Sol 1 Name of the assessee: Mr Banku PY: 2021-2022

Residential status: Resident and Ordinarily Resident AY: 2022-2023

Computation of Income from Salary

Particulars Rs.
Basic Pay [(18000 x 4) + (19,500 x 8)] (W.N.1) 228,000
Dearness Allowance (W.N.2) 171,900
Gross Salary 399,900
Less : Deductions u/s 16
Standard deduction 50,000
Income from salary 349,900

Working Note 1: Calculation of Basic Salary

Period Basic Salary
01/08/2011 – 31/07/2012 9,000 p.m.
01/08/2012 – 31/07/2013 (9,000+750) 9,750 p.m.
01/08/2013 – 31/07/2014 (9,750+750) 10,500 p.m.
01/08/2014 – 31/07/2015 (10,500+750) 11,250 p.m.
01/08/2015 – 31/07/2016 (11,250+750) 12,000 p.m.
01/08/2016 – 31/07/2017 (12,000+1,000) 13,000 p.m.
01/08/2017 – 31/07/2018 (13,000+1,000) 14,000 p.m.
01/08/2018 – 31/07/2019 (14,000+1,000) 15,000 p.m.
01/08/2019 – 31/07/2020 (15,000+1,500) 16,500 p.m.
01/08/2020 – 31/07/2021 (16,500+1,500) 18,000 p.m.
Sol 2 Name of the assessee: Mr Chunky Kumar PY: 2021-2022
Residential status: Resident and Ordinarily Resident AY: 2022-2023

Computation of Income from Salary

Particulars Rs.
Basic Pay (1,50,000 x 12) 1,800,000
Gross Salary 1,800,000
Less : Deductions u/s 16
Standard deduction 50,000
Income from salary 1,750,000

Note: Any allowance / perquisite provided by Government to any citizen of India for rendering services outside I
ndering services outside India are exempt u/s 10(7).
Sol 3 Name of the assessee: Mr Leo Martin PY: 2021-22
Residential status: Resident and Ordinarily Resident AY: 2022-23

A) Income from salary is computed from starting of the year (01/04/2020)

Computation of Income from Salary

Particulars Rs.
Basic Salary (1,00,000 X 12) 1,200,000
Advance Salary for April 2022 100,000
Bonus received during the year 12,000
Arrears of salary 150,000
Reimbursement of Medical expenses 25,000
Gross Salary 1,487,000
Less: Deduction u/s 16
Standard deduction 50,000
Income from Salary 1,437,000

Notes
1)    Bonus is taxable only on receipt basis,
therefore bonus for 2019-20 outstanding during the year is not taxable in PY 2020-21.
2)    Reimbursement of car expenses in respect of office use is not taxable.
3)    Advance against salary is in the nature of loan taken from employer therefore,
advance of 40,000/- against salary of May 2022 is not taxable.
4)    Loan from employer is capital receipt & not taxable.
5)Advance salary is TAXABLE in the year of receipt.However Advance against salary is NOT TA
B) Mar - Jan (11 months)

Particulars Rs.
Basic (1,00,000*11) 1100000
Entertainment allowance (1,000*11) 11000
Commutation allowance (2,000*11) 22000
Gross Salary 1,133,000
Less: Deduction u/s 16
Standard deduction 50,000
Income from salary 1,083,000
in PY 2020-21.

er therefore,

ce against salary is NOT TAXABLE in the year of receipt.

