clairning

the thetaxand as Compute 6,00,0007,08,000 57,500

60,000
48,000 6,50,500
thethe to be :2022-23
F.Y. as
salary
p.m.
69
to or
in to allowed
Profession
Within callings O.R. outstanding
year; 5,000
included
subject is 2,500/-. : basic
amounts R& employee
previous employrnent 50,000
2,500
5,000
is for trade, as
e.g. :
be him (ii) all salary; Status p.m.was
law. is government 2023-24.
to to following
the at Professions, paid 33,000
16 Previous
Year 5,000.
.:.
7
is considered basic 2500
it allowed during onany tax Residential
employeru/s
taxunder Profession
as ? ? A.Y.
: deduction
the him deduction.
here-in-below Salary of of
be a on p.m. an
of of or Komal receiptthe
his will by be Tax to less. tax
least account
leviable 50,000 following
bydeduction received to allowance. from for
not State Ms. is in Profession
Nayan
less. assessee Allowance The as whichever is
48,000
allowed Income
discussed is on constitution, Assessee:
receives company
is : allowance entertainment Maharashtra
assessee 2023-24. the Mr.
whichever
()1 a Employees entertainment
thethereafter is of Received allowance.
of
of least 1,20,000 salary
16 to section Entertainment less, (iii)] service the Computation privateSalaries
granted
[U/S entertainment thethe 16. A.Y. of Particulars Entertainment
Allowance
(W.N.1)
: is is cross
Salary and this income whichever 16 by of under u/s
spent
towards as for Name
Government 4,000p.m. deduuction Allowance
from
Allowance Government = a
is under Government
Employees
only.
or [U/Spaid276 available p.m.Komal 6,00,000 or of entertainment
salaries
allowance salary, employee (Deduction) p.m. 40,000(Deduction)
manager
Actual salary article 4,000
Income
sum
Employment :
Individual
2002-03 of year,
stated Ms. 2023-24 5,000 16 Standard Net
Taxable
Salary Allowance Entertainment
deduction
basic deductionsin @ u/s
head amount anyof Employments
1975.
Act, Allowance
17) or Entertainment of the is andof Profession
Tax salary is Compute
entertainment
limits per Amount
actually of (2)the p.m.@ Gross
Salary
Deduction deduction ias towards
to 50,000 the
from his who Salary Allowance
:
noted
case : allowances :
15
(Sections and
A.Y. of
Actual
deducted
5,000/- by clause
deduction
6.1 50,000
basic
Entertainment : who
6.2
under
Fromthe
1/sth on paid Discuss Komalfrom
Illustration
Assessment
Year
Entertainment 5,000 Actual Nayan 2023.
onditions deduction.
Tax of Income Status
Legal :
be of Standardllustration
D.m.
Salaries Solution to
If
A7.2
income In a) b) c) :Note 6.7.3A
meaning
is
which 10.
Ms. dearness @ DearnessLess ST
March,
Salary ii) ii) Points a) b) c) Mr. 5,000
1. 0. the 1
1. 2.
 upper
snnualfixed.Government
deduction
exceedingsalary
3
2 No. Sr.
Employer's 1. "Salary" : 6.8 2. 1.
t Any Thus limit isThe Points
retion
ear retirement
accumulated
balance Refund Provident|Interest
Fundcredited to Status
Legal Solution 70
taxable. Contribution EntertainmentSalary Assessment
tribution from for under contribution Particulars government
The TAXProfession
Entertainment Entertainment
Allowancei ) i) Less
to (33,
o to the and1,50,000 following
TREATMENT Taxable
beSalary
Profession Tax Salary
Net deduction
Standard Gross:
the by AY 10% Similarly, On noted Deduction 000 Year
purpose fromTaxto tax x
ce way 2021-22 National is Wholly
exemptof employee is Allowance
of of fromTax 12Individual :
in treated Wholly fromTax
Wholly information allowance
allowed : :
of salary the Statutory
Provident months) 2023-24
excess of any Fund OF u/s
nterest, deduction a Pension employer and @
as
the combined
contributedcontribution as exempt exempt PROVIDENT 165,000
edit of perquisite hencea
deduction Particulars
is deduction Computation
to
"Salaries". excesS9.5%
taxable excesS useful no x Name
ividend shall it Scheme
of on to conditions. from
Wholly Wholly taxable
"Salaries". 12%
Wholly 12
Provident Fund deduction is months of
he upper the by in tothe of
Recognised FUNDS on
allowed
be Tax the
p.a.
