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Following
incomes included in Taxable Salary
for
the assessment year 2019-20
01. Basic Salary ------
02. Advance Salary ------
03. Dearness Pay ------
04. Dearness Allowance ------
05. Bonus -----
06. Commission ------
07. Commission on Sales ------
08. Allowances (Taxable) ------
09. Value of Taxable
Perquisites (Taxable) ----
10. Profit in lieu of
salary ------
11. Contribution of
Employer in RPF in excess of 12% of Salary ------
12. Interest on RPF
Balance in excess of 9.5% ------
13. Amt. received in
respect of leave encashment [during service] ------
On retirement
of Employee:
14. Unrecognised
Provident Fund:
(a) Share of Employer ------
(b) Interest on share of employer ------
15. Taxable part of
Gratuity ------
16. Taxable part of
encashment of earned leave ------
17. If retrenched taxable
part of retrenchment compensation ------
18. In case of voluntary
retirement taxable part of Voluntary
Retirement
Compensation ------
19. Pension:
(a) Taxable part of commuted pension ------
(b) Pension from date of retirement till the
end of previous
Year
(monthly pension) ------
Gross
Salary Income ------
Less:
1. Standard Deduction - Max Rs 40,000 ------
2. Ent. Allow. Max Rs 5000 or 1/5 of Basic Pay or -------
Actual Amt (for Govt Emp.)
3. Professional Tax ------
1. Standard Deduction - Max Rs 40,000 ------
2. Ent. Allow. Max Rs 5000 or 1/5 of Basic Pay or -------
Actual Amt (for Govt Emp.)
3. Professional Tax ------
Taxable
Salary ------
-----------------------------------------------------------------------------------------------
Solution:
Basic salary (15000*12) =Rs 180,000
taxable contribution in RPF by employer (15%-12%) of salary =Rs (180,000*3%)
=Rs 5400
Exempted amt of Interest in fund balance (9.5% of Rs 100,000) =Rs 9500
Taxable amount of Interest in fund balance (12000-9500) =Rs 2500
Ans.
Total taxable amt of annual accretion to be included in his
income under the head salaries (5400+2500) =Rs 7900
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Q1. Mr X is employed in a company at Rs 15000 p.m. He is a member of Recognised Provident Fund to which he and his employer contributes 15% of his salary. During the year he was given credit of Rs 12000 as interest on the provident fund balance of Rs 100,000. Calculate the taxable amount of annual accretion to be included in his income under the head salaries.
Ans=Rs 7900
Solution:
Basic salary (15000*12) =Rs 180,000
taxable contribution in RPF by employer (15%-12%) of salary =Rs (180,000*3%)
=Rs 5400
Exempted amt of Interest in fund balance (9.5% of Rs 100,000) =Rs 9500
Taxable amount of Interest in fund balance (12000-9500) =Rs 2500
Ans.
Total taxable amt of annual accretion to be included in his
income under the head salaries (5400+2500) =Rs 7900
==============================================
Q2. Find out the amount of the
house rent allowance which shall be included in the income under the head
salaries in each of the following cases:
(a) Basic pay Rs 20,000 p.m., Dearness pay@10% of basic pay, commission based on fixed percentage of turnover Rs 120,000 for the year, House rent allowance Rs 5,000 p.m., Actual rent paid by the assessee Rs 4,000 p.m. House situated in Agra.
Ans=(a) 50400 (b) 12000 (c) Nil
Solution:
(a) Basic pay Rs 20,000 p.m., Dearness pay@10% of basic pay, commission based on fixed percentage of turnover Rs 120,000 for the year, House rent allowance Rs 5,000 p.m., Actual rent paid by the assessee Rs 4,000 p.m. House situated in Agra.
Ans=(a) 50400 (b) 12000 (c) Nil
Solution:
Basic
pay =
240,000 p.a.
Dearness pay = 24,000 p.a.
Commission on
turnover = 120,000 p.a.
Salary for the
computation of H.R.A. = 384,000 p.a.
(Basic Pay+Dearness Pay+Commission)
Least of the following amount will be
exempted:
1.
House Rent Allowance received =
60,000
2.
Excess of Rent paid over 10% of salary = 9,600
(Rent paid-10% of Salary)
(48,000-38,400)
(Rent paid-10% of Salary)
(48,000-38,400)
3.
As the accommodation Is not situated in
specified cities, 40% of salary (40% of 384,000) = 153,600
Exempted amount of H.R.A. = 9,600
Taxable amount of H.R.A. = 50,400
[Actual amt of H.R.A.-Exempted amt]
[60,000-9600]
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(b) Basic pay Rs 30,000 p.m., Dearness allowance@10% of basic pay, House rent allowance Rs 5,000 p.m., Actual rent paid by the assessee Rs 7,000 p.m. House situated in Mathura.
Solution:
Exempted amount of H.R.A. = 9,600
Taxable amount of H.R.A. = 50,400
[Actual amt of H.R.A.-Exempted amt]
[60,000-9600]
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(b) Basic pay Rs 30,000 p.m., Dearness allowance@10% of basic pay, House rent allowance Rs 5,000 p.m., Actual rent paid by the assessee Rs 7,000 p.m. House situated in Mathura.
Solution:
Basic
pay = 360,000 p.a.
Salary for the computation
of H.R.A. = 360,000 p.a.
Least of the following amount will be exempted:
1. House Rent Allowance received = 60,000
2. Excess of Rent paid over 10% of salary = 48,000
(Rent paid-10% of Salary)
(84,000-36,000)
3. As the accommodation Is not situated in specified cities, 40% of salary (40% of 360,000) = 144,000
Exempted amount of H.R.A. = 48,000
Taxable amount of H.R.A. = 12,000
[Actual amt of H.R.A.-Exempted amt]
[60,000-48,000]
Note: चूँकि Dearness allowance under the terms नहीं हैं इसलिए वो H.R.A के calculation के लिए salary में नहीं जोड़ा जायेगा |
1. House Rent Allowance received = 60,000
2. Excess of Rent paid over 10% of salary = 48,000
(Rent paid-10% of Salary)
(84,000-36,000)
3. As the accommodation Is not situated in specified cities, 40% of salary (40% of 360,000) = 144,000
Exempted amount of H.R.A. = 48,000
Taxable amount of H.R.A. = 12,000
[Actual amt of H.R.A.-Exempted amt]
[60,000-48,000]
Note: चूँकि Dearness allowance under the terms नहीं हैं इसलिए वो H.R.A के calculation के लिए salary में नहीं जोड़ा जायेगा |
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(c) Basic pay Rs 20,0000 p.m., Dearness allowance@10% of basic pay, House rent allowance Rs 2,000 p.m., Actual rent paid by the assessee Rs 5,000 p.m.House situated in Delhi.
Solution:
(c) Basic pay Rs 20,0000 p.m., Dearness allowance@10% of basic pay, House rent allowance Rs 2,000 p.m., Actual rent paid by the assessee Rs 5,000 p.m.House situated in Delhi.
Solution:
Basic
pay = 240,000 p.a.
Salary for the computation
of H.R.A. = 240,000 p.a.
Least of the following amount will be exempted:
1. House Rent Allowance received
= 24,000
2. Excess of Rent paid over 10% of salary = 36,000
(Rent paid-10% of Salary)
(60,000-24,000)
3. As the accommodation Is situated in specified
cities, 50% of salary (50% of 240,000) =
120,000
Exempted amount
of H.R.A. = 24,000
Taxable amount
of H.R.A. =
NIL
[Actual amt of H.R.A.-Exempted amt]
[24,000-24,000]
Note: चूँकि Dearness allowance under the terms नहीं हैं इसलिए वो H.R.A के calculation के लिए salary में नहीं जोड़ा जायेगा |
Note: चूँकि Dearness allowance under the terms नहीं हैं इसलिए वो H.R.A के calculation के लिए salary में नहीं जोड़ा जायेगा |
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Q3. Shri Ram who resides in Allahabad got the following emoluments during the previous year ended on March 31, 2019:
From X Ltd. : 6 months basic pay @ Rs 3000 p.m., dearness pay forming part of basic pay @ Rs 250 p.m., house rent allowance @ Rs 1000 p.m.
From Y Ltd. : 4 month basic pay @ Rs 4000 p.m., dearness allowance @ 25% of basic pay, commission on sale@5% (on sales effected during four months Rs 100,000), house rent allowance @ 2500 p.m.
From Z ltd. : 2 months salary @ Rs 8000 p.m., dearness allowance Rs 1000 p.m., house rent allowance Rs 3000 p.m. During this period , he lived in his own house.
He paid Rs 3000 p.m. as house rent throughout the previous year excepts for two months when he lived in his own house.
Determine the amount of house rent allowance taxable for the Assessment Year 2019-20 .
Ans=Rs 7600
Solution:
Company Name X Ltd[6M] Y Ltd[4M] Z Ltd[2M]
Basic Salary 18,000 16,000 16,000
D.Pay/Allowance 1,500 N/A N/A
Comm. on sales N/A 5,000 N/A
H.R.A received 6,000 10,000 6,000
Rent paid 18,000 12,000 N/A
Salary for the calculation of H.R.A.
