[Income Under the Head Salaries, Problems and Solutions, Dibrugarh University Questions 2009 - 2019 Exam, Salary Practical Problems and Solutions]
INCOME UNDER THE HEAD
SALARIES
SOLVED PRACTICAL PROBLEMS (2009 TO 2018)
Direct Tax Law’2009
(General)
Q.N.1. Mr. X, Corporate manager (Sales) in Vodafone ltd. receives the following income during the year ending march, 31st, 2008:
a) Basic Salary 300000
b) Leave travel concession for proceeding on leave (actual expenditure on rail fare Rs. 11000) 10000
c) Tiffin allowance 4000
d) Re – imbursement of medical expenses incurred for his own treatment 31300
e) Besides, he enjoys the following perks:
f) Free unfurnished flat in Delhi (Rent paid by the company Rs. 86000)
g) The company provides two watchman (Salary Rs. 700 pm per person)
h) Free use of Maruti 800 car for official as well as personal purposes (log book was not maintained by the employer)
i) Free meal at the work place Rs 14700 (@ Rs. 70 per day for 210 days, amount is directly paid to the canteen by the company)
j) Interest free loan for purchasing home appliances (Amount Rs. 120000, date of taking loan march 1st, 2004. Amount outstanding between April 1st, 2007 to November 30th, 2007 Rs. 76000 and after November 30th, 2007: Rs. 50000). The SBI lending rate for similar loan on 1st April, 2007 was 15.25%.
Compute his taxable income from salary for the assessment year 2008 – 2009 from the above information.
Computation
of salary income of Mr. X for the Assessment Year (2018-2019)
|
Particulars |
Amount |
Amount |
|
a) Basic Salary b) Leave Travel Concession (Exempted
Upto Actual Expenditure) c) Tiffin Allowance d) Re-imbursement of Medical Expenses e) Perquisites: 1. Value of rent free house 15%
of salary (salary = 3,00,000+4,000) or
Rent paid by the company Whichever
is less 2.
Value of Car (Small car = 1,800*12) 3.
Free Meal [(70-50)*210] (Free meal is exempted upto Rs. 50 per day) 4.
Value of Interest free loan (76,000*15.25%*8/12+50,000*15.25%*4/12) 5.
Salary to watchman (700*2*12) |
45,600 86,000 |
3,00,000 Exempt 4,000 31,300 45,600 21,600 4,200 10,268 16,800 |
|
Gross Salary Less: Deduction U/S 16 Standard deduction u/s 16(ia) |
|
4,33,768 50,000 |
|
Net Salary |
|
3,83,768 |
Direct Tax Law 2010
(General)
Q.N.2. Mr. X has the
following income during the previous year 2008-09:
Basic
salary: Rs.1, 20,000.
Dearness
allowance (forming part of salary)—Rs 24,000
Medical
allowance (actual expenditure Rs 4,000)—Rs, 6,000
Educational
allowance (for three children)—Rs 6,000
Rent
free house in Delhi for which the employer company paid Rs 5,000 p.m. as rent.
The house was furnished with rented furniture. The rent of the furniture is Rs
300 p.m.
The
company provided two servants and one watchman. The company paid Rs 300 to each
of them per month.
The
company paid Rs 2,500 on his training programme.
Mr.
X paid his professional tax of Rs 2,400 and deposited Rs 20,000 as LIP on his
own life and Rs 15,000 for NSC.
Compute
his taxable income for the assessment year 2009-10.
Computation
of salary income of Mr. X for the Assessment Year (2018-2019)
|
Particulars |
Amount |
Amount |
|
a) Basic Salary b)
Dearness Allowance c)
Medical Allowance (Fully Taxable irrespective of actual expenditure) d)
Education Allowance Less:
Exempted @ Rs. 100 per month per child
for a maximum of two children) e)
Value of Rent free house 15% of Salary (Salary =
1,20,000+24,000+6,000+3,600 = 1,53,600) Or Actual rent paid by the
company Whichever is less Add:
Hire Charges of Furniture f) Salary of Servants
(300*2*12) g) Salary of watchman (300*1*12) h) Expenses on Training Programme
(Fully exempted since it is for official purpose) |
6,000 2,400 23,040 60,000 23,040 3,600 |
1,20,000 24,000 6,000 3,600 26,640 7,200 3,600 Exempt |
|
Gross Salary Less: Deduction U/S 16 (ia) Standard Deduction (iii) Professional Tax Paid by employee |
|
1,91,040 50,000 2,400 |
|
Income from Salary Less: Deduction U/S 80C a) LIP = 20,000 b) NSC= 15,000 |
|
1,38,640 35,000 |
|
Taxable Income |
|
1,03,640 |
Direct Tax Law 2011
(General)
Q.N.3. From the following information, compute the taxable income for assessment year 2010-2011 under the head “Salaries” of Mr. X who is an employee of a transport company:
Salary @ Rs. 10000 p.m.
Arrears of salary Rs. 5000
DA @ Rs. 4000 p.m.
Employer is paying insurance premium of Rs. 1000 pa on his life.
Bonus Rs. 15000
Education allowance for his two children @ Rs. 300 p.m.
Cash gift Rs. 20000
City compensatory allowance @ Rs. 1000 p.m.
Medical expenses paid by employer Rs. 18000
He contributes 15% of his salary to a recognised provident fund and his employer also contribute the same.
He is given lunch allowance @ Rs. 100 for 250 days during the previous year.
He is provided with a mobile phone, the bill of which is paid by the company Rs. 6000.