Overexempt
me taxable or imit amountother(NPS) theaccount any over it, is
exempt
salary,
while payment ofAssessee
Subject is
1s any hands
approved exemptEmployer'certain s computing to to Income
of under it,is under be
employer. of Any upto any upto basis
government
Other in of for provided. :
7,50,000 of an from Mr.
contribution
the 14% sources".
other
fromInterest
"Income
taxable
under
contribution
Employee' thereontion
exempt. issunder and
ould
amount employee. employee Exempt Exempt Nayan
in superannuation the not
hands Howerver, of Provident Fund 8alary
the for on
employee PreviousYear
be salary and Unrecognised taxable Residential
from from accrual
tal enmployer' Also thereon is
eatedsimilarof ofs made in Tax
e the "Salaries"contribu- Wholly Tax
there
contributed an RPF a taxableTax.interest
exempt from income basis. only.
by fund OWn Status
as
employee. assessee is 50,000
nature the was
exceeding Mr. Note Note
uisitecontribution by exempt
Tax. Wholly 1s No under : :
employer.
contribution Nayan 2022-23
F.Y.
Provident R&O. R,
employer. no the
during Also, combined allowed by is made by Fund Public
4,06,000 4,56,0003,96,000
employer the ís 50,000 60,000
to Central 12% from
not.
head
the the any was a of
 6 4. 2 1.Iromthe D. C. A.
D.following
llustration B. Salar
COMPUTATION
Assessment
StLegalatus Year : 6FOR.9
Bonus ? SalaryCalculate i)
Salary
i üi) i) Less Gross Interest
Amount excess Payment
Employer' the benefit/Amenity
Employer'
s Compensationand s Profits Premium Benefit/
Fring Concession
Employees PerquisitesRent
free
Entertainment
in Allowance
Renttaxable Servant
Allowance
Received Fixed
Allowance
Lunch
Compensatory
AllowanceConveyance
SpecialAllowance Less
H.R.A. Bonus
City Less Allowance
Dearness
Allowances LeavePension (including
Commission
AnnuityGratuity FecsBasic(Gross)
Salary
contributed
ary4,600/-. d Employees'
Income-Tax
pai1,200/-.
Taxable
Salary
Net
Professional
Entertainment occasion Interest FORMAT
Tax Standard :
Allowance
Medical : :
of Deductions of in ExemptExempt (Taxable Salary Salary/Wages
@?9,000/- the 6.3 on exceeding Amenity
Accommodation
received 12% received for
lieuobligation arrears
: contribution
ld contribution employment contribution thereon of
the particulars
of taxable:
(Excess deduction period (Taxable
portion)
(Taxable(Taxable
portion)
ofDiwali received of (U/S (U/S on
of same 12,400/- Tax Basic granted
under9.5% for salary Receipt &
ees per income Allowance or (U/s for Allowance10(14)]10(13A)] advance
outstandingreceived
or discharged
amount tomonth.
Contribution Salary from Life portion) Computation
the and (U/ S (u/s. Keyman
16) p.a. to
Christmas to free Particulars Name
under Recognised unrecognised of basis)
& Profession
which
recognised the ofcost salary
paid 16(i1)] (U/s16()) Employee/Annuity of
the Insurance performance employer by the OF
by 16(i)] to recelved) INCOME
was head employer
specified Assessee
ployer Tax to Provident of
provident
in P.F. Inoome
ly of? "Salaries",RPF) Policy
excesS
2500/- of employee FROM
fund Fund duty from
0/3,-6. 00/-. of of
the was was Mrs SALARIEs
in or Year
Balaries Prevlous
deducted on Residential
Status
amount
11,280/- Sunita

prescribedduring at for
source. the
the assessment XX XX XX XX XX XXXXX XX
XX
under year.
the
Emplover year
Rules 2023-24 XX XX XX XX

also
by
 Income Assessment
Status "Salaries"company
Legal Solution 5 4. 3. received
2. 1. :
Illustration 3, 2. 1.
Points Overtime
Wages
Arrears
Salary of Bonus
Perquisites
Employer' Status
Legal Solution 9. 8. 72
25,250. @t9,000s p.m.
ofSalary Assessment
Year:
2023-24
On Reimbursement Ex-gratia
23,300/-.
She well FeesSalary
paymentSalary Mrs. Standardsalary Employer's
prescribed
Income b) a) the
Less FreeEx-gratia
a) lunch Free
Salary Salary Less Overtime
1,2Wages
50/-.
Arrears Value
from deducted todeduction
Standard
Taxable
Income
Salary
Profession amount
u/s Salary
Grossholiday ofthe She was as for Samata :
: Year Mrs. basis for in chargeable Deduction: contribution
Deduction @46,000 in salary was
provided : ofrentof
attending lieu @ 6.4:deduction Rent
Tax noted: be Accommodation free Gas,
16() lieu office Rules Salary
Samata 46,000/-per contribution
deducted ascertained
of also is
profession
salary free
Individual : : of Individual :
Standard home of
2023-24 the of (Employee- a Tax Water
: director to of as
u/s leave provided free use). carBoard leave wil Particulars accommodation
per
facility per fabove
or u/s tax.
be u/s u/s Household to
the holidayexpenses month. 16(i) at & revised
month Tax 12,250/-.
