Sec17(3) of Income Tax act :Salary as per section 17(1)

Any payment received or due additionally to your salary or wages from your employer is termed profit in lieu of salary.

Section 17 (3) of tax act defines profit in lieu of salary as follows;

(i) the quantity of any compensation thanks to or received by an assessee from his employer or former employer at or in reference to the termination of his employment or the modification of the terms and conditions relating thereto;

(ii) any payment (other than any payment mentioned in clause (10) [, clause (10A)] [, clause (10B)], clause (11), [clause (12) [, clause (13)] or clause (13A)] of section 10), thanks to or received by an assessee from an employer or a former employer or from a provident or other fund, to the extent to which it doesn’t contains contributions by the assessee or interest on such contributions or any sum received under a Keyman policy including the sum allocated by way of bonus on such policy.

According to the above section following incomes are treated as profit in lieu of salary and taxable in your hand as ‘SALARY’.

• Compensation accrued or received, thanks to modification of the utilization terms.

•Any payment received from an unrecognized provident or pension fund .

Under this the employer and employee contribution, interest on there contribution are going to be taxable.

•If the corporate has taken any key man policy in your name and you’ve got received any money from the insurance firm thanks to this policy then that quantity are going to be treated as your salary and tax has got to be paid thereon.

• Any payment received by the worker from the employer or former employer before joining of employment or sum received after the termination of employment.

• Any other amount received from employer are going to be treated as profit in lieu of salary unless and until that specific amount is specifically exempted under any section

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