Computation of salary
income of Mr. X for the Assessment Year 2018-19
|
Particulars |
Amount |
Amount |
|
Basic
Salary @ Rs. 10,000 p.m. Arrears
of salary D.A.
@ Rs. 4,000 p.m. Life
Insurance Premium paid by employer (Perquisite) Bonus Children
Education allowance Less:
Exempted @ Rs. 100 per month per child for a maximum of two children Cash
gift – Fully taxable City
compensatory allowance Medical
expenses paid by employer Employer’s
contribution in employee’s RPF @ 15% Less:
Exempted @ 12% of Salaries (Salaries = 1,20,000) Lunch
allowance @ Rs. 100 x 250 [Fully Taxable] Mobile
bill of employee paid by employer |
3,600 2,400 18,000 14,400 |
1,20,000 5,000 48,000 1,000 15,000 1,200 20,000 12,000 18,000 3,600 25,000 Exempted |
|
Gross Salary Less: Deduction u/s 16 (ia) Standard Deduction |
|
2,68,800 50,000 |
|
Income from Salary |
|
2,18,800 |
Direct Tax Law 2012
(General)
Q.N.4. Mr. X is a
manager of a textile company at japer since 1986. He submits the following
particulars of his income for the financial year 2010 – 2011:
a) Basic salary 240000per
b) Dearness allowance 5000
p.m. (200 p.m. enters into retirement benefit)
c) Education allowance for two
children @ 150 p.m. per child
d) Commission on sales @1% of
turnover of 1000000
e) Travelling allowance 30000.
The entire amount was spent by him for official purpose
f) He was given cloth worth 1000
by his employer free of cost
g) He resides in the flat of the
company at Jaipur (26 Lacs population)
h) A cook and a watchman have
been provided by the company at the bunglow who are paid @ 400 each p.m.
i)
He
has been provided with a motor car of 1.8 ltrs engine capacity for his official
and personal use. All expenses are borne by employer of the car.
j)
Employer’s
contribution to RPF is 40000 and interest credited to RPF @ 13% amounted to
16250.
k) His own contribution to RPF
40000
l)
Rent
of house recovered from his salary 1500 p.m.
Compute the income
from salary for the assessment year 2011 – 2012.
Computation
of salary of Mr. X for the Assessment Year (2018-2019)
|
Particulars |
Amount |
Amount |
|
a) Basic Salary b)
Dearness Allowance c)
Education Allowance (150*12*2) Less:
Exempted @ Rs. 100 per month per child for a maximum of two children d)
Commission on Turnover (10,00,000*1%) e)
Travelling Allowance (Fully exempted since fully spent for official duties) f)
Free Cloth (It is exempted upto Rs. 5,000) g)
Value of House at concessional rate 15% of Salary (Salary =
2,40,000+2,400+1,200+10,000=2,53,600) Less: Rent recovered from
employee @ 1,500 per month h) Salary of Cook i) Salary of Watchman j) Value of Car (2,400*12) k) Employer’s Contribution to RPF Less: Exempted upto 12% of salary (Salary
=2,40,000+2,400+10,000) l) Interest on RPF @ 13% Less: Exempted up 9.5% (16,250*9.5/13) |
3,600 2,400 38,040 18,000 40,000 30,288 16,250 11,875 |
2,40,000 60,000 1,200 10,000 Exempt Exempt 20,040 4,800 4,800 28,800 9,712 4,375 |
|
Gross Salary Less: Deduction U/S 16 (ia) Standard deduction |
|
3,83,727 50,000 |
|
Income from Salary |
|
3,33,727 |
2014 (General -New
Course)
Q.N.5. From the following information, compute
the taxable income from salary of Mr.X for the AY 13-14
(i)
Salary @10000 pm
(ii)
Dearness
allowance (forming part of salary)@5000 p.m.
(iii)
Education
allowance for his two children@250 p.m.
(iv)
He resided in the
flat of the company at Guwahati (population 30 lakhs)
(v)
Rent of the house
recovered from his salary @ 750 p.m.
(vi)
He has been
provided with a motor car of 1.6 litre engine capacity for his official and
personal use. All expenses of the car are born by the employer
(vii) Employer contribution to RPF is Rs. 25000 and
interest credited to RPF@11% amounted to Rs. 16500.
(viii) A cook and a watchman have been provided by
the employer at his residence and they paid @500 each p.m.
(ix)
Mr. X paid Rs. 3000
for his professional tax.
Ans: Computation of Income under the
salaries of Mr. X for the AY 2013 - 14
|
Particulars |
Amount |
Amount |
|
1. Basic
Salary 2. Dearness
Allowance 3. Children
Education Allowance Less:
Exempted upto Rs. 100 per month per child for a maximum of 2 4. Value of
rent free house 15% of salary
(salary = 1,20,000 +60,000 + 600) Less: Rent recovered from employee 5. Value of
Car (1,800 * 12) 6. Salary of
cook (500*12) 7. Salary of
watchman (500*12) 8. Employer’s
contribution to RPF Less: exempted
upto 12% of salary (Salary = 1,20,00+60,000) 9. Interest
on RPF Less:
Exempted upto 9.5% (16,500*9.5/11) |
3,000 2,400 27,090 9,000 25,000 21,600 16,500 14,250 |
1,20,000 60,000 600 18,090 21,600 6,000 6,000 3,400 2,250 |
|
Gross Salary Less: Deduction
up Sec. 16 (ia) Standard
deduction (iii)
Professional tax paid by the employee |
|
2,37,940 50,000 3,000 |
|
Net Salary |
|
1,84,940 |
2016
(New Course)
Q.N.6. From the
following information of Mr. Ashok, compute his taxable income for the
assessment year, 2015-16: 14
a) Basic salary @ Rs. 20,000 p.m.