19,500 21,000 16,000
1. H.R.A. Received 6,000 10,000 6,000
2. Excess of Rent paid over 10% of salary
16,050 9,900 Nil
3. 40% of Salary 7,800 8,400 6,400
Exempted Amount 6,000 8,400 Nil
Taxable Amount Nil 1,600 6,000
[H.R.A.-Exempted Amount]
Ans.
Total taxable amount of H.R.A. [1600+6000] = Rs 7600
Note.:
1. Since Dearness allowance from Y and Z Ltd is not under the terms of employment, therefore it will not be added in salary of computation of H.R.A.
2. He lived in his own house for last 2 months, when he was working with Z Ltd, so Rent paid will not be applied for calculation of Z Ltd.
3. N/A stands for Not Applicable.
==================================
Q4. Mr. Mohan resides in Kanpur. He gets a basic salary of Rs 200,000 and Dearness pay Rs 200,000 and House Rent Allowance Rs 150,000 p.a. He pays a rent of Rs 180,000 p.a. Determine the amount of H.R.A. chargeable to tax.
Ans=Rs 10,000
Solution:
Salary for the computation of H.R.A. = 400,000
[200,000+200,000]
From X Ltd. : 6 months basic pay @ Rs 3000 p.m., dearness pay forming part of basic pay @ Rs 250 p.m., house rent allowance @ Rs 1000 p.m.
From Y Ltd. : 4 month basic pay @ Rs 4000 p.m., dearness allowance @ 25% of basic pay, commission on sale@5% (on sales effected during four months Rs 100,000), house rent allowance @ 2500 p.m.
From Z ltd. : 2 months salary @ Rs 8000 p.m., dearness allowance Rs 1000 p.m., house rent allowance Rs 3000 p.m. During this period , he lived in his own house.
He paid Rs 3000 p.m. as house rent throughout the previous year excepts for two months when he lived in his own house.
Determine the amount of house rent allowance taxable for the Assessment Year 2019-20 .
Ans=Rs 7600
Solution:
Company Name X Ltd[6M] Y Ltd[4M] Z Ltd[2M]
Basic Salary 18,000 16,000 16,000
D.Pay/Allowance 1,500 N/A N/A
Comm. on sales N/A 5,000 N/A
H.R.A received 6,000 10,000 6,000
Rent paid 18,000 12,000 N/A
Salary for the calculation of H.R.A.
19,500 21,000 16,000
1. H.R.A. Received 6,000 10,000 6,000
2. Excess of Rent paid over 10% of salary
16,050 9,900 Nil
3. 40% of Salary 7,800 8,400 6,400
Exempted Amount 6,000 8,400 Nil
Taxable Amount Nil 1,600 6,000
[H.R.A.-Exempted Amount]
Ans.
Total taxable amount of H.R.A. [1600+6000] = Rs 7600
Note.:
1. Since Dearness allowance from Y and Z Ltd is not under the terms of employment, therefore it will not be added in salary of computation of H.R.A.
2. He lived in his own house for last 2 months, when he was working with Z Ltd, so Rent paid will not be applied for calculation of Z Ltd.
3. N/A stands for Not Applicable.
==================================
Ans=Rs 10,000
Solution:
Salary for the computation of H.R.A. = 400,000
[200,000+200,000]
Least of the following amount will be exempted:
1. House Rent Allowance received = 150,000
2. Excess of Rent paid over 10% of salary = 140,000
(Rent paid-10% of Salary)
(180,000-40,000)
3. As the accommodation Is not situated in specified cities, 40% of salary (40% of 400,000) = 160,000
Exempted amount of H.R.A. = 150,000
Taxable amount of H.R.A. = 10,000
[Actual amt of H.R.A.-Exempted amt]
[160,000-150,000]
========================================
Q5. From the following information find out the income from salary of Suresh:
(1). Gross Annual Salary Rs 300,000.
(2). Medical expenditure directly paid by the employer to private practitioner Rs 25,000.
(3). Medical expenditure directly paid by the employer to hospital approved by the Chief Commissioner of Income Tax. Rs 50,000
(4). Reimbursement of medical expenses incurred by the employee in a hospital approved by Chief Commissioner. Rs 20,000
(5). Expenditure on travelling abroad (including that of attendant) borne by the employer Rs 150,000.
(6). Expenditure incurred on stay and treatment abroad borne by the employer Rs 250,000
(7). Out of (6) amount permitted by the Reserve Bank of India Rs 100,000.
Ans=Rs 585,000
Solution:
1. Salary Rs 300,000
2. Medical expenditure directly paid by the employer to private practitioner Rs 25,000
3. Medical expenditure directly paid by the employer to hospital approved by the Chief Commissioner of Income Tax Exempt
4. Medical expenditure directly paid by the employer to hospital approved by the Chief Commissioner of Income Tax. Exempt
5. Expenditure on travelling abroad Rs 150,000
Not exempt as is G.T.Income exceeds Rs 200,000
[Rs 300,000+25,000+150,000]
6. Expenditure on stay and treatment abroad Rs 250,000
Less: Exempt to the extent permitted by R.B.I Rs 100,000 = Rs 150,000
Gross Income from Salary Rs 625,000
[1+2+5+6]
Less: Standard Deduction Rs 40,000
Taxable Income from Salary Rs 585,000
========================================
Q6. Compute taxable salary of Arun:
Ans=Rs 503,600
Dearness Allowance Rs 20,000
HRA Rs 20,000
CCA Rs 2400
Medical Allowance Rs 1200
Gross Income from Salary Rs 543,600
Less: Standard Deduction Rs 40,000
Taxable Income from Salary Rs 503,600
1. House Rent Allowance received = 150,000
2. Excess of Rent paid over 10% of salary = 140,000
(Rent paid-10% of Salary)
(180,000-40,000)
3. As the accommodation Is not situated in specified cities, 40% of salary (40% of 400,000) = 160,000
Exempted amount of H.R.A. = 150,000
Taxable amount of H.R.A. = 10,000
[Actual amt of H.R.A.-Exempted amt]
[160,000-150,000]
========================================
(1). Gross Annual Salary Rs 300,000.
(2). Medical expenditure directly paid by the employer to private practitioner Rs 25,000.
(3). Medical expenditure directly paid by the employer to hospital approved by the Chief Commissioner of Income Tax. Rs 50,000
(4). Reimbursement of medical expenses incurred by the employee in a hospital approved by Chief Commissioner. Rs 20,000
(5). Expenditure on travelling abroad (including that of attendant) borne by the employer Rs 150,000.
(6). Expenditure incurred on stay and treatment abroad borne by the employer Rs 250,000
(7). Out of (6) amount permitted by the Reserve Bank of India Rs 100,000.
Ans=Rs 585,000
Solution:
Computation of Income from salary
2. Medical expenditure directly paid by the employer to private practitioner Rs 25,000
3. Medical expenditure directly paid by the employer to hospital approved by the Chief Commissioner of Income Tax Exempt
4. Medical expenditure directly paid by the employer to hospital approved by the Chief Commissioner of Income Tax. Exempt
5. Expenditure on travelling abroad Rs 150,000
Not exempt as is G.T.Income exceeds Rs 200,000
[Rs 300,000+25,000+150,000]
6. Expenditure on stay and treatment abroad Rs 250,000
Less: Exempt to the extent permitted by R.B.I Rs 100,000 = Rs 150,000
Gross Income from Salary Rs 625,000
[1+2+5+6]
Less: Standard Deduction Rs 40,000
Taxable Income from Salary Rs 585,000
========================================
Salary Rs 500,000, Dearness allowance (not forming part of salary) Rs 20,000, House rent allowance Rs 120,000, Actual rent paid Rs 150,000, Place of service Chennai, CCA Rs 200 p.m., Medical allowance Rs 100 p.m.
Ans=Rs 503,600
Computation of Taxabale salary of Arun
for the A.y. 2019-20
Salary Rs 500,000Dearness Allowance Rs 20,000
HRA Rs 20,000
CCA Rs 2400
Medical Allowance Rs 1200
Gross Income from Salary Rs 543,600
Less: Standard Deduction Rs 40,000
Taxable Income from Salary Rs 503,600
Note:
Calculation of HRA
Salary for the computation of H.R.A. = 500,000
Calculation of HRA
Salary for the computation of H.R.A. = 500,000
Least of the following amount will be exempted:
1. House Rent Allowance received = 120,000
2. Excess of Rent paid over 10% of salary = 100,000
(Rent paid-10% of Salary)
(150,000-50,000)
3. As the accommodation Is situated in specified cities, 50% of salary (50% of 500,000) = 250,000
Exempted amount of H.R.A. = 100,000
Taxable amount of H.R.A. = 20,000
[Actual amt of H.R.A.-Exempted amt]
[120,000-100,000]
========================================
Q7. Raman is employed as an Engine Driver in Indian Railways. He is getting Rs 15,000 p.m. as Basic pay Rs 2500 p.m., as Dearness pay and Rs 2500 p.m. as Dearness Allowance. During 2018-19, he received the following allowance also:
(i) Rs 16,500 as Running Allowance
(ii) Rs 200 p.m. per child as Educational allowance for his two children.
(iii) One of his sons is staying in a hostel on which Raman is spending Rs 800 p.m. He is getting Rs 500 p.m. for his son as Hostel allowance for meeting this expenditure.
(iv) Rs 250 p.m. as C.C.A.
(v) Rs 400 p.m. as uniform allowance fully spent for employment purposes.
