India – High Court Allows Hypothetical Tax as Deduction from Income

India – High Court Allows Hypothetical Tax...

KPMG in India reports on the Bombay High Court’s decision confirming the permissibility of a reduction (withholding or deduction) in respect of the hypothetical tax from a taxpayer’s salary. The High Court’s ruling has re-affirmed the position that only the incremental tax liability actually borne by the employer on behalf of an employee ought to be taxed as salary. The hypothetical tax that is withheld or deducted from the employee’s salary represents the tax costs to be borne by the employee and hence cannot be added to the income of the employee.

Related content

Download PDF of Flash International Executive Alert:

India: High Court Allows Hypothetical Tax as Deduction from Income (PDF)

Connect with us

 

Request for proposal

 

Submit

KPMG's new digital platform

KPMG's new digital platform