b) Arrears of salary Rs. 10,000.
c) Dearness allowance @ Rs. 8,000 p.m.
d) Employer is paying insurance premium of Rs. 20,000 p.a. on his life.
e) Bonus Rs. 30,000.
f) Education allowance for his two children @ Rs. 600 p.m.
g) Cash gift Rs. 40,000.
h) City compensatory allowance @ Rs. 2,000 p.m.
i) Medical expenses paid by employer Rs. 18,000.
j) He contributes 15% of his salary to a recognized provident fund and his employer also contributes the same.
k) He is provided with a mobile phone, the bill of which is paid by the company Rs. 6,000.
l) He is given lunch allowance @ Rs. 100 per day for 250 days during the previous year.
Ans: Computation of Income under the
salaries of Mr. Ashok for the AY 2015 - 2016
|
Particulars |
Amount |
Amount |
|
1. Basic
Salary 2. Dearness
Allowance 3. Children
Education Allowance Less:
Exempted upto Rs. 100 per month per child for a maximum of 2 4. Bonus 5. Cash Gift
(Fully Taxable) 6. CCA 7. Arrear of
salary 8. Medical
expenses reimbursed 9. Employer’s
contribution to RPF (15% of basic i.e. 2,40,000) Less:
exempted upto 12% of salary 10. Mobile
phone expenses 11. Lunch
allowance is fully taxable (Free meal is exempted upto Rs. 50) |
7,200 2,400 36,000 28,800 |
2,40,000 96,000 4,800 30,000 40,000 24,000 10,000 18,000 7,200 Exempt 25,000 |
|
Gross Salary Less:
Deduction u/s 16 (ia) Standard
deduction |
|
4,95,000 50,000 |
|
Income under the head Salaries Less:
Deduction under sec. 80 C (Maximum deduction Rs. 1,50,000) a) LIP b)
Contribution to RPF |
20,000 36,000 |
4,45,000 56,000 |
|
Taxable income |
|
3,89,000 |
2017 (New course)
Q.N.7. Mr. X has the following Income
during the previous year, 2015 – 16:
a) Basic salary Rs. 2,60,000
b) Dearness allowance (forming part of salary) Rs. 40,000
c) Education allowance (for three children) Rs. 6,000
d) Rent paid for a residential house at Guwahati Rs. 60,000
e) House rent allowance Rs. 48,000
f) He has been provided with motorcar of 1.8 litre engine capacity for the official and personal use. All expenses of the motorcar are borne by the employer.
g) He contributes 14% of his salary to a recognized provident fund and his employer also contributes the same amount.
h) Interest credited to recognized provident fund @ 13% amounted to Rs. 13,000
i) Medical expenses paid by his employer Rs. 25,000
j) Mr. X paid Rs. 2,500 for his professional tax.
Compute the Income from salary for the Assessment year, 2016 – 17.
Computation of salary
income for the Assessment Year 2018-19
|
Particulars |
Amount |
Amount |
|
1. Basic Salary 2. Dearness Allowance 3. Children Education allowance Less: Exempted @ Rs. 100 per month per child for a maximum of
two children 4. House Rent Allowance Less: Exempted upto minimum of the following three points a) Actual HRA b) 40% of Salary
(Salary=2,60,000+40,000=3,00,000) c) Rent paid in excess of 10% of salary
(60,000 – 10% of salary) Exempted 5. Value of Motor car (2,400*12) 6. Medical Expenses 7. Employer’s contribution in employee’s RPF @ 14% Less: Exempted @ 12% of Salaries (Salaries = 2,60,000+40,000) 8. Interest to RPF @ 13% Less: Exempted upto @ 9.5% |
6,000 2,400 48,000 48,000 1,20,000 30,000 30,000 42,000 36,000 13,000 9,500 |
2,60,000 40,000 3,600 18,000 28,800 25,000 6,000 3,500 |
|
Gross Salary Less: Deduction u/s 16 (ia) Standard Deduction (iii) Professional Tax paid |
|
3,84,900 50,000 2,500 |
|
Income from Salary |
|
3,35,400 |
2017 (Old Course)
Q.N.8. Mr. X has the following Income
during the previous year, 2015 – 16:
a) Basic salary Rs. 1,50,000
b) Dearness allowance (forming part of salary) Rs. 50,000
c) Medical allowance (actual expenditure Rs. 10,000) Rs. 16,000
d) Educational allowance (for two children) Rs. 4,000
e) He has been provided with motorcar of 1.6 litre engine capacity along with a driver for the official and personal use. All expenses of the motorcar are borne by the employer.
f) He contributes 15% of his salary to a recognized provident fund and his employer also contributes the same amount.
g) The Company paid Rs. 6,000 on his training programme.
h) He was given cloth worth Rs. 4,000 by his employer free of cost.
i) A cook and a watchman have been provided by the company who are paid @ Rs. 600 each per month.
