8. Mrs. Bindhani, is working with T Ltd. receives the following emoluments during the previous year 2019-20: (a) (b) (c) (d) (e} (f) ) (h) (i) @ (k) Basic pay on 01.04.2019 % 24,000 (increment of % 1,000 p.m. falls due on 1st July each year). Dearness Allowance (forming part of salary) @ 100% of basic pay. Children Education Allowance % 600 p.m. (she has one child). Remuneration from Calcutta University as examiner @ 1,400. Medical Allowance % 1,000 p.m. and bonus @ 15,000 p.a. The employer provided a free furnished accommodation in Kolkata. Fair rental value of the house was % 4,500 p.m. and fumished with furniture costing % 50,000. She was provided with a sweeper and a watchman whose monthly salaries were % 3,000 and % 4,500 respectively. A free telephone was also provided by employer at her residerice, which was used by her both for personal and official purposes. She is a member of a recognised provident fund and contributed 14% of her salary. Her employer also contributed 14% of her salary to the provident fund. Interest credited at 13% p.a. on credit balance of provident fund % 6,500. She had taken a life policy for ® 5,00,000 on her own life for which she paid a premium of & 15,000 during the previous year. (Policy wes taken on 01.08.18) Employer paid her professional tax of & 1,000 p.m. She is provided with a 14 H.P. car owned ty employer and has been used both for the purposee Oe POTESSIONA! (AX OF TT UO (k) She is provided with a 14 H. P. car owned b: employment and personal use. yy employer and has been used both for the tire expenses were borne by the employer, Compute income from salary of Mrs, Bindhani for the assessment year 2023-24, Solution Computation of Taxnble Salary of Mrs, Bindhani for the A.Y.2023-24 purpose of her Particulars Working Details Det ‘Amount Basic [E 24,000 x 3 + € 25.0009] 297.000 Bonus | Allowances Denmess allowance Children Education allowmee 7.300 T7000 | Less: Exempted TON 12 1.200 6,000 | Medial Allowanee 12.000 ies. ws 1702) Rent five furnished accommodation TS% of salary” = Accommodation 94.050 = Furniture 10% of € 50,000 3.000 99,050 Sweeper heii 3,000 «12 36,000 | Watehiman fieility 84.500 * 12 “Telephone facilit xem Motor ene facility: T1800 «12 21.600 Professional Tax paid hy the employer 1.000. 211.650, Employer's contribution to RPF |__2% (being 14% = 12%) of salary” T1880 Interest on RPF in excess of 9.5% (6.50013) «3.5 1.750, Gross Taxable Salar Less: Standard Deduction ws V6(iu) 50,000 Less: Professional Tax ws VOC) 1.0007 i900 Taxuble Sulary [8.01 280 ‘Notes 1, Salary for the purpose of CE Particulu Rent free accommodation RP, Basic salary 2.97. 000) 297.000 Bonus 15000) Deumess allowance 2.97.00 2,97,000 Medical allowance 12.000iren liducation allowance = “6.000 : Tol _ 6,27,000 $,94,000 Mr. D, Podder. an employee of a private company in Kolkata (not covered under payment of Gratuity Act), retired from se-vice on December 31, 2022 after 32 years and 8 months of service. He received gratuity of £9,80,000. His salary at the time of retirement was 32,000 p.m. and dearness allowance was %6,400 p.n. (not forms par: of salary). His increment of £900 p.m. fell due on 1" July every year, Calculate the amount of taxable gratuity of Mr, Podder for the assessment year 2023-24. Computation of Taxable Gratuity of Mr. D Podder for the A.Y, 2023-24 = Particulars: Details Amount Gratuity Received El 9,80,000 Less: Minimum of the following is exempted as per Sec. 10(10)(iii): a) Actus! Gratuity Received 9,80,000 b) _Staturory Amount 20,00,000 ©) ‘4 * completed year of service * salary p.m. (4% 32 * 31,550] 4 5,04,800 se Taxable Gratuity __ | 475« Workings: 1. Completed year of service is 32 years. 