INCOME TAX

Assignment Questions
Last Date :- 19/1/2024

Problems on Computation of Gross Salary

1. Mr. X, physically handicapped person working in ABC Company Ltd. Bangalore has
furnished the following details of his income for the year 2022-23. Compute ihs income
from salary for the A. Y. 2023-24
a) Basic salary ₹40,000 p. m
b) Dearness allowance enters into retirement benefits ₹ 24,000
c) Fixed percentage of Commission on sale ₹ 1,500 per month.
d) Bonus ₹ 65,000
e) HRA ₹ 12,000 p.m. ( Rent Paid ₹ 10,600 p.m)
f) Transport allowance ₹ 4,000 p. m.
g) Reimbursement of Medical expenses ₹ 17,500 for treatment taken in private hospital.
h) Management contribution and own contribution to RPF is 15% of Salary
i) Interest credited to RPF is ₹ 11,000 at 11% p. a.
j) Professional tax paid by employees is ₹ 400 p. m
k) He is provided with more than 1.6 liter capacity car by the company for official use.
All the expenses including salary of the driver are met by the company.
l) Children education allowance ₹ 600 p.m per child for two children and children
hostel allowance₹ 1,000 p. m for two children.

2. From the following information calculate the income from salary of Mr. Anand for the A.
Y.2023-24
a) Basic salary ₹ 40,000 p.m
b) Dearness allowance 60% of basic forming part of salary.
c) Commission ₹ 18,000.
d) Bonus ₹ 60,000.
e) Employer and employees contribution to SPF is 15% of Salary.
f) Interest credited to SPF is ₹ 12,000 at 10% p.a.
g) CCA ₹ 500 p.m
h) Medical allowance ₹ 800 p.m.
i) He is provided with a rent free furnished house by the employer for which his
employer paid rent of ₹ 5,000 p.m. to the owner of the house. Cost of furniture is ₹
1,20,000.
j) He Is also provided with a car less than 1.6 litre capacity by the employer both for
personal and official use. All the expense of the car including salary of the driver are
paid by the employer.
k) Free telephone at his residence by the employer valued at ₹ 12,500.
l) Professional tax paid by him ₹ 450 p. m.
m) Gift voucher worth ₹ 12,500 were issued by the employer.

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 3. Mrs. Hemamalini ( age 42 years) is working as a Director in Maruthi Suzuki Ltd.
Mumbai her salary income details are as follows:
a) Basic Salary ₹ 21,000 p. m.
b) Bonus – 2 months basic pay
c) Commission 3% on Sales. During the year she reached a sales target of ₹ 50,000
d) Dearness allowance forming part of Salary ₹ 7,000 p. m.
e) Medical allowance ₹ 1,400 p. m. ( Medical expenses were ₹ 20,000)
f) Entertainment Allowance ₹ 3,000 p. m
g) Children's hostel allowance for her two children @ ₹ 500 p. m. Per child ₹ 12,000
h) RPF company’s contribution ₹ 6,000 p. m.
i) RPF own contribution ₹ 5,000 p. m.
j) Interest accrued on 15th June 2018 RPF @ 11% ₹ 44,000
k) Diwali Gift ₹ 7,000
l) Holiday home facility at kulu ₹ 26,000
m) She has been provided with rent free furnished accommodation in Mumbai for which
company pays monthly rent of ₹ 10,000 and cost of furnished being ₹ 60,000
n) Honda city car above 1600cc has been provided along with driver for both private and
official use. Company owns the car and spent ₹ 55,000 on petrol and ₹ 36,000 on
driver salary.
o) Hemamalini paid Professional tax ₹ 2,400
p) She has been provided health club facility in a hotel by the employer, this facility is
available to all employees. Actual expenditure for providing this facility is ₹ 5000 p.
a.
q) Employer provider Watchmen facility, employer bears salary of ₹ 2000 per month
out of which ₹ 5000 per month is recovered.
Compute Taxable Salary for the Assessment year 2023-24.

4. Mrs. Smitha working as a sales executive in Maruti Limited. Kolkata and salary details
are as follows for the previous year 2022-23
a) Basic salary ₹ 21000 per month
b) Bonus equal to 2 months basic salary
c) Commission 3% on sales (During the year sales target of ₹ 5,00,000)
d) Dearness allowance ₹ 7,000 per month. (Eligible for retirement benefit)
e) Medical allowance ₹ 1,400 per month (Medical expenses ₹15,000 p. a.)
f) Children hostel allowance for two children at ₹ 500 per month per child.
g) Children education allowance for t her two children ₹400 per month for child.
h) RPF contribution by the company ₹ 6,000 per month.
i) RPF contribution by employees ₹ 5, 000 per month.
j) Interest credited on RPF 11% ₹ 44,000.