Compute the Income from salary for the Assessment year, 2016 – 17. 14
Computation of salary
income for the Assessment Year 2018-19
|
Particulars |
Amount |
Amount |
|
1. Basic Salary 2. Dearness Allowance 3. Medical Allowance (Fully taxable irrespective of actual
expenditure) 4. Children Education allowance Less: Exempted @ Rs. 100 per month per child for a maximum of
two children 5. Value of Motor car (1,800*12) Add: Salary to driver (900*12) 6. Training programme 7. Free cloth 8. Salary to watchman 9. Salary to cook 10. Employer’s contribution to RPF @ 15% of salary Less: Exempted upto 12% of salary (Salary = 1,50,000+50,000) |
4,000 2,400 21,600 10,800 30,000 24,000 |
1,50,000 50,000 16,000 1,600 32,400 Exempt Exempt 7,200 7,200 6,000 |
|
Gross Salary Less: Deduction u/s 16 (ia) Standard Deduction |
|
2,70,400 50,000 |
|
Income from Salary |
|
2,20,400 |
2018 (New Course)
Q.N.9.
Mr. X is an employee of Ranchi (population 15 lakhs) based on company. He provides
the following particulars of his salary income:
1) Basic salary – Rs. 12,000 per month.
2) Profit bonus – Rs. 12,000.
3) Commission on turnover achieved by Mr. X – Rs. 42,000.
4) Entertainment allowance – Rs. 2,000 per month.
5) Club facility – Rs. 6,000.
6) Transport allowance – Rs. 1,800 per month.
7) Free use of car of more than 1.6 litre capacity for both personal and employment purposes; expenses are met by employer.
8) Rent-free house provided by employer; lease rent paid by employer – Rs. 6,000 per month.
9) Free education facility for three children of the employee (bills issued in the name of employer) – Rs. 22,500.
10) Gas, water and electricity bills issued in the name of the employee but paid by employer – Rs. 16,800.
Compute income under the head salary for the Assessment Year, 2017-18. 14
Computation of salary
income of Mr. X for the Assessment year 2018-19
|
Particulars |
Rs. |
Rs. |
|
1.
Salary 2.
Profit Bonus 3.
Commission 4.
Entertainment Allowance 5.
Club facility – Taxable 6.
Transport Allowance (exemption available for handicapped employees only) 7.
Car Perquisite – Big car @ Rs. 2,400 p.m. 8.
Education facility for children 9.
Gas, water and electricity bill paid by employer 10.
Value of rent free house; 15% of
employee’s salary i.e. Rs. 33,660 or rent paid by employer Rs. 72,000,
whichever is less (Salary
for this purpose [1,44,000 + 12,000 +
42,000 + 24,000 + 21,600 = 22,43,600]) |
|
1,44,000 12,000 42,000 24,000 6,000 21,600 28,800 22,500 16,800 36,540 |
|
Gross Salaries Less: Deduction u/s 16 (ia) Standard deduction |
|
3,54,240 50,000 |
|
Income from Salaries |
|
3,04,240 |
Note. The perk of car and club facility both are taxable as FBT has been abolished.
2018 (Old course)
Q.N.9.
From the particulars given below, compute the gross salary of Mr. X for the
Assessment Year, 2017 – 18:
1) Salary – Rs. 1,48,000.
2) Bonus – Rs. 12,000.
3) Free gas, electricity, water, etc. (actual bills paid by company) – Rs. 6,000.
4) Furnished flat provided to the employee at Kanpur (population above 25 lakhs) for which actual rent paid by the company – Rs. 78,000.
5) The employee pays rent @ Rs. 1,000 p.m. to the company.
6) Furniture at cost (including television, fridge and air-conditioner) – Rs. 50,000.
Computation of salary
income of Mr. X for the Assessment year 2018-19
|
Particulars |
Rs. |
Rs. |
|
1.
Salary 2.
Bonus 3.
Value of rent free house; 15%
of employee’s salary (Salary for this purpose = 1,48,000 + 12,000 =1,60,000) Or
Rent paid by employer whichever
is less Add:
10% of cost of furniture (50,000*10%) Less:
Rent recovered from employee 4.
Free gas, electricity bill paid by the company |
24,000 78,000 24,000 5,000 29,000 12,000 |
1,48,000 12,000 17,000 6,000 |
|
Gross Salaries Less: Deduction u/s 16 (ia) Standard deduction |
|
1,83,000 50,000 |
|
Income from Salaries |
|
1,33,000 |
Income Tax 2009
(Speciality)
Q.N.10. Mr. Pratap Singh is a production Manager of an
Industrial unit at Mumbai. The particulars of his salary income areas under:
|
Particulars |
Amount |
|
Basic salary Dearness allowance(given under the terms of employment) Entertainment allowance Medical allowance House Rent allowance Rent paid for the house |
15,000 p.m 5000p.m 1000 p.m 500 p.m. 4000 p.m. 5000 p.m. |
Car
of 1.2 Lt. Capacities provided by employer meets expenses of car. He and his
employer (each) contribute 15% of salary to R.P.F.
Mr.
Singh had taken interest free loan of Rs. 15,000 to purchase Washing Machine.
Compute income under the head salary for the assessment year 2008—2009.
