## Basis of Charge — Section 15
Salary is taxed on **due basis OR receipt basis, whichever is *earlier***. This single rule resolves most timing questions — once salary is taxed in a year (whether because it became due or because it was received), it can never be taxed a second time.
### The five timing situations
| Item | When taxed | Taxed again later? | Relief u/s 89? |
|---|---|---|---|
| Advance Salary (salary of a future period paid early) | Year of receipt (irrespective of when it becomes due) | No — not taxed again when it becomes due | Yes |
| Arrears of Salary | On due basis; but if it could not be taxed on due basis (e.g. retrospective pay-revision), then in year of payment | No — if already taxed on due basis, not taxed again when paid | Yes |
| **Advance against Salary** (a loan-like advance adjusted against future salary) | Not taxable on receipt | Taxed normally as salary becomes due | — |
| Loan from Employer (repayable in instalments) | Not taxable on receipt | It is a loan, not salary | — |
### Key distinction to lock in
- Advance salary = salary of future months paid now → taxable now.
- Advance against salary / loan from employer = money to be recovered from future salary or repaid → NOT taxable on receipt.
The difference is whether the amount represents salary already earned/attributed (taxable) or is merely money lent against future earnings (not taxable until it becomes salary due).
### Relief under Section 89
Wherever salary is bunched into one year (advance salary or arrears), the higher slab impact is cushioned by relief u/s 89.