Sol 4 Name of the assessee: Mr Kamal
Residential status: Resident and Ordinarily Resident

Computation of Income from Salary

Assuming that he does not opt for optional tax regime U/S 115 BAC. Assuming that he opts for option
Particulars Rs. Rs.
Basic Salary (75,000*12) 900,000
Dearness Allowance (9,00,000*40%) 360,000
City compensatory allowance (9,00,000*10%) 90,000
Medical allowance (8,000*12) 96,000
Children educational allowance (600*12*3) 21,600
Less: Exempt (100*12*2) 2,400 19,200
Hostel expenditure allowance (900*12*2) 21,600
Less: Exempt (300*12*2) 7,200 14,400
Transport Allowance (2,000*12) 24000
Overtime allowance (2,500*12) 30,000
Uniform Allowance (800*12) 9,600
Less: Exempt 2,000 7,600
Gross Salary 1,541,200
Less: Deduction u/s/16
Standard Deduction 50,000
Profession Tax paid 2,400
Income From Salary 1,488,800
 PY: 2021-22
AY: 2022-23

Assuming that he opts for optional tax regime U/S 115 BAC.
Particulars RS RS
Basic Salary (75,000*12) 900,000
Dearness Allowance (9,00,000*40%) 360,000
City compensatory allowance (9,00,000*10%) 90,000
Medical allowance (8,000*12) 96,000
Children educational allowance (600*12*3) 21,600
Less: Exempt 0 21,600
Hostel expenditure allowance (900*12*2) 21,600
Less: Exempt 0 21,600
Transport Allowance (2,000*12) 24,000
Overtime allowance (2,500*12) 30,000
Uniform Allowance (800*12) 9,600
Less: Exempt 0 9,600
Gross Salary 1,552,800
Less: Deduction u/s/16
Standard Deduction 0
Profession Tax paid 0
Income From Salary 15,.52,800
Sol 5 Name of the assessee: Miss Reema PY: 2021-22
Residential status: Resident and Ordinarily Resident AY: 2022-23

Computation of Income from Salary

Particulars Rs.
Basic Salary (75,000 x 12 ) 900,000
House Rent Allowance ( 25,000 x 12 ) 300,000
Allowance for looking after the evening shift of the college (1,500 x 12) 18,000
Gross Salary 1,218,000 Taxable salary if opted for Sec 115 BAC.
Less: Deduction u/s 16
Standard deduction 50,000
Profession tax paid 1,600
Income from Salary 1,166,400

Notes:

1)      Exemption from House rent allowance is not available since she is staying in her own house and not paying any rent.

2)      Remuneration received from IMT college for working as visiting faculty will be taxable as income from Business & profession.

3)      Examinership fees received from Shivaji University and Banaras Hindu University will be taxable as income from Business & profession.
Income by way of examinership fees received by a professor from the same university in which he is employed would
not be chargeable to tax under the head income from salary but must be taxed as Income from other sources under
Section 56. This is because of the fact that the essential condition that the income in question must be
received for services rendered in the ordinary course of employment would not be fulfilled in the case
of examinership fees

4)      No deduction is allowed from income from salary for expenses incurred while performing the duty.

5)      Fees for setting T.Y.B.Com. papers is received from Mumbai University not from her employer therefore not taxable as Income from salaries.

6)      Deduction for Profession Tax is allowed only on payment basis.

Sol 6 Name of the assessee: Miss Aasin Chakraborty
Residential status: Resident and Ordinarily Resident

Computation of Income from Salary: Government Employee

not opted for sec 115 BAC
Particulars Rs.
Basic Salary (25,000 x 9.5 ) 237,500
Dearness allowance (2,37,500 x 120%) 285,000
Commission on sales 47,000
Gratuity Exempted
Bonus declared Not Taxable
Entertainment allowance (9,250 x 9.5) 87,875
Amount received from statutory provident fund Exempted
House Rent Allowance (55,000 – 35,000) 20,000
Commuted pension Exempted
Gross Salary 677,375
Less: Deduction u/s 16
Standard deduction 50000
Entertainment allowance
Deduction to the extent of least of the following:
a)1/5th of basic Salary Rs.47,500
b)Amtount notified Rs.5000
c)Actual amount received Rs.87,875
Whichever is lower 5000
Profession tax paid 1080
Income from salary 621,295
 PY: 2021-22
AY: 2022-23