Computation of salary
income of Mr. M for the assessment year (2018-2019)
|
Particulars |
Amount |
Amount |
|
Salary @ Rs. 15,000 p.m. D.A. [as per terms of employment] @ Rs. 5,000 p.m. Entertainment allowance Medical allowance Employer’s contribution to RPF @ 15% of salary of 2,40,000 Less: 12% of salary [(Salary = 1,80,000+60,000=2,40,000 x 12%] House Rent Allowance Less: Exempted upto least of following
a) Actual HRA received b) Rent paid – 10% of salary [60,000 – 24,000] c) 50% of 2,40,000 Exempted Car perk taxable @ Rs. 1,800 p.m. being a small car (1,800*12) |
36,000 28,800 48,000 48,000 36,000 1,20,000 36,000 |
1,80,000 60,000 12,000 6,000 7,200 12,000 21,600 |
|
Gross Salaries Less: Deduction U/S 16 (ia) Standard deduction |
|
2,98,800 50,000 |
|
Salary Income |
|
2,48,800 |
Note. (1) Car provided by employer is a taxable perk in the hands of the specified employee. (2) Since the amount of loan from employer is less than Rs. 20,000, so it is fully exempted.
Income Tax 2010
(Speciality)
Q.N.11.
Mr. Pranjal working as a Manager (sales) with HL Ltd. provides the following
information for the year ending March 31, 2009:
Basic Salary—Rs 1, 44,000
DA (50% of it is meant for retirement benefit Rs 1, 44,000)
Commission as a percentage of turnover of the employer company—0.5%
Turnover of the company—Rs 50, 00,000
Bonus—Rs 30,000
Gratuity (received in service)—Rs 30,000
Own contribution towards RPF—Rs 25,000
Employers contribution towards RPF—20% of basic
Interest contribution in the RPF @ 15%--Rs 15,000
Gold ring worth Rs 10,000 was given by employer on his 20th wedding anniversary
He received interest Rs 5,860 on bank fixed deposit, dividend of Rs 1,260 from shares of Indian companies and interest of Rs 7,540 from the debenture of Indian companies. Made payment by cheques of Rs 15,370 towards premium on LIP and Rs 12,500 for Mediclaim insurance policy. He invested in 6 years NSC Rs 30,000, FDR of SBI for 7 years Rs 50,000. He has donated Rs 11,000 to an institution approved under section 80G and of Rs 5,100 to Prime Minister’s national relief fund during the year.
Compute
his Income from salary and tax payable thereon for the assessment year 2009-10.
Computation
of salary of Mr. X for the Assessment Year (2018-2019)
|
Particulars |
Amount |
Amount |
|
a) Basic Salary b)
Dearness Allowance (50% enters into pay for retirement benefit) c)
Commission on turnover (50, 00,000*0.5%) d)
Bonus e)
Gratuity received while in service (Fully taxable if received during service) f) Employer’s Contribution to RPF (20% of basic salary) Less: Exempted upto 12% of salary (Salary
=1,44,000+72,000+25,000) g) Interest on RPF @ 15% Less:
Exempted up 9.5% (15,000*9.5/15) h)
Gold Ring (Gift in kind exempted upto Rs. 5000) |
28,800 28,800 15,000 9,500 |
1,44,000 1,44,000 25,000 30,000 30,000 Exempt 5,500 5,000 |
|
Gross Salary Less: Deduction U/S 16 (ia) Standard Deduction |
|
3,83,500 50,000 |
|
Income from Salary |
|
3,33,500 |
Income Tax 2012
(Speciality)
Q.N.12.
Following are the particulars of salary of Mr. Borkakoty, an employee of ONGCL
of Ahmedabad (Population exceeding 25 lakhs):
a. Basic salary 60000 p.m.
b. DA 10000 p.m. (50% forms part
of salary)
c. Transport allowance 4000 p.m.
d. Bonus 20000
e. Commission 80000 on turnover
f.
Telephone
bill of his residence paid by employer 20000
g. Amount paid by employee for
free supply of gas and electricity at residence 36000
h. He got a loan of 1000000 from
his employer at a nominal rate of interest of 3.25% for the construction of his
house. SBI lending rate as on 1-4-2010 at 8%.
i.
He
is paid house rent allowance of 10000 p.m. till 31st July, 2010
and thereafter he is given a rent-free house got by his company on a monthly
rent of 20000. Cost of furniture 100000. Before shifting to rent free house he
was paying a rent of 8000 p.m.
j.
Leave
travel concession 40000
k. He is given a free lunch
worth 100 per day
l.
Both
he and his employer are contributing 10000 p.m. each towards recognised
provident fund (RPF)
Find
out Mr. Borkakoty’s salary income for the assessment year 2011 – 2012.
Computation
of salary of Mr. X for the Assessment Year (2018-2019)
|
Particulars |
Amount |
Amount |
|
a) Basic Salary b)
Dearness Allowance (50% enters into pay for retirement benefit) c)
Transport Allowance d)
Commission on turnover e)
Bonus f)
Telephone bill-reimbursed g)
Gas and Electricity facility h)
Interest on loan at concessional rate
(10,00,000*4.75%) i)
House Rent Allowance (4 months only) Less:
Exempted upto minimum of the following three points: a)
Actual HRA b)
40% of Salaries [(7,20,000+60,000+80,000)*40%*4/12] c)
Rent paid in excess of 10% of salaries (32,000-8,60,000*10%*4/12) j)
Value of Rent free house (8 months) 15% of salary [(salary =
7,20,000+60,000+48,000+80,000+20,000)*8/12] Or Hire charges (20,000*8) Whichever is less Add: 10% of cost of
furniture (1,00,000*10%*8/12) k)
Leave Travel Concession (Fully taxable) l) Free Lunch [(100-50)*250](ASSUMING YEARLY WORKING DAYS 250) m)
Employer’s Contribution to RPF Less:
Exempted upto 12% of salary
[(7,20,000+60,000+80,000)*12%] |
40,000 40,000 1,14,667 28,667 92,800 1,60,000 92,800 6,667 1,20,000 1,03,200 |
7,20,000 1,20,000 48,000 80,000 20,000 Exempt 36,000 47,500 11,333 99,467 40,000 12,500 16,800 |
|
Gross Salary Less: Deduction U/S 16 (ia) Standard deduction |
|
12,51,600 50,000 |
|
Income from Salary |
|
12,01,600 |
Income Tax 2013 (Speciality)
Q.N.13. From the
following information, compute the taxable income for the assessment year 2013
– 14 under the head ‘salaries’ of Mr. R who is an employee of a tea company at
Guwahati:
12
1. Basic Salary Rs. 15,000 p.m.
2. DA @ Rs. 5,000 p.m.
3. Employer is paying insurance premium of Rs.
15,000 p.a. on R’s life.