Meetings in 16(ii) 16 Electricity recognised
under
eduction 16 information with sourcetreated theto
Particulars
Computation assessment M/s Computation
Name of* is Name
home as
Director) 40,000 (TDS)recognised
Jagdish Employees the pay
of
2,500/-from free respect in ? salary scale
lunch 21,750/-. Provident
Supply prescribed of 10,800/-,
the year you facility the
Textiles or u/s
of Assessee 2023-24. are facility of Gross 12,400/-Provident of Assessee
Income office 17(i) 14,750/-.
requiredsalary at Income
Dehradun Pvt. Salary rules
Fund
during use
(vi).
: during is Fund
Mrs. Ltd. not in :
from to whichever from Mrs.
Samata compute office 43,000/- During required in exces
the the excess
Salary Sunita
Previous
Year previoushours total Salaries
Residential (She the Previous
Year
the cost
is to of Residential
year less. be the 10,8001,4003,600
taxablecosting?
year. used
of ended considered amount
5,52,000 Status: which her
0,000 25,250 23,300
12,250 income15,800/-. Status
own 31st
was ascertained 50,000 14,750
15,800 14,600 1,08,000
2022-23
F.Y. : 2500
R. car March, in 1,55,600
1,250
under R&O,R.
2022-23
F.:Y, :
& ascertained
The for computation
6,28,600 0.R.
15,800 themployer
e herself 2023 1,03,100 Direct
Tax
under 52,500
head 1,200
at as she the
 llustration
(Govt. : Net 1.
Points facility
Salary ClubSalary Status
Legal 8. 7. 6. 5. 4. 3. 2 1.
Assessment
2023-24
Year: Solution tfhoer Points Sylaries
particulars
income perquisite AS Salary
Add :
Calculation b) a)
Less Mrs.
Mr. in @? assessment
Compute SheSalary CluProvident bLIC.ProfessionIncome Net informatliounstration b) a) An
u's TheDoard
the was employee to b)
Net
toStandard
Profession lieu fees Salary more
An having employees. a Reimbursement
value which (Sections
Ajay per be Deductions
:11,000/-
inpremia Sushila
for director, orA 17(2). meeting Income
8alary
from u/s
facility 4. 3. 2. 1. given Tax employee be
of 6.6
chargeable month noted: Taxable of on lieu met fund th e 6.5 voting she
working
his who
was Income
to leave Tax
deducted per the of 16(i1) 15
Profession
L.I.C.Deduction of of Si nce Fr ee noted:
of Gross Individual : year the car deducted by
contribution deducted month assessment Salary)
(Gross 1s : is any fees uses to
P.F. deductionTax per leave substantial
carpremium 2023-24. basis employer employed drawing power, regarded lunchis of
Profession 17)
Income for Mrs. benefit for car
per Tax u/s u/s : month wil
towas Salary of her at her
relating Tax
month. in from source
at or Samata facility notexpenses
Employee tax. given deducted 16(iii) 16Computation of above
exclusive year as personal
respect from u/s Particulars deducted source with salary interest a or be
as deducted
p.m. per Name salary specified Tax
to 16 per 2023-24: being amenity taxable
to Particularsmonth information M/s. and for
Commissionerthe e- her of at Salary (i)
of use per permonth
excess
in in
use. the
year frommonth th e holiday as
for contribution at source the during month Alliance employee specified granted Therefore, purpose
Gratuity Source employer income
ending her Assessee salary of?
Income
from taxable home
p.m. office
of exclusive
per Engineers 50,000/-. employee free from of
on -
Labour p.m. company, if thereoffice
: incomehours month he facility of
3Ist
Pension) Mrs. or salaries
she cost is
use Sushila only. wi l
beit nouse
March,retired Salaries under Pvt .
is, perquisite.
during i.e. taxable
in as is
not
on Previous
Residential
Status: Year Ltd. holding respect it the
2023: 31st 3 the taxable is
1s office head, She not
December, shares
equity y inof income.
onlreceived
hours provides specified
herin
"Salaries"
2,52,000 the Employee
50,000 as
only, 1,800 6,0006,000 hands. 2,500
2022. you hands
person an
2022-23
F.Y. : carrying2070Or
it O.R. &
R of empo
Following will Mrs. the owns
21,000
2,12,200 2,64,000 following
specified ofis 5,76,100
not 1,000 19,050. 51,800 taxabe her 52,500
200
Sushila 6,0006,0001,000 600 19,050
150 200
150 600
be own 73
are a
 Note Salary
Gratuity Assessment
Status
Legal yearSolution as
salary Data 3. 2.Points 1. Arrears
Salary
Pension 7. 6. 5. 4. 3.
salary,
Illustration Entertainmentof Salary Status
Legal Solution
Assessment 2 1. 74
Amount 1. i ) i)Less Less Systems Ms. 5,000/-. b)?deduction
a)Deduction(10A).u/Gratuity i)
i) Less average.an
during c)employee: s10Any
HeHe due He DuriHe
alculation to amount 11,
You 5in00/g -to . ng 9,0received 00/-p.