Computation of Total income and tax payable

115 BAC OPTED
Rs Particulars
237,500 Income from salary
285,000 Income from house property
47,000 Profits & gains of business or profession
Exempted Capital gains
Not Taxable Income from other sources
87,875 Gross total income
Exempted (-) Deductions under chapter VI-A
55,000 Total income
Exempted Total income rounded off u/s 288A
712,375 Tax on above
(+) 4% Health and Education cess
0 Tax payable
Tax payable rounded off u/s 288B

0
0
712,375
d tax payable

Rs. Gross total income 621,300

621,295.00 ON FIRST 2,50,000 0 0
- Next 2,50,000 to 5,00,000 5% of 2,50,000 12,500
- Bal 1,21,300 20% of 1,21,300 24,260
- 36,760
-
621,295.00
-
621,295.00
621,300.00
36,760.00
1,470.40
38,230.40
38,230.00
 Computation of Income from Salary
Particulars Rs. Rs.
Basic Salary
From 01/04/2019 to 31/07/2019 (75,000 x 4) 300000
From 01/08/2020 to 31/03/2020 (90,000 x 8) 720000 1020000
Taxable HRA (W.N. 1) 228000
Gross Salary 1248000
(-) Deductions u/s/16
Standard deduction 50000
Income fromSalary 1198000

W.N. 1: Computation of Taxable HRA

Particulars Rs. Rs.
I) From 01/04/2021 to 31/07/2021 (4 months)
HRA Received (32,000 x 4) 128,000
Less: Exempt to the extent of least of the following
a) Actual HRA received 128,000
b) Rent Paid – 10% of Salary (1,00,000 – 30,000) 70,000
c) 50 % of Salary (3,00,000 x 50%) 150000 70,000

II) From 01/08/2021 to 30/11/2021 (4 months)

HRA Received (32,000 x 4) 128,000
Less: Exempt to the extent of least of the following
a) Actual HRA received 128,000
b) Rent Paid – 10% of Salary (1,00,000 – 36,000) 64,000
c) 50 % of Salary (3,60,000 x 50%) 180,000 64,000

III) From 01/12/2021 to 31/01/2022 (2 Months)

HRA Received (45,000 x 2) 90,000
Less: Exempt to the extent of least of the following
a) Actual HRA received 90,000
b) Rent Paid – 10% of Salary (50,000 – 18,000) 32,000
c) 50 % of Salary (1,80,000 x 50%) 90,000 32,000

IV) From 01/02/2022 to 31/03/2022 (2 Months)

HRA Received (45,000 x 2) 90,000
Less: Exempt to the extent of least of the following
a) Actual HRA received 90,000
 b) Rent Paid – 10% of Salary (60,000 – 18,000) 42000
c) 50 % of Salary (1,80,000 x 50%) 90000 42000
Total taxable HRA

Sr. No. Period Components

Basic Salary – Rs.75,000 p.m.
I) From 01/04/2021 to 31/07/2021 (4 months) House rent allowance - Rs.32,000 p.m.
Rent Paid - 25,000 p.m.
Basic Salary – Rs.90,000 p.m.
II) From 01/08/2021 to 30/11/2021 (4 months) House rent allowance - Rs.32,000 p.m.
Rent Paid - 25,000 p.m.
Basic Salary – Rs.90,000 p.m.
III) From 01/12/2021 to 31/01/2022 (2 Months) House rent allowance - Rs.45,000 p.m.
Rent Paid - 25,000 p.m.
Basic Salary – Rs.90,000 p.m.
IV) From 01/02/2022 to 31/03/2022 (2 Months) House rent allowance - Rs. 45,000 p.m.
Rent Paid - 30,000 p.m.
Sec 115 BAC
RS

1,020,000
436,000
1,456,000

0
1,456,000

Rs.