4. He gets house rent allowance @ Rs. 2,000 p.m.
He pays a rent of Rs. 2,500 p.m.
5. He is provided with a car of 1.5 lt. capacity
engine with driver which was used partly for official and partly for private
purposes.
6. Education allowance for grandchild @ Rs. 400
p.m.
7. Employer’s contribution to recognized
provident fund is @ 20% of salary and the interest credited to this fund at 14%
rate amounted to Rs. 14,000.
8. Medical expenses paid by employer Rs. 15,000.
9. He took advance salary of 2 months.
10. The company provided him the facility of a
gardener and a cook, each of whom is being paid a salary of Rs. 500 per month.
The company also paid Rs. 5,000 for his electric bills and Rs. 3,000 for his
water bills.
11. The employer spent Rs. 2,500 on his refresher
course.
12. Profession tax paid by Mr. R is Rs. 2,500.
Computation
of salary of Mr. X for the Assessment Year (2018-2019)
|
Particulars |
Amount |
Amount |
|
a) Basic Salary b)
Dearness Allowance c)
Education allowance for grand child d)
House Rent Allowance Less:
Exempted upto minimum of the following three points: a)
Actual HRA b)
40% of Salaries (1,80,000*40%) c)
Rent paid in excess of 10% of salaries (30,000-18,000) e)
Employer’s Contribution to RPF (1,80,000*20%) Less:
Exempted upto 12% of salary (1,80,000*12%) f)
Interest on RPF Less:
Exempted upto 9.5% (14,000*9.5/14) g)
Medical expenses paid by employer h)
Advance salary i)
Salary of gardener (500*12) j)
Salary of Cook (500*12) k)
Electric bill of employee l)
Water bill of employee m)
Expenses on training programme n)
Life insurance premium paid by the employer o)
Value of car (1,800*12) Add:
Driver’s salary (900*12) |
24,000 24,000 72,000 12,000 36,000 21,600 14,000 9,500 21,600 10,800 |
1,80,000 60,000 4,800 12,000 14,400 4,500 15,000 30,000 6,000 6,000 5,000 3,000 Nil 15,000 32,400 |
|
Gross Salary Less: Deduction U/S 16 (ia) Standard deduction |
|
3,88,100 50,000 |
|
Income from Salary |
|
3,33,100 |
Income Tax 2014
(Speciality)
Q.N.14. From the following information compute
the taxable income under the head ‘Salaries’ for the assessment year 2014 – 15
of Mr. P who is a central government employee at Dibrugarh:
14
a) Basic salary – Rs. 30,000 p.m.
b) DA (enters) – 60% of salary.
c) Transport allowance for
commuting from home to office – Rs. 2,000 p.m.
d) Deputation allowance (for two
months) – Rs. 3,000 p.m.
e) Education allowance for two
children at Rs. 250 p.m. per child and hostel allowance for two children at Rs.
450 p.m. per child.
f) He has been provided with a
rent free accommodation. The license fee for the accommodation has been fixed
at Rs. 2,000 p.m. The government has also provided him with furniture items
costing Rs. 1,00,000 (w.d.v. Rs. 75,000) for his personal use.
g) He has been provided with the
facility of a servant and a watchman with effect from 01.10.2013 and the
government is paying Rs. 3,000 p.m. to each of them.
h) A laptop costing Rs. 45,000
has been given to him for his official as well as personal purposes.
i)
On
01.04.2013, he took a loan of Rs. 1,50,000 from his employer to buy a car at a
concessional rate of interest of 8% p.a. SBI rate of interest as on 01.04.2013
is 14% p.a.
j)
He
paid professional tax of Rs. 3,000 p.a.