Salarym.
Profession
Taxable
Salary
Net tax Salary
Standard Gross profession Jyoti, Actual /5 Income
Entertainment deduction
Standard
Salary
from
Allowance ?3,800 9,000 on Entertainment
: : payments be : are incuredrecei ved recei recei
v es v ed
exempt DeductionExempt the and th Year every the
is6.7 is
receivednoted Deduction required
last amount of of allowance
p.m.
p. m .
deduction 2023-24
Individual : : ta xreceives not : Basic
ascertained Individual : : arrears
the last month
from u/s 10
covered
(Non 5,000/- for to
uncommuted
of
in at :
u/s for 2023-24 1,day25,000/- allofowance
u/s16 deducted months onSalary 9 expenses
tax
Gratuity 10(10) commutation the 3
months
compute of of
January,
Entertainment in time months
16 1,000 sala ry the
is 45,000 Govt. by - on
(Max
the received
least Computation respect his mont pensi
h on
(Note1)Particulars was Employee of the
the of Particulars Computation incidental val u e 2023
Name service 16,200/-. p.m . Name
of 50,000) Paymentas retirement taxable 13,600/- atfrom ofhe
the 2200. gratuity
basis of of
for the
was of to
following : of Allowance Entertainment pension
9 the on rat e received 1000
commuted
he
tDetermine of in come
of -Gratuity) of the by months of employmentGovernment
24th ofR per
Assessee after
2,200.Gratuity the Assessee
Income Income month.
received least received for March, pensigratuity o n
Till
a Government the 3, 8 00/-
the service Act, Allowance of : with
: the from Mr. such 2023. He
from Ms. amount the by assessment amounting
pereffect on spent
date of 1972 9,000/-. Ajay
Salaries Jyoti following employee the Salaries asmonth. 12th
40 from on
Previous
Residential Year ofyears ofretires u/s
Government PreviousYear
Residential
Status: purchase January to
taxable her year
16(ii) Ist
entertainment
retirement during three is 2023-24. 85,
l January, 2023.000/-.
salary. month. isexempted of
Status sums books,
F.Y.
allowed.employee
17,500 44,000 45,000 she Her 50,00013,600
5,000 11,4009,000 81,000 2023 800/-
2,200 2022-23 being u/s : car
:
2022-23
F.Y. : received average 2022-23
R This 10(10). O.R&
R. F.Y. expenses which per
& Government is
from
DNC 1,15,000 becomes month
O.R. amountexempted 55,000
60,000 axes

17,500 monthly
17,5001,000 16,500 16,500 ete,
Ni of
Sem.-V)
bDirect Pension
TaxesUncommuted
800 2000 Assessment
A.year Solution
Status
Legal Salary
31-10-2022.
Sl-10-2022Ilustration 2. 1.
Points Received
Gratuity 6000 5000Salary Status
ASsessment 500 Sept.,
Legal yearSolution {67,he Salaries
x b) a)
under retires
NileshMr. Average
Salary = Calculation
6000 5000 . c)10,00,000 a)?
Least
b)Calculation ProfessionTax i ) Less Less r
fofor6 paidpa
5 7x . 2,A
2002*
b)
to
employluerstratiMro. n
months Gratuity
Gratuity Least
Actual
,x5,400 1 Taxable
Salary
Net Salary
Gross 5
? 202 is LeastActual 10,00,000 ?
months the he x x of be deduction
Standard : : 2200 company
With 5 6 DeductionExempt months months paid . and Manthan
6.9: months the noted
following used months ofamount of thereafteras of
(1-11-22 is is effect t he following of Compute
6.8:Gratuity
the
(1-4-22 Individual 2023-24: : Average (W.Note Exemption Individual : profession is
received
not to (Non u/s upto upto 2023-24 : tor (Non 44,000. 40
x
get (1-10-22
(1-04-22following : not above
received Surya
from 54,000 u/s a
two from of 10(10) 28th 30th taxable period covered received -
to to Govt. 10 Salary :
by
circumstances5,000 Gratuity Pt. 16 tax.
6,000/- Govt.
31-03-23) to to of Feb., 44,000/-.
31-10-22) by Mr. Nov. =75,400. 48,600 2) Computation
Sept.,
Particulars
Particulars Employee 31-01-23)
30-09-22) x Gratuity [W. Name
salary Employee of by R
Name .
