Outside Salary Components in Tax & Pay Register (India)

Accurate tax computation for components paid outside the annual salary structure.

Salary components paid outside an employee’s annual salary—such as specific allowances, reimbursements, or one-time payouts—can now be included in income tax computation and reporting. This ensures correct TDS deductions, compliant filings, and consistent reflection across payroll, reports, and statutory documents.

Certain components are configured as Paid outside the annual salary and processed through payroll separately from the CTC structure. Previously, these components were not automatically included in income tax calculations, which could result in under-deduction and compliance risks.

With this enhancement, payroll admins can explicitly control whether such components are included in tax computation. Once enabled, these components flow through:

• Income tax calculations
• Pay register
• Payslips and tax addendums
• Statutory reports and filings

This ensures alignment between actual earnings and tax reporting.

Income Tax Page Experience

Only components marked Include this component in Tax computations will:

• Appear in the tax calculation.
• Be shown under a new section on the Income Tax page:

Gross earnings outside annual salary

This ensures transparency in how taxable income is derived.

Where the Change Reflects

Once included in tax computation, these components are reflected across the system.

Employee-Facing & Documents

Payroll Processing, Filing & Downloads

Business Impact

• Ensures accurate TDS deduction.
• Eliminates manual tax adjustments for ad hoc payouts.
• Improves statutory compliance.
• Aligns payroll processing with tax reporting.
• Provides complete visibility to employees and auditors.

This update ensures that all taxable earnings—whether part of annual salary or paid outside it—are accurately captured across payroll, tax computation, and statutory reporting in India.

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