Income from Salaries PDF

Income from Salaries/ 159 /1) 12) Valuation of Motor Car and Driver Rent free...

Income from Salaries/ 159 /1) 12) Valuation of Motor Car and Driver Rent free house 46,110 (5 months 15% + 5 months 10%) (3) Interest free loan @ 8% (If the employer i.e. is a company) 1,800-+900 =2,700 p.m. 80,000. int: Ifthe employer is owner of the house, the salaryin case of place more facility will be valued 15% of @ than 25 lakh for5 months and 10% for 7 month. Here, salary means total of Basic allowance. Salary Dearness pay + Entertainment + pPP.24 : Shri Hemant Nagar is a manager in Indore cloth market Co operative Bank. During the previous year 2023-24 his income particulars are as under 1 Basic salary ?36,000 per month. 2. Dearness allowance 20% of salary (50% part under is the terms of employment). 3. Bonus equal to 45 days' basic salary. 4 Self contribution to R.PE. 10% of salary and bank contribution is 8%, interest was credited to fund 1,700. 5. House Rent allowance 400 per month. He lives in self house. 6 Helper allowance month as assistant. 1,000 per month. He appointed a person on ? 800 per 7 During the previous year he surendered one month's earned leave for which the bank paid him extra sum of 18,000 being 15 days' basic pay. 8 749,500 for medical expenses of family members for the treatment in a private hospital were incured by the bank. 9. A motor car for official work of bank, all the expenses were borne by the.bank. It can also be used for journey between office and residence. 10. Tax deducted at source Income tax 4,000, Tax on employment 2,000 and repayment house loan 20,000. Compute his taxable income from salary for the assessment year 2024-25. Ans. : Taxable income from salary 5,95,100. ? D Hints: 1. If the employee lives house H.R.A. will be fully taxable. in self 2. Neither rate of interest nor principal amount of provident fund has been given, so it is assumed that interest has been credited not more than prescribed limit. PPP-25: Shri Akshav Jain is Chief Accountant in Grasim Industries Ltd. at Nagda (Population 2 Lakh). The employer provided him with the following emoluments and facilities during the preious year 2023-24 1 Basic salary ? 15,200 per month 2 Dearness allowance 8,400 per month, Bonus equal to one month salar. 3. Transport allowance 2,500 per month for commuting between residence to office and back. He attend the office by on foot. walking 4 The company gave him a loan amounting to 15,000 for purchasing a ? scooter and deducted 200 per month towards his salary. The Bank charges 14% interest on such loan.  rent 160/ IncomeTax wthout rent, falr of which is Income rom Salaries/ 161 at quarter provid 240 lal The company allotted Residenal hours for hin 1,000 shares 3 the office at 10 each at per during 200 market value per share on that whereas the et year facilies day was 125. 6 Fee sea and eeshment pays 1S per day to a restaurant outside the wotg plae Computehis taxable income from salary for therassessment The compary has deducted year 2024-25. The diys Professional Tax 2.500 and Income Tax 18,000 and 6.700 employer work on 28,000 from his cub blls calary. pass his accOunt 1The company credit card facilit proleional tax and 1,S00 ife insurance premium. : Ans. :Income from Salary 7,05,700. 1,500 for the assessment year O Hints He paid salaries income from 2024-25 1Gardener, Compute his taxable Ans. :Income from salary watchman and sweeper's uages paid by employer are taxable 3,15,350, perquisite at actual payment per month per scruant. o Motor car, concession on shares and Holiday O Hints expenditure is not home facilities are taxable for the tavable, actual noticeable. employee. is fully 1. Transport allouance at the place whose population 3 Frce education without rent is situated facility is not comparcd proulded at 2,27,600 for 5 months and with Indore. House 10 Lakh so 75% of salary 4 Personal club bills or taxable under more than 13,750 will be taxable section 17(2) (iv) as employee's licbility vahe of the facdlity, paid by the cmployer. 7months ill be 20,000 and free refreshment facility loan nat exceeding are nat ppP-27: Mr. Inderest free Penkaj Bodiya is appointed as a Sales manager in a company 3. lcxable but LIC premium is not deductible populated 80,000 on the salary 17,750 per month. He also is deductible, Professional tax agairs received the following facilities from the company also - 4. salary (1) Dearness allowance 15% manager the of the Delhi Cloth Mill, of salary and bonus cqual to wo months basic PPP-26: Mr. Vishnu Beshwar Is Delhl. salary. as basic He receives every month? 