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2nd May 2016

Supreme Court observed that Section 15, Income Tax Act, 1961 is divided in three parts. Sub-clause (a) refers to salary that is "due" from an employer or a former employer, whether paid or not. Under this sub-clause, salary is taxable upon accrual-it matters not whether payment is actually made or not. On the other hand, under Sub-clause (b), any salary that is paid or allowed to an employee by or on behalf of an employer or former employer though not due, or before it becomes due, becomes taxable. Under this sub-clause, it matters not whether the salary is at all due. Payment made or allowance given to the employee by or on behalf of an employer or former employer is sufficient to bring such payment or allowance to tax under the said sub-clause. Under Sub-clause (c) any arrears of salary paid or allowed to an employee by or on behalf of an employer or previous employer if not earlier charged to income tax in any previous year is also brought to tax.

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