58,000

64,000

58,000
 48,000
228,000
Sol 8
Name of the assessee: Mr. Bahubali
Residential status: Resident and Ordinarily Resident

Computation of Income from Salary

Particulars
Basic Salary (5000x7)
Dearness Allowance (1000x7)
Telephone allowance (500x7)
Gratuity (W.N. 1)
Pension (W.N. 2)
Leave salary (W.N. 3)
Gross salary
Less: Deductions u/s 16
Standard Deduction
Income from salary
Taxable salary would have been 1,68,600 had Mr Bahubali opted for the optional Tax regime U/S 115 BAC.
W.N. 1 Gratuity
Calculation of Average Salary for Last 10 Months immediately preceding month of retirement.
Period of ten months before Retirement ( From 01/12/2020 to 30/09/2021)
For calculating exemption, Salary includes Basic salary as well as Dearness allowance if forming part of salary for the p
Basic Salary
From 01/12/2020 to 29/02/2021 ( 4,900 X 3)
From 01/03/2021 to 30/9/2021 ( 5,000 X 7)
Dearness allowance ( 1,000 X 10)
Salary for Last 10 Months
Average Salary (59,700 /10)

Gratuity Received
Less: Exempt
Amount notified
Actual amount received
1/2 x 10 months average salary x No. of completed years of service without rounding off (1/2 X 5970 X 20)
Taxable gratuity

W.N. 2: Pension
Uncommuted pension upto the date of commutation ( 3,000 x 3)
Uncommuted pension after the date of commutation ( 3,000 X 30% x 2)
Commuted pension
Less: Exempt
Actual
1/3 x (42000*100/70)
Taxable pension
W.N. 3: Leave Salary
Leaves elegible as per 30 days per completed year
Leaves availed during the tenure at the company
Leaves to his credit
Therefore cash equivalent will be nil, hence exemption will be nil. Therefore entire leave salary will be taxable.

Note: Medical insurance paid by employer is exempted perquisite

 PY: 2021-22
AY: 2022-23

Rs.
35,000
7,000
3,500
60,300
32,800
30,000
168,600

50,000
118,600

t of salary for the purpose of retirement benefits

14,700
35,000 49,700
10,000
59,700
5,970

120000

2,000,000
120,000
59,700 59700
60300

9000
1800
42000

42000
20000 20000 22000
32800
20 months
25 months
Nil
Sol 9 Name of the assessee: Mrs. Radha PY: 2021-22
Residential status: Resident and Ordinarily Resident AY: 2022-23

Computation of Income under the head Salary

Particulars Rs. Rs.
Basic Salary (15,400*12) 184,800
City Compensatory Allowance 8,000
Bonus 10,200
Education Allowance 4,000
Leave Travel Concession 1,000
(+) Perquisites
Income tax penalty paid by employer 2,000
Medical Reimbursement 14000
Free Refreshment Nil
Medical Facility Nil
Domestic servant 30,000
Free Residential Telephone Nil
Payment of electricity bills by employer 1,060
Reimbursement of gas bills 1,000
Professional tax paid by employer 300 48,360
Gross Salary 256,360
(-) Deductions u/s 16
Standard Deduction 50000
Professional Tax 450
Income from Salary 205,910

Notes:
Domestic servant was employed by the employee
and the salary of such domestic servant was paid/reimbursed by the employer.
It is taxable as perquisite.
Taxable perquisite value = Rs.2,500 × 12 = Rs. 30,000.
Education allowance given for Children is exempt but not for grand children
Computation of Total income and tax payable

Particulars Rs.
Income from salary 205,910.00
Income from house property -
Profits & gains of business or profession -
Capital gains -
Income from other sources -
Gross total income 205,910.00
(-) Deductions under chapter VI-A -
Total income 205,910.00
Total income rounded off u/s 288A 205,910.00
Tax on above -
(+) 4% Health and Education cess -
Tax payable -
Tax payable rounded off u/s 288B -
 Computation of income from salary from CIC Ltd.
Particulars Rs. Rs.
Basic Pay (12,000 x 10) 120,000
Dearness Allowance (3,000 x 10) 30,000
Commission 6,000
Rent free accommodation 254,000
Best suggestion award (Gift) (12,000 – 5,000) 7,000
Lunch Facility Exempt
Gratuity (WN 1) 118,653.85
Uncommuted Pension (1,500*2) 3,000
Commuted Pension (WN 2) 75,000
Refund of employer’s contribution (including interest) 350,000 963,653.85

Computation of income from salary from TIC Ltd.

