Hi..Srikanth Sir ..Kudos to your work...It's really helpful in answering the queries raised by the individuals.
I have One doubt my employer is paying the NPS contribution(employer contribution) and the employer is adding the Employers NPS contribution to gross salary.and also showing the same amount under the 80ccd clause. Moreover, in 26AS, he is not adding the employer's contribution to gross salary but in form 16(b) he is adding it to gross salary. Is it right? There is any clause to add employer contribution to Gross salary...kindly guide ..
Eg: gross 450000
employers nps: 32000
in 26AS income paid/credited shown as 450000 but
in from 16(b) gross salary shown as 482000
1 Answers
Hi,
This is a tricky question!
Generally , the amount received post subtracting gratuity and the employee provident fund (EPF) or NPS contribution from Cost to Company (CTC) is called as Gross Salary. In other words, Gross Salary is the amount paid before deduction of taxes or deductions and is inclusive of bonuses, over-time pay, holiday pay etc.
However, the employer may count his PF contribution or NPS Contribution to you (employee) as your gross salary.
If you are talking about Gross salary for taxation purposes, then it is not included as it is specifically exempt. However when CTC (Cost to the Company) is calculated then Employer Contribution to PF/NPS etc. are added as they are indeed cost of the company.
You may kindly go through this link..
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