewing angles.

Battery Life: The phone comes with 2650/3000 mah battery which may be adequate for normal users but heavy users may require to charge more than once. The chipset used in this device is built using the 14mm nano process which is considered to be efficient in power management. One would have expected a larger battery on this device. However, the device does support fast charging and it would help the heavy users.

Features: Zenfone 3 comes with all the basic sensors along with IR blaster and Fingerprint scanner. The Snapdragon chipset used on this device is built using 14 nanometer (nm) technology which suggests it will be power efficient and won’t face any major heating issue. It also has the Sonic Master and Hi- Res certification which implies that sound output via the earphones will be great. Even the speakers are claimed to be using the latest technology for enhanced audio experience.
Overall, the Zenfone 3 is feature enriched device using advanced technology for great end user experience.

Hardware Specifications: Zenfone 3 is powered by the new Snapdragon 625 chipset and Octa Core Processor clocked at 2.0 ghz with 3/4 GB Ram. The Adreno 506 GPU is decent for gaming but will tend to struggle with graphic intensive games. The chipset used on this device is not very powerful as seen on other flagships, power users won’t be too impressed with device if overall performance is considered.
3/4GB Ram is sufficient to provide lag free performance on this device while 32/64 GB inbuilt storage will suffice most of the users. It also supports external storage in case one requires additional storage.

Camera: One of the strongest areas for the Zenfone 3 is the camera. It is one of the best in this price range and performs reasonably well even in artificial and low lighting conditions. The dual tone LED flash, f/2.0 aperture Sony sensor along with Optical Image Stablization (OIS) does capture decent images with good amount detailing. The front camera also does a decent job.
The rear camera also supports 4K video recording and thanks to Electronic Image Stabilisation (EIS) the video recording is also decent with acceptable dynamic range.

Software: It runs on Android Marshmallow with familiar Zen UI 3.0 skin running on top. The Zen UI does offer a lot of features although it does come with loads of bloatwares. One can manually remove the bloatwares although it may take some time to get accustomed to the interface.

Service: Asus does have a network to provide after sales support but I believe they have scope for improvement in this department. Asus should look to have their exclusive service centres in metropolitan as well as other big cities.  

Verdict: Asus has tried to enter the premium segment with this launch but in my opinion with a mindrange chipset they would struggle against the likes of One Plus 3 and Xiaomi Mi5. Zenfone 3 does have a very good camera backed by advanced features but somehow it just falls short of being the best device in this price range. Asus should consider dropping the price by atleast 4k-6k which I feel would be the ideal price range for this device.
Individuals looking for a good camera phone in this price range may have a look at this device. Even users looking for stylish and feature packed device should consider Zenfone 3.

Key Specifications are given below:-

Octa Core A53 Processor clocked @ 2 ghz), Snapdragon 625 chipset
32/64 GB (Hybrid SD Card Support upto 2TB)
Operating System
Android Marshmallow 6.0
Rear Camera
16 mp/4K Video Recording
Front Camera
8 mp /HD Video Recording
3/4 GB
Adreno 506
2650/3000 Mah Li ion
5.2/5.5 inch (Corning Glass 3)
Type Sim
Dual Sim (Micro & Hybrid Nano)/GSM 4G Support
Touchscreen Type
146.9 x 74x 7.7 mm/144
152.6x 77.4x7.7 mm/155