MrNilesh p.m. preceedingReceived per 18 45,000
Computation Foundation 1, 18 Notel 20232022 Payment
Nilesh as2022 is
(Completed of month.inyears
of exempt the
the salary,
: his
he - 24,00030,000 =
= date ofAssessee case and of -
Assessee Pension) on 67,500 On
gets 54,000 of u/s Income Gratuity10
of ? Yrs.) retirement for Gratuity)
31-10-2022.
3,000 60% Retirement10(10)
Salary : themonths.
: = Mr.
Mr. p.m. of from assessment Act,
48,600 Manthan he
Income Nilesh pension He
retires
as He 8alaries is
Residential
Previous
Year DA. Previous
Year not was
gets Residential
commuted
yeardrawing in on
Determine pension receipt 28th
2023-24,
Status:
Feb.,
Status: of a
salary
the for of 50,000 48,600
2,200 67,500 30,000
30,000 pension
on 2023
4,00014,000 the
2022-23
F.Y. : amount of2,000 ? 2022-23
F.Y. :
R& 30,000. of
R.& assumption but after ?
0.R. p.m. 5,000
serving
52,200 78,900
26,700 18,900 60,000 O.R. gratuity
18,000 taxable Prior
up that upthe
75
to to of to
 Illustration
6.10 2 Points
1. Commuted
Pensions 2000
Uncommuted
Pension B. 1. 76
800 Points
vi) Standard Less
Less Received x x
Commut
Pensiedons
Compute vii) v) iv) ii)) i ) i) Mr. exemption
10(10A)u/s When Computed When Commuted Less Recei
Less ved
to months
5 7 Exemption to
Educational
Tuition{55,950.
Annual personalMotorFurnished
ValueDearness BasicRaghu Taxable
Salary
Net months Taxable
Salary
Net Salary
Gross: :
Gratuity be : : be
Deductionu/s Exempt Gratuity to
the deduction noted: Deduct
car of salaryjoined value u/s valunoted
e 31,333ion Exempt
membership
income fee use.furniture (1-11-22
(1-4-22
per accommodation
owned allowance is30,000
60 u/s of : u/s
facility received of 10(10A)receivedis30,06000
Self-driven 50,000 a Full Full
for u/s
month company u/s =50,000100 x 10(10A) x
from in to to Salary 10(1610A)
by 16(i) Pension 31-10-22) ’ 10 Pension
for 50% per
16 31-03-23)
salary fe the the (Standard = (Standard
600 two
for accommodation by of at is (Note Particulars 50,000 less [Note
employer owned month. Chennai 16,667 50,000¡x ;of
Gymkhana of children and Raghu. basic 50,000/ 25,00050,0005x of Computation than
commuted 1] 1]
Mr. commuted
salary
by Deduction) Deduct
50,000)ion
Raghu 1,200 Expenses(withcompany on or
provided 01-07-2022
Club
respectively. (eligible Gross value
tor engine
2,00,000 value of
paidby
the was Salary Salary of Restricted
reeincurred of
assessment capacityprovided for Full Full
of (cost).retirement and
the whichever Income
cost. by was
Pensiono Pension
employer employer
The less at paid
year Chennai.
than benefits). the is
school less.
2023-24
20,000. on1.6 folllowing
is litres)its
owned running 25,000 30,000 14,000 16,667
4,000
given emoluments:
by and
ia
the
maintenance for 30,000
13,333
31,333 31,333
23,000
23,0005,000 18,000
company. exclusive Ni
Nil
 Points PerquisitesSalary Assessment
Status 2023-24.
Legal year Solution A.Y.
Les thisIn
/s The essEducational Rent
Medical You g) c) b) a) He Income Salary
from :
Ad : problem, FurnishedValue of
spital to
Holiday Sweeper, Gas,Facility
(Note)MotonCar (9,000 ) e) d
[lupst.m. ration exclmaintenance Value 0 rnes Basic AsStLesgaetslums enSolt ution Salaries (
usively (2,0 ,0 0 =4,ValAd5d0,:ue(0f00ormingpart AlDeloawance
Salary
from 600 institution
was Education Sweeper, Gas, Medical Rent usedMotor gets
Mr. Deduction Salary
value Income
be : Water free are Holiday Pravi n x
x the +
ned notedDeduction tripAccommodation 3 x requiredborne to water free for perquisite for of
10%2,25,000
of Year
of Cook 12) following car 6.11 used f 50,000
Persons and personal Kothari
fac1lity perquisite
expenses retirement
amember
ny for
facility Individual
2023-24 : : trip accommodation
u/s x Salary
and by isfor Cook and is : for 9/ Individual : :
: self Electricity for provided (Perquisite) Accommodation@
12) = 50% @ 2023-24
u/s16 employer.23,000/- children 16(i)
personal 6,75,000 Particularsx
medibycal x ascertain self Electricity and provided is 9
for
and Watchmen purpose further incurred for Basic
the 12 Watchman working Standard benefit)
children Name and furniture of
(Standard family months f or motor Computation
treatment at Particulars which
familyprovided x Basic
oyer the bills at in benefits. is use 15% Salary Name
Malegaon Computation both in
@ of Malegaon. hospital ? bycar
the income provided
isamounting 12,000. Kots Deduction Salary
600 provided. treated official employer provided - 15%+ of
shal l deduction Assessee in running D.A. the
provided each school belonging Foods of
chargeable Perquisite and ofAssessee
not as at Salary
of Cost
taxable a to but income
beto : n
rusalary personal a and
the u/s Salary Mr. proprietory car
treated of 15,000 to
such by Value the :
16)I Pravin toperquisite
from Mr.