(vi) R 2500 p.m. as H.R.A He pays Rs 3000 p.m. as rent to the house owner
Compute his Taxable Salary for the Assessment Year 2019-20.
Ans=Rs 227,750
Solution:
D.Pay 30,000
D.Allowance 30,000
Running Allowance 4950
Education Allowance 2400
Hostel Allowance 2400
C.C.A. 3000
Uniform Allowance exempted
H.R.A. 15,000
Gross Salary 267,750
Less: Standard Deduction 40,000
Taxable Salary Rs 227,750
Note:
1. Running Allowance :
Exempted =70% of Running Allowance [16,500] or Rs 10,000 p.m. which ever is less
Rs 11,550
Taxable Running Allowance=16,500-11550=Rs 4950
2. Education Allowance :
Exempted= Rs 100 p.m. upto two children= Rs 2400
Taxable Education Allowance = 4800-2400= Rs 2400
3. Hostel Allowance :
Exempted= Rs 300 p.m.= Rs 3600
Taxable Hostel Allowance = 6000-3600= Rs 2400
4. Uniform Allowance : Fully spent for employment purpose is exempted
5. House Rent Allowance :
Least of the following amt is exempted;
(a) H.R.A. received Rs 30,000
(b) Rent paid over 10% of salary Rs 15,000
[Rs 36,000-10% of Rs 210,000].
(c) 40% of Salary [40% of 210,000] Rs 84,000
Exempted amount = Rs 15,000
Taxable amount = Rs 30,000- Rs 15,000
= Rs 15,000
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Q8. X is pilot in Indian Airlines. He draws Rs 720,000 as salary Rs 180,000 as dearness allowance, Rs 600,000 as flight allowance to meet personal expenses while on duty, Rs 12,000 as conveyance allowance (actual expenses Rs 9,000) and Rs 7,200 as an educational allowance for his three children studying in a public school.
Determine the taxable value of the allowance paid to him.
Ans=Rs 667,800
Solution:
1. House Rent Allowance received = 120,000
2. Excess of Rent paid over 10% of salary = 100,000
(Rent paid-10% of Salary)
(150,000-50,000)
3. As the accommodation Is situated in specified cities, 50% of salary (50% of 500,000) = 250,000
Exempted amount of H.R.A. = 100,000
Taxable amount of H.R.A. = 20,000
[Actual amt of H.R.A.-Exempted amt]
[120,000-100,000]
========================================
Q7. Raman is employed as an Engine Driver in Indian Railways. He is getting Rs 15,000 p.m. as Basic pay Rs 2500 p.m., as Dearness pay and Rs 2500 p.m. as Dearness Allowance. During 2018-19, he received the following allowance also:
(i) Rs 16,500 as Running Allowance
(ii) Rs 200 p.m. per child as Educational allowance for his two children.
(iii) One of his sons is staying in a hostel on which Raman is spending Rs 800 p.m. He is getting Rs 500 p.m. for his son as Hostel allowance for meeting this expenditure.
(iv) Rs 250 p.m. as C.C.A.
(v) Rs 400 p.m. as uniform allowance fully spent for employment purposes.
(vi) R 2500 p.m. as H.R.A He pays Rs 3000 p.m. as rent to the house owner
Compute his Taxable Salary for the Assessment Year 2019-20.
Ans=Rs 227,750
Solution:
Computation of Taxable Salary
for the Assessment Year 2019-20
Basic pay 180,000D.Pay 30,000
D.Allowance 30,000
Running Allowance 4950
Education Allowance 2400
Hostel Allowance 2400
C.C.A. 3000
Uniform Allowance exempted
H.R.A. 15,000
Gross Salary 267,750
Less: Standard Deduction 40,000
Taxable Salary Rs 227,750
Note:
1. Running Allowance :
Exempted =70% of Running Allowance [16,500] or Rs 10,000 p.m. which ever is less
Rs 11,550
Taxable Running Allowance=16,500-11550=Rs 4950
2. Education Allowance :
Exempted= Rs 100 p.m. upto two children= Rs 2400
Taxable Education Allowance = 4800-2400= Rs 2400
3. Hostel Allowance :
Exempted= Rs 300 p.m.= Rs 3600
Taxable Hostel Allowance = 6000-3600= Rs 2400
4. Uniform Allowance : Fully spent for employment purpose is exempted
5. House Rent Allowance :
Least of the following amt is exempted;
(a) H.R.A. received Rs 30,000
(b) Rent paid over 10% of salary Rs 15,000
[Rs 36,000-10% of Rs 210,000].
(c) 40% of Salary [40% of 210,000] Rs 84,000
Exempted amount = Rs 15,000
Taxable amount = Rs 30,000- Rs 15,000
= Rs 15,000
=====================================
Q8. X is pilot in Indian Airlines. He draws Rs 720,000 as salary Rs 180,000 as dearness allowance, Rs 600,000 as flight allowance to meet personal expenses while on duty, Rs 12,000 as conveyance allowance (actual expenses Rs 9,000) and Rs 7,200 as an educational allowance for his three children studying in a public school.
Determine the taxable value of the allowance paid to him.
Ans=Rs 667,800
Solution:
Determination of taxable value of Allowances
1. Flight allowance Rs 600,000
Less: Exempt 70% of allowance or
10,000 p.m., whichever is less Rs 120,000 480,000
2. Conveyance Allowance Rs 12,000
Less: Actual Expenses Rs 9,000 3,000
3. Education Allowance Rs 7,200
Less: Exempt Rs 100 p.m. Rs 2,400 4,800
per child upto two children
4. Dearness Allowance 180,000
Taxable value of Allowance Rs 667,800
=====================================
Q9. X gets Rs 340,000 as basic pay Rs 24,000 as commission Rs 10,000 as bonus, Rs 6000 as uniform allowance (60% utilised for the uniform), transport allowance RS 22,800. A rent free unfurnished flat is provided in a place where the population (a) more than 25 lakh, (b) more than 10 lakh, (c) not exceeding 10 lakh.
Determine the taxable value rent free flat.
Ans= (a) Rs 59,880 (b) Rs 39,920 (c) Rs 29,940
Solution:
Value for Rent Free house
(a) 15% of Salary [15% of Rs 399,200] Rs 59,880
(b) 10% of Salary [10% of Rs 399,200] Rs 39,920
(c) 7.5% of Salary [7.5% of Rs 399,200] Rs 29,940
Note:
Salary=Basic Salary+Commission+bonus+uniform allowance+transport allowance
Salary=340,000+24,000+10,000+2400 (40% of 6000)+22,800
Salary=Rs 399,200
24% (Rs 730,000*50/365) or Hotel room rent Rs 100,000, which ever is less (i.e. Rs 24,000 or Rs 100,000) = Rs 24000
Less: Amount recovered from Mr. Manoj = Rs 10,000
Taxable Value of Perquisite =Rs 14000
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=====================================
Q10. Mr. Manoj is appointed at Mumbai. He stayed in a hotel fro 50 days and thereafter shifted in a house provided by the employer. From the following information determine the taxable value of perquisite, stay in hotel:
(a) Room rent in a hotel Rs 2000 per day,
(b) Salary for valuation of accommodation during the previous year Rs 730,000
(c) The employer recovered Rs 200 per day from Mr. Manoj regarding stay in a hotel.
(a) Room rent in a hotel Rs 2000 per day,
(b) Salary for valuation of accommodation during the previous year Rs 730,000
(c) The employer recovered Rs 200 per day from Mr. Manoj regarding stay in a hotel.
Ans= Rs 14,000
Solution:
Solution:
Computation of Taxable Value of Perquisite-Stay in Hotel
Less: Amount recovered from Mr. Manoj = Rs 10,000
Taxable Value of Perquisite =Rs 14000
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Q11. Find out the value of the perquisite of Motor-car provided to the employee and owned by the employer, in the following cases:
(a) Large Car: All expenses borne by the employer, which are Rs 100,000 p.a. The cost of the car is Rs 500,000. The car is solely used for a private purpose of the employee.
(b) Large Car: Meant for both private and official use. All expenses are borne by the employer.
(c) Small Car: Meant for both private and official use. All expenses are borne by the employer. Chauffeur is also provided free of charge.
(d) Large Car: Meant for both official and private purposes. Private expenses are borne by the employee.
Ans= (a) Rs 150,000 (b) Rs 28,800 (c) Rs 32,400 (d) Rs 10,800
Solution:
(a) Expenses borne by employer =Rs 100,000
Add: Depreciation@10% p.a. of actual cost of motor car=Rs 50,000
Value of perquisite of motor car= Rs 150,000
(b) Value of perquisite of motor car=Rs 2400*12=Rs 28,800
(c) Value of perquisite of motor car=Rs 1800*12+Chauffeur salary Rs 900 p.m.=Rs 32,400
(d) If expenses of maintenance and running of the car for private purposes are met by the employee, the value of the perquisite in the case of a large car will be @Rs 900 p.m.=Rs 10,800
(a) Large Car: All expenses borne by the employer, which are Rs 100,000 p.a. The cost of the car is Rs 500,000. The car is solely used for a private purpose of the employee.
(b) Large Car: Meant for both private and official use. All expenses are borne by the employer.
(c) Small Car: Meant for both private and official use. All expenses are borne by the employer. Chauffeur is also provided free of charge.