35,000 pay, 3,000 ts (2) Rent free house 8,000 as dearness allowas rent of which is 4.250 monthly paid by and the company. entertainment allowance Furniture cost 55,000 has provided him the provided. also but the company (a) He owns his house, following (3) The company paid 14,500 for electric bills used by the employee. Free amenities gas provided from Sweeper and a watchman, who are paid 1,300 each factory which cost 2,400. 1. gardener, a A (4) Mr. Bodiya son is getting education in America. The company per month. spent down Vale 71.23,500 for his education. 2. Fee use of the refrigerator costing 15,000, written (5) The company provided him with a motor car 8.500 on 1-4-2023. for office and personal uses. (5) The following obligations of his were paid by the company - Driver facility also provided. Expenses relating to personal use borne by the employee himself. 1. Gas and water bills amounting to ? 2,000, Free electricity from estimated value 1,000. (6) The company gave him leave traveiling assistance 14,000 for joumey to factory ? 2,400. He became membr Manali in the vacation period. Besides,he went Mumbai on official tour 2. Annual membership fee of Rotary Club to alongwith his wife. The company incurred 11,400 and of the club personally. for travelling car staying of both. (c) The company has provided the facility of a motor (1.6 litre cubc The for private purposes also and all the expenses (7) His two children live in a hostel for education. The company pays capacity). car is used 250 inchuding the driver's salary are borne by the company. per month per child hostel allowance. (d His son is studying in a school run by the company. The annual expenses (8) The employer paid life insurance premium 20,010 on his life. incurred by the company per student are 13,600 but had he been sent (9) The employer reimbursed his medical bills 15,700 and paid telephone for education to a similar school in Indore, a sum of 6,000 would have bills 15,000, telephone connection is in the name of the company. been payable during the year. (10) Income Tax amounting to ? 30,000 and Professional Tax as 2,500 were (e) He was sent to attend a training course at Ahmedabad for 15 days, the fee deducted against his salary. ?5,000 was paid by the company. Compute Pankaj Bodiya income under the head the assessment 0 He proCeeded on one month's leave Shimla where he stayed in the to year 2024-25. Salaries for holiday home maintained by the company. Expenditure amounting b 73,500 were borne by the company. Ans. :Income from salary 4,52,487.  Tax 162/Income so uN! not Income from Salaries/ 163 be part : it o emploment the terms Prashant Chhajed is appointed on DA & no under salary + BonuS (2,13,000 + 35,500) ofsol PPP-31 Mr. 1st April, 2017 in the Basic of 34.500 - grade point of uiea purpose Value of furnished 200- 35,300- 250 - 37,300 in house be salary for house valeaton 5 months cnd 10% for 7 months rent -2%0 free He octs 4,000 per month deamess State Bank of India - allowance (underthe terms of of salary for Le. to employment). wl be 15% appointcd in Jaipur and receives 73,000 per 30,a He is month high cost living 5500 =5527 allowance is taxable for light and The bank prOvided him with ful amount bank. a rent gas free Mat, rent of which ncu rules from 7.500 per 2 According to 'socn sources. Motor car and faciltes was paid bythe bank. He is also provided a domestic prouided from empioyer Mumbai trovel ane tarable ( 600 per month are Expenses not taxable expenditure borne by on ube month 3,500 per month 16,000 paid and by the bank. ? The bank provided servant one whose refrigerator wages and are one ollourance emplo 5,000 respectively, ond boarding cooler costing while their written down values on 1st focily Boarding were Z 14,000 and 3 Teiephone alou 2023 ? 3,000 respectively. limit. April s thin exenption His contribution to recognised provident fund is 80,000, while RELATING TO GRADE the bank PRACTICAL PROBLEMS 66.000. Interest 19,200 was credited to the fund at the rate of 12%. contributes a Compute his income from salary for the assessment in year 2024-25. was appointed Govt. Sarita Tiwari department Ans. :Income from salary PPR28: Mrs. grade basic 25,000 - salary 500- 35,000 previous for the 1st January 2020. year 2023-24. on Calculate ba for 2023 and 2 months O Hints : 5,82,448. (10 months The employee bank becomes duc Ans. : 3,13,000 is a cmployee, so salary in same month. 