tax employer. of
employeeas Income femployer
or purposes Raghu
taxable stay 600/-
under of concern salary
Kothari Previous
Year
Previous
Year andvalue. personal which Residential
or Residential p.m.
erquisite any Income
headthe travel Cost value with
each. use is drawing
ofascertained ofdriver.
is is
Status such paid facility 1,01,250 Status
in 20,800/-. Perquisite Basic 15,000
the of 20,800 23,000
21,600 15,000 21,600 12,000 education by
employer. availed to 2022-23
:EY.
:R&
hands his 2022-23:F.Y. : from ? Salary
R& The 21,600.
family, value
1,08,000 0.R. Salaries entire of 1,16,250 2,25,000
4,50,000 0,
of 1,72,0002,22,0001,14,000 in 19,000. 55,950
employee 50,000 50,000 R.
similar of 9,000 ? 5,950
in 77
for cost car
any
 10. 9 8 1. 6 5
4 3. 2. 1.you
Illustration
6.13 : Points Concession
Travel
Leave
BonusAllowance
Entertainment House
Rent
Dearness Basic
Status Assessment
yearSolution 3. 2
Legal assessment 2023-24.
year 1.
2022-23 78
Employer You abroad Received He Commission
Perquisite
Education Dearness Basic the Deduction ProfessionTaxiii) i ) Less i) Less
Sales24,000/-.
Bonus Mr. Less Illustration
was following to Salary deducted
You expenses He respectDuring receivedHe
are during Ramesh Income
Salary
from deduction
Standard
Entertainment a) Mr.
Salary be : : Allowance 1, are spends are
required96,385/-wasabroad Deduction
Exempt Exempt :
deductedEntertainment Allowance value Allowance noted ?13,000/- as
Deepak
the on in Allowance required at onfor ofthe
@14,500
information isrespect source follows 6.
on year sales the 2023-24
Individual : : hivals ue year
is12:
to of Allowance) (Salary + : u/s u/s entertainment e) d) c) b)
profession company's car Sales u/s to Kashmir of he : an
compute reimbursed 1,500 of Allowance Particulars
p:m.
700 p.m. from 14,000/
Bonus of?
@ ? @ 10(5) 10(13A) ascertain received
Leave Entertainment House
Dearness Basic
(Allowance)
Allowance 32,01,600/-.
27,540 10%. Entertainment
for
p.m.Manager 16
employee
1,300 1500
for his
taxable p.m. the Tour. Rent salary
tax work Computation 12 salary Travel
being previous p.m.) Name the 1000
to per (Refer months 24,5 00/- Al loAllowance of of
wance
@1,825/- of income @? TISCO
2,500/-
salary him. during month. s p.m .
Concession Allowance
used M/Allowance of 13,000/-
Note) the 2, 500 on as of?
"BALKRISHNA year since
offor the(Exempt for of Assessee chargeable an L.T .A . of?
ending Income p.a. of? 1,700/- p.m.
Mr. the month p.m.personal average is 2006.
Ramesh year is for 1,500/-p.m.
1,5 00/-
since u/s on
not
: to
allowable p.m.
of purposes. allowed from Mr . tax for the
2022-23. 10(14) 31-3-2023. p.m. Particulars
for February, lst FOOD Deepak under
entertaining entire
the January, Salaries as (Exempted
? to PreviousYear per
family
ent 1,200/-) non the of
PRODUCTS 19,500 24,500 18,000 Residential
9,600 head Rules. his
2023. 2023. government the to ?
go 800 income
Expenses income visitors. Heto p.m.)
year Status
1,56,000 dul y for
Pvt. 50,000 14,000 Kashmir.
-24. employees. 2,500 2,21,800
5,000
18,0008,400 20,400 from the
Ltd," 2022-23
:F.Y. : Profession incurred19
incurred R. Financial
&
salaries Exemption
He
1,69,300 0.R. Tax
provides 52,500 xes
by for s0 Year
t e
him :
 Salary
Gross A. Status
Legal terms.
vOaputation Assessment
2023-24
Year: Solution (2500(30,000 1.