(d) Large Car: Meant for both official and private purposes. Private expenses are borne by the employee.
Ans= (a) Rs 150,000 (b) Rs 28,800 (c) Rs 32,400 (d) Rs 10,800
Solution:
(a) Expenses borne by employer =Rs 100,000
Add: Depreciation@10% p.a. of actual cost of motor car=Rs 50,000
Value of perquisite of motor car= Rs 150,000
(b) Value of perquisite of motor car=Rs 2400*12=Rs 28,800
(c) Value of perquisite of motor car=Rs 1800*12+Chauffeur salary Rs 900 p.m.=Rs 32,400
(d) If expenses of maintenance and running of the car for private purposes are met by the employee, the value of the perquisite in the case of a large car will be @Rs 900 p.m.=Rs 10,800
=====================================
Q12. The company has given Ravi a housing loan of Rs 500,000 on 01-10-2018 @ 6% interest p.a. The entire loan is outstanding until the end of the financial year. Determine the taxable amount of interest for the Assessment Year 2019-20 assuming that the rate of interest on housing loan charged by the State Bank of India is 10% p.a.
Ans= Rs 10,000
Solution:
Interest on loan [Rs 500,000*10%//2] =Rs 25,000
Less:Interest charged from Ravi [Rs 500,000*6%/2] =Rs 15,000
Chargeable Interest =Rs 10,000
Solution:
Basic Salary = Rs 480,000
Dearness pay = Rs 48,000
Excess on contribution in R.P.F by employer = Rs 15,840
[3% of Rs 528,0000]
Excess interest on fund balance =Rs 15,000
[Rs 72,000*2.5/12]
Gross Salary = Rs 558,840
Less:
(a) Standard Deduction=Rs 40,0000
(b) Professional Tax = Rs 2,000
Taxable Salary = Rs 516,840
(b) If Fund is Unrecognised
Basic Salary = Rs 480,000
Dearness pay = Rs 48,000
Excess on contribution in R.P.F by employer = Exempt
Excess interest on fund balance = Exempt
Gross Salary = Rs 528,000
Less:
(a) Standard Deduction=Rs 40,0000
(b) Professional Tax = Rs 2,000
Taxable Salary = Rs 486,000
Interest on loan [Rs 500,000*10%//2] =Rs 25,000
Less:Interest charged from Ravi [Rs 500,000*6%/2] =Rs 15,000
Chargeable Interest =Rs 10,000
=====================================
Q13. Mrs. R is an employee getting a monthly salary of Rs 40,000 plus a dearness pay of Rs 4000 p.m. She contributed 15% of her salary and dearness pay to provident fund to whom her employer contributes an equal amount. Interest on the provident fund is determined at the rate of 12% p.a. which amounted to Rs 72,000 for the previous year. She paid professional tax Rs 2000. What will be her taxable salary for the Assessment year 2019-20.If the provident fund is (a) Recognised, and (b) Unrecognised.
Ans= (a) Rs 5,16,840 (b) Rs 4,86,000
Solution:
Computation of taxable salary of Mr. R
for the A.Y. 2019-20
(a) If Fund is RecognisedBasic Salary = Rs 480,000
Dearness pay = Rs 48,000
Excess on contribution in R.P.F by employer = Rs 15,840
[3% of Rs 528,0000]
Excess interest on fund balance =Rs 15,000
[Rs 72,000*2.5/12]
Gross Salary = Rs 558,840
Less:
(a) Standard Deduction=Rs 40,0000
(b) Professional Tax = Rs 2,000
Taxable Salary = Rs 516,840
(b) If Fund is Unrecognised
Basic Salary = Rs 480,000
Dearness pay = Rs 48,000
Excess on contribution in R.P.F by employer = Exempt
Excess interest on fund balance = Exempt
Gross Salary = Rs 528,000
Less:
(a) Standard Deduction=Rs 40,0000
(b) Professional Tax = Rs 2,000
Taxable Salary = Rs 486,000
=====================================
Q14 Suresh is a government employee. He received salary Rs 50,000 p.m.dearness allowance Rs 55,000 p.m. and entertainment allowance Rs 5000 p.m. Calculate the amount of deductible from entertainment allowance.
Ans= Rs 5,000
Solution:
Least of the following amount will be deductible from entertainment allowance u/s 16(ii)
(a) Fixed amount = Rs 5,000
(b) 1/5 of Basic Salary [600,000/5] = Rs 120,000
(c) Actual amount = Rs 5000
Deductible Amount = Rs 5,000
Least of the following amount will be deductible from entertainment allowance u/s 16(ii)
(a) Fixed amount = Rs 5,000
(b) 1/5 of Basic Salary [600,000/5] = Rs 120,000
(c) Actual amount = Rs 5000
Deductible Amount = Rs 5,000
=====================================
Q15 Mr X. an employee with a Furniture dealer, submits the following particulars of his income for the Assessment Year 2019-20 and you are required to compute his gross income from salary:
(1) Basic salary on 1.4.2018 Rs 12000 p.m.
(2) Dearness allowance at Rs 1000 p.m. which is taken into account for retirement benefits.
(3) Free unfurnished accommodation in Mumbai. The rent paid by the employer is Rs 5000 p.m. on 1st September, 2018 his employer requested him to revise terms of employment due to the bad financial position of the company. The revised terms were:
(1) Basic salary Rs 10,000 p.m. from 1.9.2018
(2) Dearness allowance Rs 700 p.m.
(3) No accommodation provided.
For this revision in his terms, his employer paid him a lump sum of Rs 20,000, when he agreed to such revision.
His employer also sold him on 1.6.2018 old furniture for Rs 3,000. The cost of furniture on 1.4.2016 was Rs 10,000. Assume that salary is due on the last day of the month.
(1) Basic salary on 1.4.2018 Rs 12000 p.m.
(2) Dearness allowance at Rs 1000 p.m. which is taken into account for retirement benefits.
(3) Free unfurnished accommodation in Mumbai. The rent paid by the employer is Rs 5000 p.m. on 1st September, 2018 his employer requested him to revise terms of employment due to the bad financial position of the company. The revised terms were:
(1) Basic salary Rs 10,000 p.m. from 1.9.2018
(2) Dearness allowance Rs 700 p.m.
(3) No accommodation provided.
For this revision in his terms, his employer paid him a lump sum of Rs 20,000, when he agreed to such revision.
His employer also sold him on 1.6.2018 old furniture for Rs 3,000. The cost of furniture on 1.4.2016 was Rs 10,000. Assume that salary is due on the last day of the month.
Ans= Rs 174,650
Solution:
Basic Salary @ Rs 12,000 p.m. for 5 months =Rs 60,000
Basic Salary @ Rs 10,000 p.m. for 7 months = Rs 70,000
Dearness Allowance @ Rs 1000 p.m. for 5 months = Rs 5,000
Dearness Allowance @ Rs 700 p.m. for 7 months = Rs 4,900
Perquisites:
Value of rent free house:
Rent @ 5,000 p.m. for 5 months = Rs 25,000 or
15% of [Salary+D.A.] i.e.[60,000+5000]
15% of Rs 65,000 =Rs 9750
Which ever is less = Rs 9750
Furniture-Perquisite value= Rs 5,000
Compensation received in lieu of revision of terms = Rs 20,000
Gross Salary = Rs 174,650
[60,000+70,000+5,000+4,900+5,000+9750+20,000]
Note:
Perquisite value of furniture:
Cost = Rs 10,000
Less:Depreciation for two years @ 10% for each year =Rs 2000
Less: Amount recovered = Rs 3,000
Value of Perquisite = Rs 5000
Solution:
Computation of Gross Salary
Basic Salary @ Rs 10,000 p.m. for 7 months = Rs 70,000
Dearness Allowance @ Rs 1000 p.m. for 5 months = Rs 5,000
Dearness Allowance @ Rs 700 p.m. for 7 months = Rs 4,900
Perquisites:
Value of rent free house:
Rent @ 5,000 p.m. for 5 months = Rs 25,000 or
15% of [Salary+D.A.] i.e.[60,000+5000]
15% of Rs 65,000 =Rs 9750
Which ever is less = Rs 9750
Furniture-Perquisite value= Rs 5,000
Compensation received in lieu of revision of terms = Rs 20,000
Gross Salary = Rs 174,650
[60,000+70,000+5,000+4,900+5,000+9750+20,000]
Note:
Perquisite value of furniture:
Cost = Rs 10,000
Less:Depreciation for two years @ 10% for each year =Rs 2000
Less: Amount recovered = Rs 3,000
Value of Perquisite = Rs 5000
=====================================
Q16 Mr. X has furnished the following details with regard to his salary income for the year ended 31st March 2019:
(i) Salary at Rs 12,000 p.m.
(ii) Bonus at six month's salary.
(iii) Travelling allowance for a tour at Rs 300 p.m.
(iv) Entertainment allowance of Rs 500 p.m.
(v) Commission equal to four month's pay
(a) He is also provided with a free furnished quarter in a city (population 15 lakh), valued at Rs 3,000 p.m. an furniture and fitting of the value of Rs 10,000. He is also provided with free lunch at the company value of Rs 60 per meal for 300 working days.
(b) He claims:
(i) Electricity and water charges incurred by him for his residence Rs 1,600 p.a.
(i) Entertainment and travelling allowance in full.