2. Salary here means Basic + Dearness Allowance + Commission on tumover, being last 10 mor:hs average just preceding the month of retirement, as shown below: T | 1 2 3 a] s | 7 8 2 0 oun [ree [Laue | ape | amy [ aune [ suty [aug | sem] ocr} New Baton | 31.100 T 31100 32.000 32,000 | 32,000 ee t : Sp aaEsS - | | | 7 aa 3,153,500 _ ‘Average Salary 31.350Alustration 27 Mr, Rahul Kamar Thakur retired on 08.02.2023 loom & preven comoumy after completion of 30 years and 9 months of service. He is entitied 10 | month leave for each compueied year of service He Wook § months leave during his service life At the time of retwement his bass pay wan ©1600 pm and OA @ 50% of basic pay However, he got an increment of basic pay @!.000 pan tow 01.0! 202) He recemved 04.60.00 as leave encashment, Compute taxable amount of leeve satary of Mr Thakur for te AY 2623-24 [Assume DA forms part of salary) Solution Computation of Taxable Leave encashment Salary of Mir Rahal Kumar for the A.V.202324 Particulars Details | Amount Less: Minivnum of the following is exempied as per See IW IGAAK) a) Actual Amount Received[/b) Statutory A\ MOUNt . __ ¢),10 months * Average Salary p.m, (10 x 23,712) _ - 2,27,121 a yt mpleted year of ice Leave tak * salary p. _. | 7 (30-8) #22.713) 4,99,664 | 2,27,121 Taxnble Leave Enenshment_ 1,72,879 1. Completed year of service: 30 years 9 months = 30 years 2, Salary here means Basic + Dearness Allowance + Commission on turnover (last 10 months average from the date of retirement) Particulars May | June | July | Aug | Sept Nov Basie 15.000 1.00 15,000 15.000 isla 4 DA : so | 7.500 [7500 [7500 | 7500 | 7300 2.500 15.107 [comm Tool 22 it i ie ‘Average slay ie. 227.121 /10 months pm Wustration Mr. Sourav Sikdar was working with a company at a salary of % 20,000 p.m. on 31.12.2022 he left the job and received ¥ 2,50,000 as refund from Unrecognised Provident Fund (URPF), The amount of % 2,50,000 includes % 50,000 as accumulated interest, Both Sourav and his employer contributed equal amount to the provident fund. How the amount received by Mr. Sikdar will be treated for income tax purpose durinn the A.Y. 2023-247 Solution Lump sum received from URPF is taxable as under: %1,25,000 | taxable as salary %1,25,000 | not taxable, 25,000 _| taxable as salary 25,000 _| taxable as income from other sources {Employer's contribution Employee's contribution Interest on employer's contribution Tnierest on employee's contribution Mr. ishal retired from service on 31.10.2022 and received ¥5,00,000 as gratuity, He was entitled to a pension of €10,000 per month w.e.f, 01.11.2022. From 01.01.2023 he commuted 50% of his pension and received €3,00,000 as commuted pension. Compute his taxable amount of pension for the assessment year 2023-24, Computation of Taxable Pension of Mr, Vishal for the A.Y,2023-24 [15,000Commuted Pension _ Less: Exempted u/s 10(10A)(ii) '/" of & 6,00,000 * Taxable Pension 1, From 1/11/2022 to 31/12/2022; 100% pension is in uncommuted form 2, From 1/1/2023 to 31/3/2023: 50% pension is in uncommuted form as 50% pension being commuted, 3. Commuted amount for 50% of pension = & 3,00,000 Therefore, commuted amount for 100% of pension = & 6,00,000 Illustration 30, Mr. Surajit Roy is the Managing Director of ABC Lid, (a private limited company) in Kolkata, He furnishes the following particulars of his income for