1. for202 salary becomes due on next month. 2 Excess contribution to R.PF ?8,688, Interest more than 9.5% = 4,000. of Gout employee Hint: Incase an officer in a public sector PPP-32: Mr. Terun Tapdia is cmployed in a private company of Mumbai. He is PPP-29: Shri Rajesh Dhariwal 70,000 since bankat e is in thc grade of 48,000 - 500 - 52,000 - 1,000 - 60,000 since of ? 50,000 - 2,000 - 1st July, 20)9 1st Jan. 2015. scale pay salary for the previous year Calculate his total basic 2023-24. He is paid 20°% of salary as deamess allowance and 3 5,000 per month as ? 6,90,000 (Salary become due in same Jouce Rent He an Ans. : Total Basic Salary month allowance. has hired accommodation on a monthly rent of of bank employee) 9.500. A part from this bonus R 60,000 annual paid to him. He contributes 15% of case his salary and dearmess allowance to the Recognised Provident Fund towards which the appointed as the Divisional was PPP-30 : Mr. Jaqdish Thakur Manager 4 omployer contributes an equal amount. He has been given a car which is used by him Company Dhar having population more than 23 at Director of a for his personal purposes also. The driver's salary and all the expenses relating to the 18.800 Jakh on lst January 2019 in the pay scale of affcial and personal use of the car are incurred by the employer. He also has the 20.000 - 500 - 26,000. He also receives of his pay as dear 0% amenity of concessional education for two own children and one sister at 200 per and 1,200 per month month per child in company's school which cost 1,500 per month per child and his ? allowance 1,500 as medical is allowence, allowance personal Telephone (provided by the employer at his residence and being used for company contributes 12.50% of his pay to Recognisd official and personal puposes both) bills 5,000 have been paid by the employer. He as well as the previous year to his Provident Bd Income salary for the assessment year 2024-25. Proident Fund. Interest credited during the Compute his from 1250% was 1,250. Tax on employment is due for the Ans. : Income from salary 8,61,412. z account at the rate of reset but the employer has not deducted any amount is this 2023-24 1500. year 202425 O Hints: under salary head for assessment compuled as under. Compute his taxable income Basic salary for the previous year 2023-24 1. Salary becomes due on the first day of next month. 2023 52,000 9= 4,68,000 x Ans. :Taxable Salary 4,17,705. 2024 53,000 x 3= 1,59,000 O Hints Basic : salary for 2023-24 is computcd as under: Basic salary 6,27,000 it will be considered as a part of of employment so January 2022 19,700 2. DA. is under the terms Basic January 2019 18,800 fund and house rent allowance. salary 20,000 salary for the purpose of provident 2020 19,100 January 2023 January 3 Taxable HRA 21,240. 2021 19,400 January 2024 20,500 is taxable @ 1,800 + 900+ 2,700 per month January Facility of motor car so s2 4. the provious year Increment has been due on 1st April, 2023, bills paid by employer, are not taxable. During telephone Irom March 2023 to Decernber 2024 (or 10 months was received on 2023 bass 2u for remaining 2 nonths on 2024 basis. 164/Iocome Tax EMPLOYEE RELATING TO NON-SPECIFIED PROBLEMS employee if his taxable Incomefrom Salaries / 165 ll be treated as Non-pecificd DIFFERENT An employee etc) is not morethan 50,000 moneta PROVIDENT FUND slary Dether Cash director recepas nor Less having prolessional at loast tax 20% share laciliies will holding. Motor car, free and he not be taxable in the case oi educatica PPP-34 : Shree Krishnamurari and 1,800 per month salary ? Mathur is employed RELATED PP on 18,000 per month and servant dearness allowance. Dedical blls Gas-clecthicihy facilties, refreshment are already Non.contributes 12o of hiss salary and Medical deamess Telephone., peciied employee. exermipt fb contribution allowance in a provident fund. is 14%. Interest on PF Hs employer's is at the previous year. He gets determined @ 12% which s in a company (8400 for 1.400 per month Bhavel is working Meghnagar house rent PPR33: Miss Radhika public relation officer. She (Triba) his Own house for self residence. What would be taxable alowance. He company. 