(c) His contribution to the company's Recognised Provident Fund is at Rs 2000 p.m.and the employer contributes and equal sum. The interest credited to the Provident Fund Account Rs 12,000 at 9.5%. Compute his taxable salary.
(i) Salary at Rs 12,000 p.m.
(ii) Bonus at six month's salary.
(iii) Travelling allowance for a tour at Rs 300 p.m.
(iv) Entertainment allowance of Rs 500 p.m.
(v) Commission equal to four month's pay
(a) He is also provided with a free furnished quarter in a city (population 15 lakh), valued at Rs 3,000 p.m. an furniture and fitting of the value of Rs 10,000. He is also provided with free lunch at the company value of Rs 60 per meal for 300 working days.
(b) He claims:
(i) Electricity and water charges incurred by him for his residence Rs 1,600 p.a.
(i) Entertainment and travelling allowance in full.
(c) His contribution to the company's Recognised Provident Fund is at Rs 2000 p.m.and the employer contributes and equal sum. The interest credited to the Provident Fund Account Rs 12,000 at 9.5%. Compute his taxable salary.
Ans= Rs 267,720
Solution:
Bonus = Rs 72,000
Commission = Rs 48,000
Entertainment Allowance = Rs 6,000
Value of rent free quarter = Rs 28,000
Employer's contribution to Provident Fund in excess of 12% of salary = Rs 24,000-17,280= Rs 6,720
Lunch = Rs (60-50) * 300 = Rs 3,000
Gross Salary = Rs 307,720
[144,000+72,000+48,000+6,000+28,000+6,720+3000]
Less: Standard Deduction = Rs 40,000
Taxable Salary = Rs 267,720
Note:
1. The value of Rent free furnished house will be 10% of salary plus 10% of the original cost of furniture and fittings.
Hence, 10% of salary, [144,000+72,0006+48,000+6,000] = Rs 27,000 plus Rs 1,000 [10% of 10,000] = Rs 28,000
Computation of Taxable Salary
(for the Assessment Year 2019-20)
Salary = Rs 144,000Bonus = Rs 72,000
Commission = Rs 48,000
Entertainment Allowance = Rs 6,000
Value of rent free quarter = Rs 28,000
Employer's contribution to Provident Fund in excess of 12% of salary = Rs 24,000-17,280= Rs 6,720
Lunch = Rs (60-50) * 300 = Rs 3,000
Gross Salary = Rs 307,720
[144,000+72,000+48,000+6,000+28,000+6,720+3000]
Less: Standard Deduction = Rs 40,000
Taxable Salary = Rs 267,720
Note:
1. The value of Rent free furnished house will be 10% of salary plus 10% of the original cost of furniture and fittings.
Hence, 10% of salary, [144,000+72,0006+48,000+6,000] = Rs 27,000 plus Rs 1,000 [10% of 10,000] = Rs 28,000
=====================================
Q17 Mr. Ram Gopal, an employee in a company, is drawing Rs 40,000 p.m. as salary plus 10% of his salary as dearness pay. He is getting entertainment allowance of Rs 1,000 p.m. He has spent Rs 5,000 on the entertainment of the company's customers. He is provided with a rent-free unfurnished house at Allahabad of the fair rental value of Rs 5,000 p.m. The house is owned by the company. He is also provided with a small car for his personal and official use and all the expenses of its maintenance and running are met by company. Find out taxable salary for the Assessment Year 2019-20.
Ans= Rs 602,600
Solution:
Dearness Pay = Rs 48,000
Entertainment Allowance = Rs 12,000
Value of Rent-free house = Rs 81,000
Value of Motor car (Rs 1800*12) =Rs 21,600
Gross Salary = Rs 642,600
Less: Standard Deduction = Rs 40,000
Taxable Salary = Rs 602,600
Note:
Value of Rent free House:
15% of salary [480,000+48,000+12,000] = Rs 81,000
Dearness Pay= Rs 30,000
Entertainment Allowance = Rs 12,000
Value of Rent free house = Rs 51,300
Value of Motor Car = Rs 32,400
Interest on loan = Rs 10,000
Gross Salary = Rs 435,700
[300,000+30,000+12,000+51,300+32,400+10,000]
Less: Standard Deduction = Rs 40,000
Taxable Salary = Rs 395,700
Note:
(1) Value of Rent free House:
15% of salary [300,000+30,000+12,000] = Rs 51,300
(2) Value of Motor Car: [Rs 1800*12]+[Rs 900*12]= Rs 32,400
(3) Interest on loan : 10% of 100,000 = Rs 1,000
Computation of Taxable Salary
(for the Assessment Year 2019-20)
Salary = Rs 480,000Dearness Pay = Rs 48,000
Entertainment Allowance = Rs 12,000
Value of Rent-free house = Rs 81,000
Value of Motor car (Rs 1800*12) =Rs 21,600
Gross Salary = Rs 642,600
Less: Standard Deduction = Rs 40,000
Taxable Salary = Rs 602,600
Note:
Value of Rent free House:
15% of salary [480,000+48,000+12,000] = Rs 81,000
=====================================
Q18 Mr. Devendra, an employee in a company at Delhi, is drawing a salary of Rs 25,000 p.m. plus 10% of his salary as dearness pay. He is getting entertainment allowance of Rs 1,000 p.m. He has spent Rs 5,000 on the entertainment of the company's customers. He is provided with a rent free unfurnished house of the fair rental value of Rs 4,000 p.m.The house is owned by the company.He is also provided with a small car for his personal and official use and all expenses of its running,maintenance and driver are met by the company. Devendra borrowed Rs 100,000 interest free loan from the company to construct the house before one year. Assume the SBI charges on such loans @ 10 p.a.
Calculate the value of perquisite of Mr. Devendra for the assessment year 2019-20.
Calculate the value of perquisite of Mr. Devendra for the assessment year 2019-20.
Ans= (a) RFH=Rs 51,300 (b) Car = Rs 32,400 (c) Int. on loan = Rs 10,000
(d) Taxable Salary = Rs 395,700
Solution:
(d) Taxable Salary = Rs 395,700
Solution:
Valuation of Perquisite and Taxable Salary of Mr Devendra
(for the Assessment Year 2019-20)
Salary = Rs 300,000Dearness Pay= Rs 30,000
Entertainment Allowance = Rs 12,000
Value of Rent free house = Rs 51,300
Value of Motor Car = Rs 32,400
Interest on loan = Rs 10,000
Gross Salary = Rs 435,700
[300,000+30,000+12,000+51,300+32,400+10,000]
Less: Standard Deduction = Rs 40,000
Taxable Salary = Rs 395,700
Note:
(1) Value of Rent free House:
15% of salary [300,000+30,000+12,000] = Rs 51,300
(2) Value of Motor Car: [Rs 1800*12]+[Rs 900*12]= Rs 32,400
(3) Interest on loan : 10% of 100,000 = Rs 1,000
=====================================
Q19 Mr. 'B's employed in Mumbai. His particulars of income for the Assessment year 2019-20 are as follows :
Basic Salary Rs 17,000 p.m., Dearness Allowance Rs 4,000 p.m. (40% is computed for retirement benefit), Bonus Rs 20,0000 p.a. Commission Rs 15,000 p.a. Entertainment allowance Rs 3,000 p.m.
Compute Mr. 'B's salary Income for the Assessment Year 2019-20.
Ans= Rs 283,000
Solution:
Basic Salary Rs 17,000 p.m., Dearness Allowance Rs 4,000 p.m. (40% is computed for retirement benefit), Bonus Rs 20,0000 p.a. Commission Rs 15,000 p.a. Entertainment allowance Rs 3,000 p.m.
Compute Mr. 'B's salary Income for the Assessment Year 2019-20.
Ans= Rs 283,000
Solution:
Computation of Taxable Salary of Mr 'B's
(for the Assessment Year 2019-20)
Basic Salary = Rs 204,000
D.Allowance = Rs 48,000.
Bonus = Rs 20,000
Commission= Rs 15,000
Ent. Allowance= Rs 36,000
Gross Salary= Rs 323,000
Less: Deduction = Rs 40,000
Taxable Salary= Rs 283,000
Solution:
D.Allowance = Rs 48,000.
Bonus = Rs 20,000
Commission= Rs 15,000
Ent. Allowance= Rs 36,000
Gross Salary= Rs 323,000
Less: Deduction = Rs 40,000
Taxable Salary= Rs 283,000
=====================================
Q20 Following particulars are furnished by Mr. Vasanth, a citizen and resident of India: (a) Basic Salary after deduction of contribution to R.P.F. Rs 240,000 (b) Own contribution to R.P.F. 20,000, (c) Interest credited to R.P.F. @ 9.5% Rs 3,600; (d) House rent allowance (the house is at kolar and rent paid amounts to Rs 30,000) Rs 14,400; (e) Unit linked Insurance Plan contribution paid by employer Rs 2,000. compute the taxable salary of Mr. Vasanth for the Assessment Year 2019-20.
Ans= Rs 232,400
Solution:
Computation of Taxable Salary of Mr Vasanth
(for the Assessment Year 2019-20)
Salary before contribution to R.P.F. = Rs 260,000
[Rs 240,0000+Rs 20,000]
House Rent Allowance = Rs 10,400
ULIP paid by employer = Rs 2,000
Gross Salary = Rs 272,400
Less: Standard Deduction = Rs 40,000
Taxable Salary = Rs 232,400
Note:
1. Taxable portion of H.R.A has been calculated as under:
Least of the following will exempted from H.R.A.