Particulars Rs. Rs.
Basic Pay (8,000 x 2) 16,000
House Rent Allowance (WN 3) 600 16,600

Particulars Rs. Rs.

Gross Salary 980,253.85
(-) Deductions u/s 16
Standard Deduction 50000
Entertainment allowance 0
Profession tax 0 50000
Income from salary 930,253.85

Interest of Rs.1,00,000 on employee contribution from unrecognised provident fund is taxable

under Income from Other Sources

Any gifts up to Rs. 5,000 in the aggregate per financial year would be exempt in the hands of the employees.
The excess value of gift over and above Rs. 5000/- would be taxed as a perquisite in the hands of the employees under the head Salary.
 Actual gratuity received
(-) Exempt to the extent of least of the following
(a)    Amount actually received
(b)   Amount Notified
(c)    15/26 x last drawn salary x No.of completed years of service (25)
Taxable (3,35,000 - 2,16,346)
Salary = 12000 + 3000 = 15000

Working note 2: Commuted Pension

Particulars
Commuted Pension
(-) Exempt to the extent of least of the following
1/3 of full amount as if whole pension was commuted
Actual amount received
Taxable

Working note 3: House rent allowance

Particulars
Actual HRA received
(-) Exempt to the extent of least of the following
(a)   Amount actually received
(b)   Rent Paid – 10% of salary = 4,000 – 1,600
(c)    50% of salary = 16,000 x 50%
Taxable
Salary = 8000

e employees.
f the employees under the head Salary.
HW 1 Mr. Santosh

Basic Pay (20,000 x 9)

Dearness Allowance (5,000 x 9)
Gratuity {Sec 10(10)}
Gross Salary
Less: Standard deduction
Taxable Income under the head Salary
Taxable income rounded off to the nearest 10 rupee

Working note: Gratuity

Least of the following is exempt:
(a)   Amount actually received
(b)   Amount Specified
(c)    15/26 x Last drawn salary x No. of completed years of service
Taxable (9,10,000 - 2,88,462)

Tax on Rs.7,96,540 at slab rate

Add: Health & Education cess @ 4%
Tax Liability
Rounded off u/s 288B
Rs.
1,80,000
45,000
6,21,538
8,46,538
-50,000
796,538
796,540

9,10,000
20,00,000
288462
6,21,538

69,308
2772
72,080
72,080
HW 2 Mr. Samadhan
Rs.
Basic Pay (21,000 x 4) + (28,000 x 3.5) 182000
Dearness Allowance (8,000 x 3.5) + (5,000 x 4) 48,000
Entertainment allowance (20,000 x 7.5) 150000
Gratuity {Sec 10(10)} 326300
Gross Salary 706300
Less: Standard deduction 50,000
Taxable Income under the head Salary 656,300

Tax on Rs.6,56,300 at slab rate 43,760.00

Add: Health & Education cess @ 4% 1,750.40
Tax Liability 45,510.40
Rounded off u/s 288B 45,510.00
Working note: Gratuity
Least of the following is exempt:
(a)   Amount actually received 575000
(b)   Amount Specified 20,00,000
(c)    Half months average salary for each completed years of service (½ x 25,230 x 20) 248700
Taxable (5,75,000 - 2,52,300 ) 326300
Calculation of Average Salary
It is calculated for last 10months immediately preceding month of retirement
i.e. From January 2019 to October 2019
Basic Pay
From January to July Rs.21,000 x 7 = Rs. 1,47,000
From August to October Rs.28,000 x 3 = Rs. 84,000
Total 231000
Dearness Allowance
From January to July Rs. 5000 x 30% x 7 = Rs. 16,800
From August to October Rs. 8000 x 30% x 3 = Rs. 4,500
Total 17,700
Gross total for last 10 months 248700
Average Salary = (2,52,300 ÷ 10) 24,870
HW 3 Mr. Rajesh Ranjan