Computation of salary of Mr. X for the
Assessment Year (2018-2019)
|
Particulars |
Amount |
Amount |
|
a) Basic Salary b)
Dearness Allowance (60% of salary) c)
Children education allowance (250*12*2) Less:
Exempted @ 100 per month for a maximum of two children d)
Hostel expenditure allowance (450*12*2) Less:
Exempted @ 300 per month for a maximum of two children e)
Travelling allowance f)
Deputation allowance g)
Use of laptop and computers h)
Salary of servants i)
Salary of watchman j)
Value of rent free house: License
fees of the house Add:
10% of cost of furniture k)
Interest free loan (1,50,000*6%) |
6,000 2,400 10,800 7,200 24,000 10,000 |
3,60,000 2,16,000 3,600 3,600 24,000 6,000 Exempt 18,000 18,000 34,000 9,000 |
|
Gross Salary Less: Deduction U/S 16 (ia) Standard deduction (iii) Professional tax paid by employee |
|
6,92,200 50,000 3000 |
|
Income from Salary |
|
6,39,200 |
Income Tax 2015
(Speciality)
Q.N.15. From the
following information, compute the taxable income for the assessment year 2014
– 15 under the head ‘Salaries’ of Shri Krishna who is working at Guwahati:
14
|
(i) Basis salary – Rs. 20,000 p.m. (ii) Dearness allowance – Rs. 6,000 p.m. (iii) He gets house rent allowance @ 3,000
p.m. He pays a rent of Rs. 4,000 p.m. (iv) The employer provided him the facility
of a gardener and a cook, each of whom is being paid a salary of Rs. 600 p.m. (v) He is provided with a motor car of 1.8
ltrs. capacity engine with a driver which was used partly for official
purpose and partly for private. (vi) Employer’s contribution to a recognized
provident fund is @ 15% of salary and interest credited to this fund @ 13%
amounted to Rs. 13,000. (vii) Medical expenses paid by employer is
Rs. 20,000 for medical treatment in a private hospital. (viii) He took an advance salary for two
months. (ix) A lunch allowance @ Rs. 100 per day was
given for 300 days during the previous year. (x) He paid professional tax of Rs. 3,500
per annum. |
Computation
of salary of Mr. X for the Assessment Year (2018-2019)
|
Particulars |
Amount |
Amount |
|
a) Basic Salary b)
Dearness Allowance c)
Lunch Allowance (300*100) d)
Advance salary e)
House Rent Allowance Less:
Exempted upto minimum of the following three points: a)
Actual HRA b)
40% of Salaries (Salaries = 2,40,000) c)
Rent paid in excess of 10% of salaries (48,000-24,000) f)
Employer’s Contribution to RPF Less:
Exempted upto 12% of salary
[2,40,000*12%] g)
Interest on RPF Less:
Exempted upto 9.5% (13,000*9.5/13) h)
Salary of gardener (600*12) i)
Salary of cook (600*12) j)
Value of car (2,400*12) Add:
Driver’s salary (900*12) k)
Reimbursement of medical expenses |
36,000 36,000 96,000 24,000 36,000 28,800 13,000 9,500 28,800 10,800 |
2,40,000 72,000 30,000 40,000 12,000 7,200 3,500 7,200 7,200 39,600 20,000 |
|
Gross Salary Less: Deduction U/S 16 (ia) Standard deduction (iii) Professional tax |
|
4,78,700 50,000 3,500 |
|
Income from Salary |
|
4,25,200 |
Income Tax 2016
(Speciality- New Course)
Q.N.16.
Shri Hari is an employee of a Guwahati based company. He provides the following
particulars of his salary income:
Basic
Salary – Rs. 15,000/- per month.
Bonus –
Rs. 15,000/-
Commission
on turnover achieved – Rs. 40,000/-
Club
facility – Rs. 7,000/-
Rent-free
house provided for employer. Lease rent paid by employer – Rs. 7,200/-
Transport
allowance – Rs. 2,000 per month.
Free
education facility of three children (bills issued in the name of employer) –
Rs. 24,000/-
Interest
credited to recognized provident fund @ 12% amounted to Rs. 24,000/-
Free use
of motorcar of 1.8. It capacity for both official and personal purposes –
expenses are met by employer.
He paid –
Rs. 3,000/- as professional tax.
Compute
Shri Hari’s income under the head ‘income from salary’ for the assessment year,
2016-17. 14
Computation
of salary of Mr. X for the Assessment Year (2018-2019)
|
Particulars |
Amount |
Amount |
|
a) Basic Salary b)
Bonus c)
Commission on turnover d)
Transport Allowance e)
Club facility f)
Free education g)
Value of car (2,400*12) j)
Value of Rent free house (8 months) 15% of salary [salary =
1,80,000+15,000+40,000+24,000= 2,59,000] Or Hire
charges (Lease rent or rent) Whichever is
less Interest
on RPF @ 12% Less:
Exempted @9.5% (24,000*9.5/12) |
38,850 7,200 7,200 24,000 19,000 |
1,80,000 15,000 40,000 24,000 7,000 24,000 28,800 7,200 5,000 |
|
Gross Salary Less: Deduction U/S 16 (ia) Standard deduction (iii) Professional tax paid |
|
3,31,000 50,000 3,000 |
|
Income from Salary |
|
2,78,000 |
Or
Income Tax 2016
(Speciality- Old Course)
Q.N. 17. From the following information,
compute the taxable income from salary of Shri Krishna for the assessment year
2016-17:
Basic
Salary – Rs. 2,50,000/-
Dearness
allowance – Rs. 50,000/- (enters into retirement benefit)
Rent paid
for a residential house at Tinsukia – Rs. 72,000/-
House Rent
allowance received by him – Rs. 68,000/-
Education
allowance for two children – Rs. 5,000/-
Medical
expenses paid by the employer – Rs. 24,000/-
He
contributes 15% of his salary to a recognized provident fund to his employer
who also contributes an equal amount.
Interest
credited to recognized provident fund @ 11% amounted to Rs. 13,530.
He is
given a free lunch worth Rs. 200/- per day.