(a) Actual amount of H.R.A. received = Rs 14,400
(b) Excess of rent paid over 10% of salary [Rs 30,000-26,000]= Rs 4,000
(c) 40% of Salary [40% of 260,000] = Rs 104,000
Exempted amount of H.R.A= Rs 4,000
Taxable amount of H.R.A. = Rs 14,400- Rs 4,000= Rs 10,400
[Rs 240,0000+Rs 20,000]
House Rent Allowance = Rs 10,400
ULIP paid by employer = Rs 2,000
Gross Salary = Rs 272,400
Less: Standard Deduction = Rs 40,000
Taxable Salary = Rs 232,400
Note:
1. Taxable portion of H.R.A has been calculated as under:
Least of the following will exempted from H.R.A.
(a) Actual amount of H.R.A. received = Rs 14,400
(b) Excess of rent paid over 10% of salary [Rs 30,000-26,000]= Rs 4,000
(c) 40% of Salary [40% of 260,000] = Rs 104,000
Exempted amount of H.R.A= Rs 4,000
Taxable amount of H.R.A. = Rs 14,400- Rs 4,000= Rs 10,400
=====================================
City Compensatory Allowance = Rs 10,000
Bonus = Rs 15,000
Entertainment Allowance = Rs 5,000
Value of Rent free house = Rs 42,300
Gas & Electricity = Rs 6,000
Value of Car @ 600 p.m. =Rs 7,200
Gross Salary = Rs 385,500
Less: Std. Deduction = Rs 40,000
Taxable Salary = Rs 345,500
Note:
Value of Rent Free House;
15% of Salary [300,000+10,000+15,000+5,000] = Rs 49,500
or Actual rent [Rs 7500*12= Rs 90,000] which is ever is less
Less: Amount Recovered [Rs 600*12]= Rs 7,200
Value of Rent free house = Rs 42,300
[49,500-7200]
=====================================
Q21 Mr. Kishore (an employee of HUF) furnishes the following particulars of his income for the financial year 2018-19:
Net basic salary Rs 270,000 after deducting contribution to R.P.F. Rs 30,000. Employer's contribution to R.P.F. Rs 30,000. Interest on P.F. account balance @ 9.5% p.a. Rs 28,500; Travelling allowance for tour Rs 2,400; City compensatory allowance @ Rs 10,000; Bonus Rs 15,000; Entertainment Allowance Rs 5,000.
Unfurnished house at Dharwar for which the employer pays Rs 7,500 p.m. as rent, but deducts only Rs 600 p.m. from his salary.
Free gas and electricity provided by the employer pays at a cost of Rs 500 p.m. The employer has provided a small car for private and official purposes, expenses for private purposes are met by Mr. Kishore. Compute his Taxable Salary for the Assessment Year 2019-20.
Net basic salary Rs 270,000 after deducting contribution to R.P.F. Rs 30,000. Employer's contribution to R.P.F. Rs 30,000. Interest on P.F. account balance @ 9.5% p.a. Rs 28,500; Travelling allowance for tour Rs 2,400; City compensatory allowance @ Rs 10,000; Bonus Rs 15,000; Entertainment Allowance Rs 5,000.
Unfurnished house at Dharwar for which the employer pays Rs 7,500 p.m. as rent, but deducts only Rs 600 p.m. from his salary.
Free gas and electricity provided by the employer pays at a cost of Rs 500 p.m. The employer has provided a small car for private and official purposes, expenses for private purposes are met by Mr. Kishore. Compute his Taxable Salary for the Assessment Year 2019-20.
Ans= Rs 345,500
Solution:
Computation of Taxable Salary of Mr. Kishore
for the Assessment Year 2019-20
Salary [270,000+30,000] = Rs 300,000City Compensatory Allowance = Rs 10,000
Bonus = Rs 15,000
Entertainment Allowance = Rs 5,000
Value of Rent free house = Rs 42,300
Gas & Electricity = Rs 6,000
Value of Car @ 600 p.m. =Rs 7,200
Gross Salary = Rs 385,500
Less: Std. Deduction = Rs 40,000
Taxable Salary = Rs 345,500
Note:
Value of Rent Free House;
15% of Salary [300,000+10,000+15,000+5,000] = Rs 49,500
or Actual rent [Rs 7500*12= Rs 90,000] which is ever is less
Less: Amount Recovered [Rs 600*12]= Rs 7,200
Value of Rent free house = Rs 42,300
[49,500-7200]
Q22 Mr. Gupta is working in a transport company drawing a salary of Rs 11,000 p.m. The company has provided him with accommodation for which 10% of his salary is deducted. Actual rent paid by the company for the accommodation is 54,000 p.a. He is also receiving entertainment allowance Rs 500 p.m. He is provided by the company with a large car for his personal and official use. Expenses for personal use are borne by the assessee himself. Members of assessee's family have visited a number of places in company's buses for which no fare had been charged. Total fare for all these visits during the accounting year amounted to Rs 7,200. He is in receipt of a bonus equivalent to 2 month's salary. Compute his taxable income under the head 'Salary' for the Assessment Year 2019-20.
Ans= Rs 148,800
Solution:
Value of Rent free house = Rs 10,800
Entertainment Allowance = Rs 6,000
Value of Car = Rs [Rs 900*12] = Rs 10,800
Transport facility = Rs 7,200
Bonus = Rs 22,000
Gross Salary= Rs 188,800
Less: Std. Deduction = Rs 40,000
Taxable Salary = Rs 148,800
Note:
Value of Rent Free House;
15% of Salary [132,000+6,000+22,000] =Rs 24,000
or Actual rent =Rs 54,000 which is ever is less
Less: Amount Recovered [10% 132,000]= Rs 13,200
Value of Rent free house = Rs 10,800
[24,000-13,200]
=====================================
Solution:
Computation of Taxable Salary of Mr. Gupta
for the Assessment Year 2019-20
Salary = Rs 132,000Value of Rent free house = Rs 10,800
Entertainment Allowance = Rs 6,000
Value of Car = Rs [Rs 900*12] = Rs 10,800
Transport facility = Rs 7,200
Bonus = Rs 22,000
Gross Salary= Rs 188,800
Less: Std. Deduction = Rs 40,000
Taxable Salary = Rs 148,800
Note:
Value of Rent Free House;
15% of Salary [132,000+6,000+22,000] =Rs 24,000
or Actual rent =Rs 54,000 which is ever is less
Less: Amount Recovered [10% 132,000]= Rs 13,200
Value of Rent free house = Rs 10,800
[24,000-13,200]
=====================================
Q23 From the following particulars compute the taxable income under the head Salaries of Shri Ramanlal for the Assessment Year 2019-20:
He is employed in the textile industry in Mumbai on a monthly salary Rs 60,000. In addition, he is entitled to 1% commission on sales achieved through him, which amounted to Rs 10,00,000 for the previous year.
He received the following allowance and amenities from the employer during the previous year:
(i) Dearness allowance of Rs 10,000 p.m. which is granted under terms of employment and counted for retirement benefit.
(ii) Bonus Rs 32,000
(iii) House rent allowance @ Rs 10,000 p.m.
(iv) Entertainment allowance @ Rs 1,000 p.m.
(v) The employer paid Rs 1,000 income tax on perquisites.
(vi) The employer provided a travel concession of Rs 3,500 for his travel to Shimla during the leave. Assume that the leave travel concession fulfills the conditions prescribed by the Central Government.
(vii) He had been provided with the amenities of gas, electricity and water, the expenses of which amounting Rs 50,000 were paid by the employer.
(viii) He and his employer each contributed 14% of his salary to a recognised provident fund. The interest credited to this fund for the previous year at 9.5% rate of interest amount to Rs 9,800.
(ix) He spent Rs 14,000 p.m. as the rent of the house occupied by him in Mumbai.
He is employed in the textile industry in Mumbai on a monthly salary Rs 60,000. In addition, he is entitled to 1% commission on sales achieved through him, which amounted to Rs 10,00,000 for the previous year.
He received the following allowance and amenities from the employer during the previous year:
(i) Dearness allowance of Rs 10,000 p.m. which is granted under terms of employment and counted for retirement benefit.
(ii) Bonus Rs 32,000
(iii) House rent allowance @ Rs 10,000 p.m.
(iv) Entertainment allowance @ Rs 1,000 p.m.
(v) The employer paid Rs 1,000 income tax on perquisites.
(vi) The employer provided a travel concession of Rs 3,500 for his travel to Shimla during the leave. Assume that the leave travel concession fulfills the conditions prescribed by the Central Government.
(vii) He had been provided with the amenities of gas, electricity and water, the expenses of which amounting Rs 50,000 were paid by the employer.
(viii) He and his employer each contributed 14% of his salary to a recognised provident fund. The interest credited to this fund for the previous year at 9.5% rate of interest amount to Rs 9,800.
(ix) He spent Rs 14,000 p.m. as the rent of the house occupied by him in Mumbai.