the financial year 2022-23: (a) Basic salary @%40,000 per month (b) Dearness allowance @50% of basic salary (forming part of salary for computation of retirement benefits) (6) House rent allowance % 2,500 p.m. During the year 2022-23, he stayed in a rented house in Kolkata paying monthly rent of € 3,000. (@) Children education allowance received @ & 200 p.m. per child for his three children, (c) Medical allowance received @ ¥ 600 p.m, (Actual medical expenses incurred by him during the year amounted to ¥ §,000). (}) He contributes 15% of salary to recognised Provident Fund. His employer also makes a matching contribution, [3.00000] 2,00,000 1,00,000 1,35,000 (g) _ Interest credited to Recognised Provident Fund @12% p.a. amounted to % 9,600. (ty His employer provided a 1200 c.c, car. He used the car both for official and private purposes. All expenses are bome by his employer. (He was provided with a servant for his domestic work. His employer paid ® 1,500 per month to the servant. (Professional tax of Mr, Roy @ % 200 p.m. was also paid by his employer. Compute the income from salary of Mr. Surajit Roy for the assessment year 2023-24. Solution Computation of Salaries of Mr. Surajit Roy for the A.V.2023-24 Particulars Working Details | Amount | Amount Basie 480,000 Alowmes SS s— 46.440 11.610 Interest on RPF@ 15% 7 _ 3,000 "Tess: Exempted upto (G.000/15) = 9:5% 1,900 1.100 12.710 _ 12710 SAL S24 50,000Professional tax 300 30.300 AD 224 1. Calculation of Basic Salary per month Period T_ Basie Salary pm. From 1/1/2018 to 31/12/2018 16.000 From 1/1/2019 to 31/12/2019 17,000 From 1/1/2020 to 31/12/2020, 18,000 From 1/1/2021 to 31/12/2021 From 1/1/2022 to 31/12/2022 From 1/1/2023 to 31/12/2023 2. Salary for the purpose of: Particulars RPF Basic 258,000 DA |" 1,29.000 9 Conveyance allowance : 9.360 Total 3,87.000 | 3.96.360 Encashment of past-accumulated leave shall not be taken in salary for the purpose of RFA.The following are the particulars of income of Mr. Rahman, employee of X & Co., a sole-proprietorship concern. for the year ended 31.3.2023: (a) Basic salary received (after deduction of tax © 4,000) @ 1,20,000 (b) Dearness allowance % 4,000 p.m. (©) Medical allowance © 5,000 (actual expenditure % 5,700) and travelling allowance % 7.200 (actual expenditure & 7,500) (@) Commission @ 2% on sales achieved by him. During the previous year 2021-22, sales achieved by Mr. Rahaman amounted to © 5,00,000. (c) He and his employer both contributed to Recognised Provident Fund @ 14% of salary. Interest credited to RPE. @ 13% was ¥ 2,600. wn He is provided with a rent free unfurnished accommodation, which is owned by employer, having fair rental value % 30,000.(g) He is provided with a motor car of 1.6 cc both for official nnd private purposes. His employer paid an expense relating to his private use amounting to © 3,000. (b) During the previous year, he spent 18,000 for medical treatment of himself in an unrecognised private nursing home and his empl loyer reimbursed the entire amount. (i) He is provided with free gas and electricity, market value of such facility is & 6,000 G) He appointed domestic servant (gardener) at a salary of € 00 p.m. which is paid by the employer Compute the taxable salary of Mr. Rah Solution man for the assessment year 2023-24. Computation of Taxable Salary of Mr. Rahman for the A.Y.2023-24 Particulars: Working Details Basic Commission | Allow 2 1.20.000 + 74.000 Deamess allowance Medical allowance used for office purpose) Fully taxable irrespective of