80,000) as a USed salary for the assessnent area population from received 2024-25, if provident fund is (a) statutory. (b)recognised the following emoluments and facilities year (c) unrecognised ? Ans.: Taxable Salary : (a) 1 Salary 3.230 per month. Statutory P.F. 2,04,400 contacting public whichis (b) Recognised P.F. R 2,10,902 (c) her a Jeep for Un-recognised P.F. 2 The compary provided also 2,04,400 purposes O Hints : for personal of this per month. Out allowance 300 amnount she f the provident fund is 3. Entertainment sper recognised the employer's contribution exceeding 12% 200 per month on company's customers. of salary and interest above 9.5% shall be taxablc. the company, which fair rent e 4 house provided by is In case of statutory PF. And Rent free unrecognised PE Employer's month. Bectric and water paid by the company 3,800 interest shall be ignored contribution and during service bills per relating to period. the house. home GOVT. EMPLOYEEAND ENTERTENMENT 5. During the previous yeer she was operated in a private nursing ALLOWANCE RELATED. company paid billk 22,700. PPP-35: the 6. Free Lunch faclity during the office hours. The company incurred 1 On the basis of the following information compute the taxable income per month for the facility Mr X under the head Salaries for the assessment year 2024-25 - 7 She appointed a domestic servant whose wages * 800 per month. Tha Per month company pays to her servant allowance 500 per month. Basic Salary 12,000 8 Her contribution to unrecognised provident fund 15% of salary and Deamess Allowance 22,000 is 12%. Entertainment Allowance company's contribution 300 9 Miss Bhavel is working in tiba! area and company pays to her tribal arex Hill Area Compensatory Allowance 450 Tribal Area Allowance allowance350 per month 350 10. The company provided a gardener to look after the garden attached wih His own contribution towards Statutory Provident Fund 1,000 the house which annual wages is ? 3.600. Employer's Contribution 1.000 House Rent Allowance Compute taxable income under the head salary professional tax deducted 4,000 1000 from his salary. Interest credited to Provident Fund 6,500 Mc. X is officer in forest department Ans. : Income from salary R 2,445 of Uttar Pradesh Government. He is O Hints : employed 1100 meter above the sea level. He pays House Rent Ans. :Taxable 5,000 salary per month. 3,64,000. 1. After reducing professional tar enployee's cash salary income is not in exces O Hints : of 50,00, hence she s non-specified employee, therefore, Electric bil, Hills area allowance is exempt u's 50 300 per month, Motor car facility and medical bls are not laxable in such case. Tribal allouwance House exempt R 200 per month, HRA Taxable 2,4000. 2. focility is valued at 7.5% (5 months) and 5% for (7 months) of salary amountingto 50.400. PPP-36: Major Randhir Singh Gill is appointed in Indian Army. He is 3 Employer's contribution to unrecognised prouident fund is not considerable posted at Siachen (Remote area) during the previous year and during the serolce received the following remuneration Tribal areo allouance is exempt to the extent of 200 per month. 1. Salary 23,600 per month (including 8,600 deamess pay) 5 Seruant allouance s taxable becouse a cash 2. Deamess allowance 7 1.800 per month is receipt, but gardener facility it not is taxable 3. Composite compensatory allowance 8,500 per month Hil 4. Free accommodation facility for which the Govt. spent 4,500 per month  TaN Incomefrom Salaries/ 167 166/lncome The Govt. spends and beverages. toa and sacks O Notes : Fee meal, Calary becomes due on first day of next month, so March 2023 salary was 1 5. monih for ths pupase. month n April. 1, 2023 and March 2024 salary will be due on lst ApriI due 1200 per 2024 which allouance is taxoble in next year. per month 6. Family allowance 1,500 and one younger Eenses on medical treatment and stay at the employee or 7 Medical His two sons 2 any member of his Annitsar. Nomal fomily resdes brolher a outside India exempt. Travel expenses of the is at His fami there. 8. in miltary school expenditure in attendent who patient and one tree education Such accompanies the patient in connection with per student. such treatment geting 1.400 per month also exempt. So treatment expenses ? 50,000 and is school is arears of and staying travelling 24.700 during the previous year as DA. expenditure 45,000 are exempted, but Mr. Shri Niwasan trauelling expenses 9. He received relatingta 25.000 are taxable because his visit to