Ans= Rs 962,250
Solution:
Computation of Taxable Salary of Mr. Raman Lal
for the Assessment Year 2019-20
Salary = Rs 720,000
Commission of Sales [1% of 10,00,000] = Rs 10,000
Dearness Allowance = Rs 120,000
Bonus = Rs 32,000
Value of H.R.A. = Rs 37,000
Entertainment Allowance = Rs 12,000
Gas, Electricity and Water = Rs 50,000
Excess contribution in RPF by employer (2.5% of 850,000) = Rs 21,250
Gross Salary= Rs 10,02,250
Less: Std. Deduction = Rs 40,000
Taxable Salary = Rs 9,62,250
Note:
1. Taxable portion of H.R.A has been calculated as under:
Least of the following will exempted from H.R.A.
(a) Actual amount of H.R.A. received = Rs 120,000
(b) Excess of rent paid over 10% of salary [Rs 168,000-85,000]= 83,000
(c) 50% of Salary [50% of 850,000] = Rs 4,25,000
Exempted amount of H.R.A= Rs 83,000
Taxable amount of H.R.A. = Rs 120,000- R 83,000= Rs 37,000
Note:
Value of Rent Free House
7.5% of Salary (180,000+12,000+2400+10,000) = 15330
Less: Amount Charged = Rs 6000
Value of Rent Free House = Rs 9330
1/5 of Basic Salary or Rs 5000 or Actual Amount which ever is least;
[24,000 or 5,000 or 3600]
Commission of Sales [1% of 10,00,000] = Rs 10,000
Dearness Allowance = Rs 120,000
Bonus = Rs 32,000
Value of H.R.A. = Rs 37,000
Entertainment Allowance = Rs 12,000
Gas, Electricity and Water = Rs 50,000
Excess contribution in RPF by employer (2.5% of 850,000) = Rs 21,250
Gross Salary= Rs 10,02,250
Less: Std. Deduction = Rs 40,000
Taxable Salary = Rs 9,62,250
Note:
1. Taxable portion of H.R.A has been calculated as under:
Least of the following will exempted from H.R.A.
(a) Actual amount of H.R.A. received = Rs 120,000
(b) Excess of rent paid over 10% of salary [Rs 168,000-85,000]= 83,000
(c) 50% of Salary [50% of 850,000] = Rs 4,25,000
Exempted amount of H.R.A= Rs 83,000
Taxable amount of H.R.A. = Rs 120,000- R 83,000= Rs 37,000
=====================================
Q24.
Solution:
Computation of Taxable Salary of Mr. Haridas
for the Assessment Year 2019-20
Salary = Rs 132,000
Dearness Allowance = Rs 120,000
Entertainment Allowance = Rs 28,800
House Rent Allowance = Rs 4800
Employer contribution to RPF = Rs 2640
Value of Car (1800*12) = Rs 21,600
Gross Salary= Rs 3,09,840
Less: Std. Deduction = Rs 40,000
Taxable Salary = Rs 2,69,840
Note:
1. Taxable portion of H.R.A has been calculated as under:
Least of the following will exempted from H.R.A.
(a) Actual amount of H.R.A. received = Rs 57,600
(b) Excess of rent paid over 10% of salary [Rs 72,000-13,200]= 58,800
(c) 40% of Salary [40% of 132,000] = Rs 52,800
Exempted amount of H.R.A= Rs 52,800
Taxable amount of H.R.A. = Rs 57,600- Rs 52,800 = Rs 4800
Dearness Allowance = Rs 120,000
Entertainment Allowance = Rs 28,800
House Rent Allowance = Rs 4800
Employer contribution to RPF = Rs 2640
Value of Car (1800*12) = Rs 21,600
Gross Salary= Rs 3,09,840
Less: Std. Deduction = Rs 40,000
Taxable Salary = Rs 2,69,840
Note:
1. Taxable portion of H.R.A has been calculated as under:
Least of the following will exempted from H.R.A.
(a) Actual amount of H.R.A. received = Rs 57,600
(b) Excess of rent paid over 10% of salary [Rs 72,000-13,200]= 58,800
(c) 40% of Salary [40% of 132,000] = Rs 52,800
Exempted amount of H.R.A= Rs 52,800
Taxable amount of H.R.A. = Rs 57,600- Rs 52,800 = Rs 4800
=====================================
Q25.
Solution:
Computation of Taxable Salary of Mr. Rang Rajan
for the Assessment Year 2019-20
Salary = Rs 2,79,600
Dearness Allowance = Rs 1,39,800
Entertainment Allowance = Rs 180,000
House Rent Allowance = Rs Nil
Sweeper = Rs 2400
Gardener = Rs 2400
Cook = Rs 2400
Value of Car = Rs 100,800
Income Tax = Rs 50,000
Gross Salary= Rs 7,57,400
Less: Std. Deduction = Rs 40,000
Taxable Salary = Rs 7,17,400
Note:
1. Car
Large Car (Rs 900*12) = RS 10,800
Small Car:
(Depreciation @ 10% on 300,000) = Rs 30,000
Expenses =Rs 60,000
Value of Car (10,800+30,000+60,000)= Rs 100,800
2. Salary
April 2018 To Dec 2018 = Rs 23200*9= Rs 208,800
Jan 2019 To March 2019 = Rs 23600*3= Rs 70,800
Total Salary [208,800+70,800] = Rs 279,600
=====================================
Q26 Sri Rajeev furnished the following particulars of his income for the f.y. 2018-19:
(a) salary Rs 15000 p.m. (b) Dearness allowance Rs 1250 p.m. (c) Entertainment allowance Rs 1000 p.m. (d) Employer's and employee's contribution to a recognised provident fund Rs 24000 each. (e) Interest from provident fund @ 9.5% p.a. Rs 19000 (f) City Compensatory Allowance Rs 200 p.m.. (g) Medical Allowance Rs 10,000. (h) He has been provided with the facility of an unfurnished house by the employer in a town (population less than 10 lakh) for which the employer charges Rs 500 p.m. The fair rent of the house is Rs 30,000 p.a. The house is owned by the employer . (i) The employer has employed for the sweeper @ 200 p.m. and a servant @ Rs 750 p.m.
Compute the taxable income under the head salary for the Assessment Year 2019-20.
(a) salary Rs 15000 p.m. (b) Dearness allowance Rs 1250 p.m. (c) Entertainment allowance Rs 1000 p.m. (d) Employer's and employee's contribution to a recognised provident fund Rs 24000 each. (e) Interest from provident fund @ 9.5% p.a. Rs 19000 (f) City Compensatory Allowance Rs 200 p.m.. (g) Medical Allowance Rs 10,000. (h) He has been provided with the facility of an unfurnished house by the employer in a town (population less than 10 lakh) for which the employer charges Rs 500 p.m. The fair rent of the house is Rs 30,000 p.a. The house is owned by the employer . (i) The employer has employed for the sweeper @ 200 p.m. and a servant @ Rs 750 p.m.
Compute the taxable income under the head salary for the Assessment Year 2019-20.
Ans= Rs 202,530
Solution:
Solution:
Computation of Taxable Salary of Mr. Rajeev
for the Assessment Year 2019-20
Salary = Rs 180,000
Dearness Allowance = Rs 15,000
Entertainment Allowance = Rs 12,000
Employer contribution to R.P.F. = Rs 2400
City Compensatory Allowance = Rs 2400
Medical Allowance = Rs 10,000
Sweeper = Rs 2400
Servant = Rs 9000
Value of Rent free house = Rs 9330
Gross Salary = Rs 242,530
Less: Deduction = Rs 40,000
Taxable Salary = Rs 202,530
Value of Rent Free House
7.5% of Salary (180,000+12,000+2400+10,000) = 15330
Less: Amount Charged = Rs 6000
Value of Rent Free House = Rs 9330
=====================================
Q27
Solution:
Computation of Taxable Salary of Smt. Ravi
for the Assessment Year 2019-20
Salary = Rs 360,000
Dearness Allowance = Rs 84,000
Entertainment Allowance = Rs 6,000
Perquisites:
Gardner = Rs 3600
Sweeper = Rs 3600
Servant = Rs 3600
Refrigerator (10%) = Rs 500
Gas, Elec. & Water = Rs 2000
Membership fee of Rotary Club = Rs 2400
Car (1800+900)*12 = Rs 32400
Holiday Home = Rs 6000
Concession on Shares = Rs 25000
Gross Salary = Rs 5,29,100
Less: Deduction = Rs 40,000
Taxable Salary = RS 489,100
=====================================
Q28
Solution:
Computation of Taxable Salary of Shri Krishna Mohan
for the Assessment Year 2019-20
Salary = Rs 180,000
Dearness Allowance= Rs 144,000
C.C.A = Rs 2400
House Rent Allowance = Nil
Gross Salary = Rs 3,26,400
Less: Deduction = Rs 40,000
Taxable Salary = RS 2,86,400
Note:
Value of House Rent Allowance
1. Actual Amount of H.R.A. = Rs 36000
2. Rent paid - 10% of Salary = Rs 42000
[60,000-18,000]
3. 40% of Salary = Rs 72000
Exempt Amount = Rs 36000
Taxable Amount = Rs Nil
=====================================
Q29
Solution:
Computation of Taxable Salary of Mr X
for the Assessment Year 2019-20
Salary = Rs 180,000
Planning Allowance = Rs 12000
Medical Allowance = Rs 12000
Entertainment Allowance = Rs 6000
Travelling Allowance of Tour = Exempt
Value of Rent Free House = Rs 23500
Planning Allowance = Rs 12000
Medical Allowance = Rs 12000
Entertainment Allowance = Rs 6000
Travelling Allowance of Tour = Exempt
Value of Rent Free House = Rs 23500
Gross Salary = Rs 2,33,500
Less: Deduction = Rs 40,000
Taxable Salary = RS 1,93,500
Note:
Value of Rent Free House
15% of Salary [15% of 210,000] = Rs 31500
Add = 10% of Furniture = Rs 4000
Less = Amount Recovered = Rs 12000
Value of Rent Free House = Rs 23,500
=====================================
Q30
Solution:
Computation of Taxable Salary of Mr X
for the Assessment Year 2019-20
Salary = Rs 600,000
Dearness Allowance = Rs 144,000
Entertainment Allowance = Rs 3600
Hill area compensatory Allowance = Rs 1800
[5400-Exempt u/s 10[14] 300 p.m.]
