Navigating Salary and Commission Payments: How to Handle Income Tax for Sales Executives?

I am working in a newly formed company. My query is that we are planning to pay staff salaries through the bank. Our Sales Executives are earning a Salary + Commission for the sales. The salary is paid between the 5th and 10th of every month, and the commission is paid by the end of the month.

So, if we are paying both through the bank, should the staff have to pay Income Tax? Their basic salary is Rs. 9000.00, and the commission will be nearly Rs. 26000.00 per month. Please advise whether we should go through the bank or if there is any other way to pay the commission to avoid income tax.

Thanks and regards,
Nayeem Manzoor

Commission and Income Tax

Commission is a part of income and falls under the purview of income tax.

As discussed, you need to pay income tax on both salary and commission, as it is a part of your salary payable to your sales team. You need to pay tax on the same even if you don't pay through the bank.

Income tax should be paid by each eligible employee. You cannot avoid it, and the employer is liable to collect all investment proof and earning details. Based on that, the employer will deduct TDS. This will be a serious issue, and the employer may be penalized if found guilty. Hope you find this appropriate.