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 k) She has been provided with company’s owned rent free furnished house in Mumbai
and cost of furniture provided ₹ 60,000.
l) Mrs. Smitha paid her professional tax ₹ 2,400 p.a.
m) The company during the year Requistioned her for a refresher course in Hongkong
and the cost of travel, stay expenses amounting to ₹ 56,500 were met by the company.
n) Medicalim insurance on life of Mrs. Smitha paid by the company ₹ 5,000
o) Payment of accidental insurance premium by the company ₹ 5,000.
Compute Taxable salary for the A. Y.2023-24

5. Mr. Yadav is an employee of State Bank of India Bangalore and he Submits the
following information relevant for the A. Y.2023-24. Compute his taxable income from
salary:
a) Basic Salary ₹ 8000 per month
b) Dearness allowance ₹ 1500 per month (does not form part of salary).
c) City compensatory allowance ₹ 300 p. m.
d) Bonus ₹ 10,000 per annum.
e) Conveyance allowance ₹ 2,000 p. m. ( 60% spent for office duties)
f) House Rent allowance ₹ 5,000 p. m. ( Rent paid by employee ₹ 7,000 p. m.)
g) Payment of LIC premium by SBI ₹ 4,000 p. a.
h) Service of Sweeper paid by SBI ₹ 200 per month.
i) Leave travel Concession ₹ 5,000 ( First time in current Block Period)
j) Reimbursement of Gas, electricity and water bill by the SBI ₹ 2,500 per annum.
k) RPF contribution by the bank and own contribution of employees 14% of Salary.
l) Interest credited to RPF at 14% ₹ 14,000.
m) Professional tax paid by Yadav ₹ 5,000.
n) Interest free loan for purchasing a house given on 01-10-18 ₹ 2,00,000 ( SBI lending
Rate is 10.1%)

6. Mr. Sudeep sales manager of ANZ Limited, Mumbai has furnished the following details
of his income for the year ended 31st March 2022. Compute his taxable income from
salary for the assessment year 2023-24
a) Basic salary ₹ 17500 per month
b) Dearness allowances ₹ 6,000 per month (forming part of salary)
c) Commission is 2% on sales. During the previous year sales target reached by him is ₹
4,00,000.
d) Bonus equal to 3 months basic salary.
e) Entertainment allowance 2,500 per month (amount spent 12,000).
f) Children hostel allowance for his 3 children ₹ 400 per month per child.
g) Reimbursement of medical bills ₹ 22,000 for the treatment taken in private Nursing
Home.
h) He is provided rent free furnished accommodation owned by the company. cost of
furniture ₹ 1,00,000. FRV of that accommodation is ₹ 7500 per month.

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 i) Free telephone at his residence ₹ 3,500.
j) Medical insurance of Mr. Sudeep paid by company ₹ 4000 per annum.
k) Employment tax paid by the company ₹ 1,000 per annum.
l) LIC insurance premium paid by the company ₹ 1,500 per annum on behalf of Mr.
Sudeep.

7. The following particular related to the income of Mr. Pavan For the previous year 2022-
23
He Is employed in a cotton textile mill at Bangalore on monthly salary of ₹ 25,000. He is
also entitled to a Commission at 1% of sales affected by him. The sales affected by him
during the previous year amounted to ₹ 40,00,000 . He received the following allowances
and perquisites during previous year.
a) Dearness pay at ₹ 6,000 per month.
b) Bonus at two months basic salary.
c) Entertainment allowance @ ₹ 2,000 per month.
d) House Rent allowance ₹ 5,000 per month.
e) Income tax of Mr. Pavan paid by employer ₹ 10,000.
f) Free telephone installed at his residence ₹ 6,000.
g) He and his employer contribution 15% of his salary to his RPF and interest credited
to this fund at 10% amounted to ₹ 30,000 during the year.
h) He spent ₹ 6,000 per month as rent of the house occupied by him in Bangalore.
Compute his taxable income under the head salaries for the A.Y 2023-24

8. Mr. Kiran is working in a private company in Bangalore. From the following details of
his salary compute the income from salary for the A.Y. 2023-24
a) Net Basic Salary ₹ 74,000. After deduction of tax at Source of ₹ 8,000 in the year.
b) DA ₹ 800 per month equal to 3 months basic salary.
c) House Rent allowances ₹ 800 per month but he is paying rent of ₹ 1,200 per month
for his residence in Bangalore.
d) His son is studying in a residential school in Mysore and Company paying education
allowance if ₹ 4,000 and hostel allowance ₹ 4,000 yearly.
e) He is contributing to RPF at 15% of Salary and the company contributing an equal
amount.
f) Interest earned on RPF ₹ 4,200 at 14% p. a.
g) Conveyance allowance ₹ 8,500 of which he spent ₹ 5,500 for official purpose.
h) He is the member of lions Club an annual membership fees ₹ 2,000 paid by company.
i) Kiran has a telephone in his residence for personal and official use and it’s bill ₹
5,000 paid by the company
j) He paid ₹ 510 professional tax

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 k) Cash incentives received ₹ 5,000.

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