1. perquilustration
sites 6.14 Points Cntertainment
Alowance
Commi
Asset Kent
FromAllowance 3 2.
AddDearness
Bonus BasicFrom Compute EntertainmentDearnessSalary
Basic Prior Mremployee.
Perquisistsie oSalnBonusesonBasic
as Perquisites 1. Emoluments
: the
. XEntertainment ProfessionTaxi1) Less AlEduclowance
ationthe AlDeloarwance
rent Reimbursement to
nesSalaryInco@
me AsLeStsgeastlumsentSolution Salari
free Perq : (50,000 profession asJune toTheAssetFurnished Income
Salary
from from
1,00,000 AB Leave jined
as a deduction value
the his
company free under beStandard
Deduction : Year
rnished Allowance
uisites Ltd.
of @
Total 1, employment owned noted: Salaries
Individual : taxable Salary 2022 furnished : of 14,500
x tax Allowance accommodationAchiever) Allowance
DearnessBasiccompany:
(Target
Bonus allowance car
x 10) of Individual : :
paid by taxable
extent to 2023-24
10 Income 2022-23. in he
th e actual u/s :
salary pay 1,500 p.m.
odation (20,000 respect accommodation
medical
withcompany 16
Computation receives since deduction
AB expenses
of Computation
Particulars
from Mr. AB Ltd. p.Particulars
m.
x of 1996 owned Name
10) Name the insurance
X earned Ltd., for on
Salary incurred is
for monthly official June allowed of
he was by the
of of the leave
was
premium the
Total the 1, of Assesse
assessment and employer
2,20,000. ?1,00,000 2022 abroad Income
Assessee pension
at 24,000p.a796,000
. 7 p.a . working to
his personal 20,00050,000 Government
6,000p.a Mr. and
Income credit. in
as was Mr. :
: year of X and respect from
Mr. amounting a use, Ramesh
He3,000 Central provided monthpermonthpermonthper paid
from 2023-24.
X employee Salares
received the the of Prevlous
Year
Previous Residential
Status:
36,000
10,00,000
17,0,000
2,20,000 2,00,000
5,00,000 Residential
Salary from Government to taxable following company' s
free
the only.
Year 1,20,000 15,000.value of
Status: Government. cost. emolumentsand work 3,20,160O 1,74,000
19,56,000
2,56,000 employee being Taxable 50,000 27,540 24,000
14,400 18,000
as is 2,500 6,00,000
21,900
:F.Y.
2022-23 incomethneot 2022-23
FY. :
gratuity 36,000. R&O.R.
&0. R He on value
following S,47.500
52,500
R. and
received allowed
of
paid this 79
of
 Points
1. Profit Bonus An
Salary Income
Salary
from Assessment
Status
Legal Solution
assessment
2023-24.
year 4. 3. 2. 1.
entitled terms
employerIllustration C.iii) deduction
Standard
i ) i) B.
Award Net
ProfessionActual
Maximum 3.
Allowed2. 1. LessGross
Salary
Total 2.
deduction
Standard
in Profession
Gross Less
Tax b) a)
Compensation ProfessionTax Salary
Add Net Compensation during
You Diwali An
Days. 8,000/-. Net yearthe ofMr. 2. 1 Entertainment Basic
in of Bonus for During for
Monthly
Dearness From
1/5 Entertainment
computation to the contract Taxable :
Taxable : are award Salary s.
M/Mahendra MediclaimLeave
Salary be : lieu from March
PF Year period salary of
Deduction 00
Deductions 6.15 tax Basic (96,0Central
noted of contribution required Pension
the 2023 monthsfo11
r of of Milan salary Salary WorkiNotnge Allowance
salary appreciation of of Salary paid
x
before Income Individual : : of is : Allowance
Salary
of employer
for 2023-24 39,820/-after 1l ended4,000 p.m. employed (Profits Premium u/sAllowance 2/
taxable : on to Traders,
becomes 10(10AA) (A-
Government
(3,000 12)
u/s
modification 6,000/-due months 16
deduction Due ascertain on (16,000) (6,000
from Deducted B) x
income. 16 31 the in Paid (Least
Basis Computation
Particulars Name
of? from st due with lieu & (24,10)000 x
Salaries Salary
Gross the to deductionMarch, salary by 2/12)
of 4,000/- April, on the of
the M/s. of Gratuity
x
PF of of taxable the
of Salary)Employer following)
Contribution terms the modification 2023
Milan 2/12)
for 2022
of March last 10(10)
of Assessee income showing day
and to PFhe Traders
Income February received
contribution 2023 of is -
conditions of every not
Exempted
& : under terms the to at a
Mr.