actual expenditure 3.000 & i incurred. Travelling allowance (assume amount | Actual expenditure is higher than allowance Nil | Rent free accommodation 15% of salary" Car facility ~ 1.800 * 12 21.600 "Medical facility ~ 18,000 Gas & electricity facility i | _ 6.000 Gardener fheility Since house is owned by employer hence not _— separately taxable Nil 73.650 Employer's contribution 10 RPF | 2% (being 14% - 12%) of salary" 3.640 7 Interest on RPF in excess of 9.5% (2,600/13) * 3.5 700 4340 ______ Gross Taxable Salary __ 2,64,990 | Less: Standard Deduction u/s 16(ia) 50,000 Taxable Salury 214,990 Notes 1, Salary for the purpose of Particulars peeuirees Ror | Accommodation | Basic salary . 1,24,000 124,000 Deamess allowance : 48,000 48.000 | Medical allowance 5,000 = Commission 10,000 10,000 Total 1,87,000 | _1,82,000Mr. D submits the following particulars of his income for the previous yenr 2022-23 | Basic Pay (one month's basic pay Transport Allowance Education ental for two children Eneashment of annual leave | House Rent allowance (Rent paid by Mr. D fora house at Ranaghat € 1,000 p.m.) [Both own and employer's contribution to Recognized Provident Fund (each) | Interest credited to Recognized Provident Fund @ 15% p.a. During the previous year Mr. D paid professional tax Compute his income from salary for the A.¥.2023-24. [2009] [800 p.m. Solution Computation of Taxable Salury of Mr. D for the A.Y. 2023-24 Particulars Details [ Details [ Amount Basic pay __|__] [1.98.009 Bonus 16,500 20,000 "ess: Exempted uis 10(13A) being min, of the following: a) Actual amount 9.600 _. wane ef 'b) 40% of (@1.98,000 + % 39,600) 95.040 _ mt o) Rent paid. over 10% of salary (@ 12,000 - % 23,760) Nil 9,600 Nit — onan' ~Tétia) Standard Deduction (loci Professional Tax 30,000 1.600 Taxable SalaryIllustration 86 Mrs, Paramita is the Chief Account of a Limited Company. From the following particulars of her income for the previous year 2022-23, compute her income from salary for the assessment year 2023-24, Basic Pay on 01-04-2022, —% 18,000 p.m. (Annual increment of ® 500 falls due on 1" July each year), Dearness Allowance — 20% of basic pay. Medical Allowance ~ % 500 p.m. House Reni Allowance —-® 2,500 p.m. (Actual rent paid 2 3,200 p.m. for a house in Kolkata),Own contribution to RPF -¥ 6,000. (Employer contributed an equal amount). Interest credited to RPF @ 14% p.a—® 9,100. Life insurance premium paid’by her employer —& 6,000. Professional tax paid by her employer —® 1,600 Solution Computation of Taxable Salary of Mrs. Paramita for the A.Y. 2023-24 _ Particulars Details | Details | Amount Basic Salary [ 18,000 *3 + 18,500 * 9] 2,20,500 | Allowances: : Dearness allowance [20% of € 220,500] _ _ _|_ 44,100 | | House rent allowance (@ 2,500 * 12) | 30,000 Less: Exempted ws 10(13A) being min, of the following: a) Actual amount received 30,000 1b) 50% of salary (¥ 2,20,500 + € 44,100) 132,300 _ |_)_Rent paid over 10% of salary (% 38,400 — € 26,460) 11940 | 11,940 |" 18,060 Medical allowance [% 500 * 12] 6,000 |__ 68,160 Perguisites: [ LIP Paid by employer Ee 6,000 Professional tax paid by employer z 1,600 7.600 Employer's contribution to provident fund 6,000 Less: Exempted [Max of € 6,000 or 12% of (® 2,20,500 + ¥ 44,100)] 6,000 Nil Interest on provident fund @ 14% 2 9,100 ~ Less: Exempted upto 9.5% [8 9.100/14% * 9.5%] 6175 |__2.925 | _ 2.935 Gross Taxable Salary = 2,99.185 Less: Deduction u/s 16(ia) Standard Deduction 50,000 ‘| 16(iii) Professional Tax mae = 1,600 | 51,600 Taxable Salary I 2,47,585