He pays
Rs. 2,500/- as professional tax. 14
Computation
of salary of Mr. X for the Assessment Year (2018-2019)
|
Particulars |
Amount |
Amount |
|
a) Basic Salary b)
Dearness Allowance c)
House Rent Allowance Less:
Exempted upto minimum of the following three points: a)
Actual HRA b)
40% of Salaries (Salaries = 2,50,000+50,000=3,00,000) c)
Rent paid in excess of 10% of salaries (72,000-30,000) d)
Education allowance Less:
Exempted upto Rs. 100 p.m. per child for a maximum of 2 children f)
Employer’s Contribution to RPF Less:
Exempted upto 12% of salary
[3,00,000*12%] g)
Interest on RPF Less:
Exempted upto 9.5% (13,000*9.5/13) Free
lunch [(200-50)*250] (Assuming 250 working days during previous year) k)
Reimbursement of medical expenses |
68,000 68,000 1,20,000 42,000 5,000 2,400 45,000 36,000 13,530 11,685 |
2,50,000 50,000 26,000 2,600 9,000 1,845 37,500 24,000 |
|
Gross Salary Less: Deduction U/S 16 (ia) Standard Deduction (iii) Professional tax paid |
|
4,00,945 50,000 2,500 |
|
Income from Salary |
|
3,48,445 |
Income Tax 2017
(Speciality-New course)
Q.N.18.
Shri Ratan, a manager of a Guwahati based Company. He submits the following
particulars of his salary Income:
1) Basic salary – Rs. 14,000 per month.
2) Dearness Allowance – Rs. 8,400 per month (Rs. 1,300 per month enters into retirement benefit)
3) Education allowance for two children at Rs. 6,000 p.a. per child Rs. 3,000 and hostel allowance for two children at Rs. 350 p.m. per child.
4) Commission – Rs. 25,100.
5) Leave encashment – Rs. 10,000.
6) Employer’s contribution to RPF – Rs. 25,200.
7) Travelling allowance for his official tours Rs. 20,000. Actual expenditure on tour amounted to Rs. 17,000.
8) Interest credited to RPF account in the previous year @ 10% amounted to Rs. 8,000.
9) He resides in the Bungalow of the company. Its fair rent is Rs. 6,500 p.m. The company deduct Rs. 1,200 p.m. from salary as rent of the Bungalow.
10) He paid professional tax of Rs. 250 per month.
Compute Shri Ratan’s income under the head ‘income from salary’ for the assessment year, 2017-18. 14
Computation
of salary of Mr. X for the Assessment Year (2018-2019)
|
Particulars |
Amount |
Amount |
|
a) Basic Salary b)
Dearness Allowance c)
Education Allowance Less:
Exempted @ Rs. 100 per month per child for a maximum of two children d)
Hostel Expenditure allowance Less:
Exempted @ Rs. 300 per month per child for a maximum of two children e)
Commission on Turnover f)
Leave Encashment during service is fully taxable g)
Travelling allowance Less:
Actual expenses g)
Value of House at concessional rate 10% of Salary (Salary =
1,68,000+15,600+3,600+1,200+25,100+3,000=2,16,500) Less: Rent recovered from
employee @ 1,200 per month k) Employer’s Contribution to RPF Less: Exempted upto 12% of salary (Salary
=1,68,000+15,600+25,100) l) Interest on RPF @ 13% Less: Exempted up 9.5% (16,250*9.5/13) |
6,000 2,400 8,400 7,200 20,000 17,000 21,650 14,400 25,200 25,044 8,000 7,600 |
1,68,000 1,00,800 3,600 1,200 25,100 10,000 3,000 7,250 156 400 |
|
Gross Salary Less: Deduction U/S 16 (ia) Standard deduction (iii) Professional tax paid |
|
3,19,506 50,000 3,000 |
|
Income from Salary |
|
2,66,506 |
Income Tax 2017
(Speciality-Old Course)
Q.N.19.
Shri Swadhin Jyoti originally hail from Assam is working at Pune in a company.
He provides the following information about his salary income:
1) Basic salary @ Rs. 20,000 p.m.
2) Dearness allowance @ Rs. 3,000 p.m.
3) City compensatory allowance @ Rs. 1,000 p.m.
4) Entertainment allowance @ Rs. 14,000 p.a.
5) Commission received on turnover Rs. 25,000.
6) Rent-free accommodation of (furnished) on which employer pays municipal tax on Rs. 65,000 p.a. and furniture value is Rs. 1,40,000.
7) Medical bills reimbursed by company (treatment taken from a private hospital) Rs. 15,000.
8) He is provided with a car of 1.8 Lt Capacity which is partly used for personal and partly for employment purposes.
9) During the year, he travelled in connection with his job and his travelling allowance is allotted to Rs. 20,000. Actual expenditure on tour amounted to Rs. 18,000.
10) Professional tax paid by him is Rs. 2,500.
Compute the taxable income from salary of Shri Swadhin Jyoti for the assessment year, 2017-18. 11
Computation
of salary of Mr. X for the Assessment Year (2018-2019)
|
Particulars |
Amount |
Amount |
|
a) Basic Salary b)
Dearness Allowance c)
City Compensatory Allowance d)
Entertainment Allowance e)
Commission on turnover f)
Travelling Allowance Less:
Exempted upto actual expenditure g)
Medical bills reimbursed by company h)
Value of car (2,400 * 12) i)
Value of rent free house 15%
of salary (Salary = 2,40,000+14,000+12,000+25,000+2,000=2,93,000) Add:
10% cost of furniture |
20,000 18,000 43,950 14,000 |
2,40,000 36,000 12,000 14,000 25,000 2,000 15,000 28,800 57,950 |
|
Gross Salary Less: Deduction U/S 16 (ia) Standard Deduction (iii)Professional tax paid |
|
4,30,750 50,000 2,500 |
|
Income from Salary |
|
3,78,250 |