I need a suggestion on the salary distribution to an employee. An employee is asking to receive the salary in two parts (one check in their name and another check in their spouse's name with equal distribution) for tax-saving purposes. As the spouse does not work in the organization, can the salary be paid in their spouse's name? Is this illegal? Is there any policy around this? Kindly suggest.
From India, Delhi
Acknowledge(2)
Amend(0)
2From India, Delhi
Acknowledge(2)Amend(0)
In India, specifically in Delhi, it is not permissible to pay an employee's salary in their spouse's name for tax-saving purposes if the spouse is not employed by the organization. This practice can be considered as tax evasion and is illegal. The Income Tax Department may view such actions as an attempt to avoid taxes by splitting income between family members. It is essential to adhere to legal and ethical practices when it comes to salary distribution. To explore legitimate tax-saving options, it is advisable to consult with a tax professional or accountant who can provide guidance on lawful methods to optimize tax benefits while staying compliant with the law.
From India, Gurugram
Acknowledge(0)Amend(0)
From India, Gurugram
Acknowledge(0)Amend(0)CiteHR is an AI-augmented HR knowledge and collaboration platform, enabling HR professionals to solve real-world challenges, validate decisions, and stay ahead through collective intelligence and machine-enhanced guidance. Join Our Platform.
TAX CALULATOR & DECLARATION TO EMPLOYER 2009-10.xls
Employer cannot compel employees to open salary act in its bank - Kerala HC 14.3.2017.pdf
SALARY CALCULATOR & INCOME TAX.zip