Tribal area allowance = Rs 1800
[4200-Exempt u/s 10[14] 200 p.m.]
House Rent Allowance = Rs 30,000
Employer Contribution and Interest on S.P.F is exempted
Dearness Allowance = Rs 144,000
Entertainment Allowance = Rs 3600
Hill area compensatory Allowance = Rs 1800
[5400-Exempt u/s 10[14] 300 p.m.]
Tribal area allowance = Rs 1800
[4200-Exempt u/s 10[14] 200 p.m.]
House Rent Allowance = Rs 30,000
Employer Contribution and Interest on S.P.F is exempted
Gross Salary = Rs 781,200
Less: Deduction = Rs 40,000
Less: Entertainment Allowance = Rs 3600
Taxable Salary = RS 7,37,600Less: Entertainment Allowance = Rs 3600
Note:
Value of House Rent Allowance
1. Actual Amount of H.R.A. = Rs 120,000
2. Rent paid - 10% of Salary = Rs 90,000
[150,000-60,000]
3. 40% of Salary = Rs 240,000
Exempt Amount = Rs 90,000
Taxable Amount = Rs 30,000
[120,000-90,000]
Entertainment Allowance
Since Mr X. is a Govt. Employee. He is eligible of Entertainment Allowance Deduction, which is as follows;1/5 of Basic Salary or Rs 5000 or Actual Amount which ever is least;
[24,000 or 5,000 or 3600]
=====================================
Q31
Solution:
Computation of Taxable Salary of Mr Atul
for the Assessment Year 2019-20
Salary = Rs 780,000
Value of Rent Free House = Rs 14,000
Entertainment Allowance = Rs 6000
Dearness Allowance = Rs 78000
Value of Rent Free House = Rs 14,000
Entertainment Allowance = Rs 6000
Dearness Allowance = Rs 78000
Gross Salary = Rs 8,78,000
Less: Deduction = Rs 40,000
Less: Entertainment Allowance = Rs 5000
Taxable Salary = RS 8,33,000
Note:
Value of Rent Free House
Licenses Fees as per Govt. Rules = Rs 12,000
Add: 10% of Furniture = Rs 2,000
Value of Rent Free House = Rs 14,000
Entertainment Allowance Deduction for Govt. Employee
1/5 of Basic Salary or Rs 5000 or Actual Amt. of Ent. Allow. which ever is less
Add: 10% of Furniture = Rs 2,000
Value of Rent Free House = Rs 14,000
Entertainment Allowance Deduction for Govt. Employee
1/5 of Basic Salary or Rs 5000 or Actual Amt. of Ent. Allow. which ever is less
=====================================
Q32
Solution:
Computation of Taxable Salary of Mr Shyam
for the Assessment Year 2019-20
Salary from the former employer = Rs 72,000
[April to July]
Salary from the present employer = Rs 160,000
[Aug-March]
Lump-Sum amount received from U.R.P.Fund = Rs 40,000
[Employer contribution & Interest thereon]
[80,000/2]
Present Employer contribution in R.P.F. = Rs 1600
[20,800-19,200]
Value of Rent Free House = Rs 12000
[7.5% of Salary]
Gross Salary = Rs 2,85,600
[April to July]
Salary from the present employer = Rs 160,000
[Aug-March]
Lump-Sum amount received from U.R.P.Fund = Rs 40,000
[Employer contribution & Interest thereon]
[80,000/2]
Present Employer contribution in R.P.F. = Rs 1600
[20,800-19,200]
Value of Rent Free House = Rs 12000
[7.5% of Salary]
Gross Salary = Rs 2,85,600
Less: Deduction = Rs 40,000
Taxable Salary = RS 2,45,600
=====================================
Q33
Solution:
Computation of Taxable Salary of woman
for the Assessment Year 2019-20
(i) When R.P.F. is Recognised
Salary = Rs 180,000
Value of Rent Free House = Rs 27000
[15% of Salary]
Excess Contribution in R.P.F. = Rs 3600
Interest on R.P.F. = exempt
Gross Salary = Rs 2,10,600
Salary = Rs 180,000
Value of Rent Free House = Rs 27000
[15% of Salary]
Excess Contribution in R.P.F. = Rs 3600
Interest on R.P.F. = exempt
Gross Salary = Rs 2,10,600
Less: Deduction = Rs 40,000
Taxable Salary = RS 1,70,600
(ii) When R.P.F. is UnRecognised
Salary = Rs 180,000
Value of Rent Free House = Rs 27000
[15% of Salary]
Excess Contribution in R.P.F. = exempt
Interest on R.P.F. = exempt
Gross Salary = Rs 2,07,00
Note:
The proceed of an endowment policy is a capital receipt, so it will not to be included in income from salary.
=====================================
Salary = Rs 180,000
Value of Rent Free House = Rs 27000
[15% of Salary]
Excess Contribution in R.P.F. = exempt
Interest on R.P.F. = exempt
Gross Salary = Rs 2,07,00
Less: Deduction = Rs 40,000
Taxable Salary = RS 1,67,000Note:
The proceed of an endowment policy is a capital receipt, so it will not to be included in income from salary.
=====================================
Q34
Solution:
Computation of Taxable Salary of Mr X
for the Assessment Year 2019-20
Salary = Rs 2,16,000
Entertainment Allowance = Rs 36,000
Perquisites:
Value of Rent Free House = Rs 39,400
Electricity Bill = Rs 6,000
Gardner = Rs 3,360
Value of Car = Rs 21,600
Free Lunch = Rs 2,000
[12000-200*50]
Gross Salary = Rs 3,24,360
Entertainment Allowance = Rs 36,000
Perquisites:
Value of Rent Free House = Rs 39,400
Electricity Bill = Rs 6,000
Gardner = Rs 3,360
Value of Car = Rs 21,600
Free Lunch = Rs 2,000
[12000-200*50]
Gross Salary = Rs 3,24,360
Note:
Value of Rent Free House;
15% of Salary = Rs 37,800
[216000+36000]
Add=10% of Furniture = Rs 1600
Value of Rent Free House = Rs 39,400
Value of Motor Car
[900*12+900*12]=Rs 21,600
Value of Rent Free House;
15% of Salary = Rs 37,800
[216000+36000]
Add=10% of Furniture = Rs 1600
Value of Rent Free House = Rs 39,400
Value of Motor Car
[900*12+900*12]=Rs 21,600
=====================================
Q35
Solution:
Computation of Taxable Salary of Mr X
for the Assessment Year 2019-20
Salary = Rs 1,26,000
Dearness Allowance = Rs 15,000
Bonus = Rs 3,500
Value of Rent Free House = Rs 13,550
Club Fees paid by the employer = Rs 4000
Excess contribution in R.P.F. = Rs 2,520
Medical Allowance = Rs 6,000
Gardner = Rs 3,000
Gross Salary = Rs 1,73,570
Less: Standard Deduction = Rs 40,000
Taxable Salary = Rs 1,33,750
Dearness Allowance = Rs 15,000
Bonus = Rs 3,500
Value of Rent Free House = Rs 13,550
Club Fees paid by the employer = Rs 4000
Excess contribution in R.P.F. = Rs 2,520
Medical Allowance = Rs 6,000
Gardner = Rs 3,000
Gross Salary = Rs 1,73,570
Less: Standard Deduction = Rs 40,000
Taxable Salary = Rs 1,33,750
Note:
Value of Rent Free House;
15% of Salary = Rs 13550
[126000+3500+6000]
=====================================
Value of Rent Free House;
15% of Salary = Rs 13550
[126000+3500+6000]
=====================================
Q36
Solution:
Computation of Taxable Salary of Mr P
for the Assessment Year 2019-20
Q. Ltd.
Salary [20,000*6] = Rs 120,000
Dearness Allowance [1600*6] = RS 9600
R.Ltd
Salary [25000*4] = Rs 100,000
Dearness Allowance [2500*4] = Rs 10,000
Transport Allowance [500*4] = Rs 2000
Bonus [110,000*10%] = Rs 11,000
Gross Salary = Rs 2,52,600
Salary [20,000*6] = Rs 120,000
Dearness Allowance [1600*6] = RS 9600
R.Ltd
Salary [25000*4] = Rs 100,000
Dearness Allowance [2500*4] = Rs 10,000
Transport Allowance [500*4] = Rs 2000
Bonus [110,000*10%] = Rs 11,000
Gross Salary = Rs 2,52,600