Rs.
Basic Pay (32,000 x 8) 256000
Dearness Allowance (18,000 x 8) 144000
City compensatory allowance (6,000 x 8) 48,000
Gratuity {Sec 10(10)} WN 1 372000
Uncommuted Pension WN 2 52,000
Commuted Pension 471429
Gross Salary 1343429
Less: Standard Deduction 50,000
Income under the head Salary 1,293,429
Taxable Income rounded off to the nearest 10 rupee 12,93,430

Tax on Rs.12,93,430 at slab rate 1,98,029

Add: Health and education cess @ 4% 7921

Tax liability rounded off 2,05,950

Working note 1: Gratuity
Least of the following is exempt:
(a)   Amount actually received
(b)   Amount Specified
(c)    Half months average salary for each completed years of service (½ x (32000+60%*18000 x 20)
Taxable (8,00,000 – 4,28,000 )
Calculation of Average Salary
It is calculated for last 10months immediately preceding month of retirement
Month of retirement is December i.e. From February 2019 to November 2019
Basic Pay ( 32,000 x 10)
Dearness Allowance ( 18,000 x 10)*60%
Gross total for last 10 months
Average Salary = (4,28,000 ÷ 10)

Working note 2: Uncommuted Pension

From December 2019 to January 2020 ( 20,000 x 2)
From February 2020 to March 2020 ( 20,000 x 30% x 2)
Total
Working note: Commuted Pension
Received
Exempt ( 1/3 x 900,000 / 70%)
Taxable
8,00,000
20,00,000
4,28,000
3,72,000

3,20,000
1,08,000
4,28,000
42,800

40,000
12,000
52,000

9,00,000
4,28,571
471429
HW 4 Mr. Ganesh

Rs.
Basic Pay (30,000 x 8) 240000
Dearness Allowance (10,000 x 8) 80,000
Leave Salary (WN 1) 350000
Uncommuted Pension (WN2) 44,000
Commuted Pension (WN2) 0
Gross Salary 7,14,000
Less: Standard Deduction -50,000
Taxable Income under the head Salary 6,64,000

Tax on Rs.6,64,000 at slab rate 42,800

Add: Health & Education Cess @ 4% 1712
Tax Liability 44,512
Tax liability rounded off to the nearest 10 rupee 44,510
Working note 1: Leave Salary
Least of the following is exempt:
(a)   Amount actually received
(b)   Amount Specified
(c)    Ten months salary (10 x 36,000)
(d)   Cash Equivalent of unavailed leave (540/30 x 36,000)
Exempted least of the above
Taxable (6,50,000 - 3,00,000 )
Calculation of Average Salary
It is calculated for last 10months immediately preceding date of retirement
Date of retirement is December i.e. From February 2019 to November 2019
Basic Pay + 60% of dearness allowance ( 30,000 + 6,000)
Since there is no change in pay structure, average salary is same as last drawn salary.
Computation of leave at the credit
Leave Entitlement = 30 x 20 = 600 days (Always consider leave entitlement of the employee)
Less: Leave availed = 45 days
Less: Leave Encashed = 15 days
Leave at the credit = 540 days (convert into month = 540/30)

Working note 2: Uncommuted Pension

From December 2019 to February 2020 ( 12,000 x 3)
For March 2020 ( 12,000 x 2/3) Since 1/3 is commuted, so remaining 2/3 is still uncommuted
Total Uncommuted pension
Working note: Commuted Pension
Received
Exempt (1/2 of full value of pension since not receiving gratuity)= 1/2x(850000 divided by 1/3)
Taxable (Since exempt amount is more than received so nothing is taxable)
 650000
300000
360000
648000
300000
350000

36,000

648000

36,000
8,000
44,000

8,50,000
1,275,000
0
HW 5

Basic Pay (7,500 x 12)

