Income Tax | Components Outside Annual Salary

You can now include non-CTC (outside annual salary) components directly in income tax computation. This ensures taxable income accurately reflects all applicable earnings, even when payouts fall outside the structured annual salary.

Tax calculations remain precise without requiring manual adjustments during payroll processing.

What’s New

• Components marked as Paid outside the annual salary can now be included in tax computation
• New setting: Include this component in Tax computations
• Enabled by default to ensure taxable payouts are captured automatically
• Flexibility to exclude components where taxation is not applicable

How It Works

• Payroll admins can configure tax applicability at the component level within the Pay Group settings
• Only components marked for inclusion will be considered in tax calculations
• A new section titled Gross earnings outside annual salary is displayed on the Income Tax page
• These amounts are now reflected in overall taxable income and TDS computation
  
  

Business Impact

• Eliminates missed taxable earnings
• Reduces manual tax adjustments
• Improves TDS accuracy
• Strengthens statutory compliance

This update ensures that all relevant earnings—whether inside or outside the annual salary structure—are correctly factored into income tax calculations.

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