Employer and Employee relationship.

Employer and Employee relationship.

1.If an employee receives salary from an employer, then the income is taxable under the head Income from Salaries .

Thus, there should be  proper employer and employee relationship between payer and payee for income to be taxed under Income from Salaries.

  Example:-

  Employee  on payroll in a Company

2.I f there is no such relation then income is taxable under Income from other sources or Profit and gains of business  and profession(PGBP)

    Example:-Person working on contract in a Company are taxed under PGBP