Medical Allowance (5,000 x 12)
Commission on the basis of turnover
Taxable Portion of annual accretion (1,920 + 5,000) WN
Gross Salary
Less: Standard Deduction
Total taxable Salary 1,12,920
WN : Calculation of Taxable Portion of Annual Accretion
Employer’s contribution to RPF @ 14% of Salary (14% of 96,000)
Less: 12% of Salary being exempted
Taxable portion

WN : Interest credited to RPF Balance @ 12%

Less: Exempted upto 9.5% (24000/12% x 9.5%)
Taxable portion

Note: Salary for the above purpose is basic pay plus commission on the basis of turnover achieve
 Rs.
90,000
60,000
6,000
6,920
162920
-50,000

13,440
11,520
1,920

24,000
19,000
5,000

on the basis of turnover achieved by him.

HW 6 Mr. Ram

Basic 1,20,000

Dearness Allowance 48,000

Voluntary Retirement Compensation (note) 3,00,000
Gross Income from Salaries 4,68,000
Less: Standard Deduction -50,000
Taxable Income from Salaries 4,18,000
WN-
VRS Received 8,00,000
Exempt u/s 10(10C) 5,00,000
1.      Actual – 8,00,000
2.      Limit – 5,00,000
3.      LDS*3*CYS- 14000x3x30 = 12,60,000
4.      LDS*remaining month of service
14000x3yrsx12m = 5,04,000

Taxable VRS (8 lakh – 5 lakh) 3,00,000

Sol 7 For Mr. Chandra Mohan Income from salary is computed from the date of joining (i.e. 01/09/2021) upto the en

COMPUTATION OF INCOME FROM SALARY

Particulars Amt. (Rs.) Amt. (Rs.)
Basic Salary 560,000
Dearness Allowance 315,000
Ex- gratia ( Received in Cash) 105,000
Entertainment Allowance 21,000
Perquisite Value of Car in respect 9,000
Arrears of salary pertaining to PY 28,000
Commission on sales 47,000
Transport Allowance Received 17500
Gross Salary 1,102,500
Less: Standard deduction 50,000
Less-Profession Tax was deducted a 2,000
Taxable Income From Salary 1,050,500
Sol.8 Computation of Income from Salary
Particulars Amt. (Rs.)
Basic Salary ( 30,000 x 7) 210,000
Dearness Allowance (4,000 x 7) 28,000
House rent allowance (W.N.3) 17,800
Transport Allowance (4,800 - 3200)x 7 11200
Night duty allowance (1,000 x 7) 7,000
Entertainment allowance (1,000 x 7) 7,000
Uniform Allowance 35,000
Less: Exemption upto the extent spent 35,000 Nil
Leave Encashment 80,000
Commission as a % of turnover (20,00,000 x 4%) 80,000
Uncommuted pension upto 1/1/2021 16,000
Uncommuted pension after 1/1/2021 12,000
Commuted Pension (W.N.1) 50,000
Gratuity (W.N.2) 0
Gross Salary 519,000
Deductions U/S 16
Standard Deduction 50,000
Professional Tax 1,500
Taxable Salary 467,500

(W.N.1) Commuted Pension

Received 150,000
Less: Exempt
1/3 of Amount 100,000
Actual Received 150,000 100,000
Taxable 50,000

(W.N.2) Gratuity
Received 120,000
Less: Exempt
15/26*Salary*No. of completed years of service 411,923
Amount Notified 2,000,000
Actual Received 120,000 120,000
Taxable Nil

(W.N.3) House rent allowance

Calculation of salary for HRA Exemption
Basic Salary ( 30,000 x 7) 210,000
Dearness Allowance (4,000 x 7) 28,000
Commission as a % of turnover 80,000
Salary for HRA Exemption 318,000

HRA Received 28000

Less: Exempt
50% of Salary (3,18,000 x 50%) 159000
Rent paid - 10% of Salary (42,000 – 31,800) 10200
Actual Received 28000 10200
Taxable HRA 17800