Protession
shouldTax from presence 2023. from May
month.Opera taxable
Mahendra the and
ofthe 2023 fully
of Salaries head
conditions House,
employment Residential
Previous
Year 3,520
of employer Due perquisite. for
"salaries" mind was
to Government 4,0005,0003,200
and the
paidMumbai,
of and as
Status: the Profession on
follows financial
be of saved
contract 3lst since 50,000 16,000
30,0004,0001,000
taken 45,540 39,820
Mr. Employee. 2,5003,200
50,000 4,000 2,2003,520
2200 F.Y.2022-23 : Mahendra the : Maycris1S
into Tax 2010.
R of shop 20,07
90 Tax
Direct
& 19,51,30 5199,
consideration service. of 2023.faced As 557940
O.R. ?
from
67,5406,000 49,540
4,0008,000 for 2200. Hebyper
15,352,200
40 fire i the th.
the
 Salaries (Sections 15 to 17) 81

2. Income from salary is considered either on acerual basis or on

Hence salary for March, 2023 is taxable receipt basis which ever occurs eame
income on accrual basis.
An award of appreciation, as it comes out of the
3
receipt under the head, "Salaries". relationship of employer and employee s tasaue
4 Compensation for modification of terms and conditions of employment is profit in lieu
u/s 17(3). of salay

Tllustration 6.16: (Basis of Charge)

Mr. Dilip is employed with M/s Sriram Tyres As per the
paid on l Oth day of the next month or on the earlier day if thatterms of employment,
day happens salary forDuring
to be a holiday. the month
the yearis
be received salary @r 3,500 p.m. for the period 1-3-2022 to 28-2-2023 Bonus was declared a 20% of salary
excluding perks, if any. He received 6,900 as arrears of DA, Leave Travel Concession received was
3.000/-, however 2,100/-are exempt u/s 10(5). He receives H.R.A. @ 500 p.m. (? 400 p.m. exempt
wls 10(13A). Received 81,450 as reimbursement of expenses incurred by Mr. Dilip for attending a seminar
in Germany on behalf of the employer. The employer deducted Profession Tax ? 2200 p.a. during the year.
Compute thetaxable salary of Mr. Dilip for the assessment year 2023-24.
Solution
Name of the Assessee : Mr. Dilip
Assessmentyear : 2023-24 Previous year : F.Y.2022-23
LegalStatus : Individual ResidentialStatus : R.& O.R.
Computation of Income from Salary
Particulars
Salary @? 3,500 p.m. for the period 42,000
1-04-2022 to 31-03-2023
Arrears of D.A. 6,900
Leave travel concession 3,000
Less : Exempt u/s 10(5) 2,100 900
House Rent Allowance 6,000
4,800 1,200 51,000
Less : Exempt u/s 10(13A)
Less : Deductions : u/s 16
50,000
a) Standard deduction u/s 16(i)
2200
b) Profession Tax u/s 16(iüi)
Nil
Income from Salary

Points to be noted :
Though salary of March 2022 has
1 Salary is taxable either on due or on receipt basis whichever is earlier.
income of earlier year on due basis,
been received in April, 2022 it must have been included in the 2023 is taxable on due basis though
March,
hence not considered in this period. Similarly salary for
actually it has not been received. bonus has been only declared and not actually
2 Bonus is taxable in the year of receipt. Since the
received, it is not considered as income.
3 Reimbursement of expenses is not the income.

6.17 : (Salary/ Compensation / VRS / Pension / Leave Encashment)

llustration Scheme of Bank of Baroda duely
30-11-2022 under the Voluntarily Retirement
Mr. Patki retires on for
his Salary Income
us 10(10C) of the Income Tax Act, 1961. Following are the details of
approved
A.Y.2023-24.
1. Salary 6,000 p.m.
2 Dearness Allowance 1500 p.m. 5,00,000) .
under VRS 4,52,000 (Maximum amount exempt u/s 10(10C is commutes 60% of his
O Compensation of 4000till 28th February,
2023. thereafter he
pension
4 He receives a monthly
pension for 90,000. 10(10AA) is 2500,
encashment of Leave Salary of 7,400 Exempt u/s
He Receives 2500/-.
6 Profession tax paid during the year is for A.Y. 2023-24.
Mr. Patki
Compute the taxable salary of
 82
Patkl
Assessee : Mr. : F.Y2022-21
Solution Name of the Prevlous year
2023-24
Residential Status : R.& 0,R
Assessmentyear :: Individual
from Balary
Legal Status Computation of Income
Particulars 48,000
(1-4-22 to 30-11-22) 12,000
Salary 6,000 x8 months
-4-22 to 30-11-22) 4,52,000 60,000
D.A. 1,500 x 8 months (1 4,52,000
Compensation under VRS NIL,
Less : Exempt u/s 10(10C) 12,000
Uncommuted Pension
28-02-23)
4,000 x 3 months (1-12-22 to 1,600
13,600
1,600 x lmonth (March 23)
Commuted Pension 90,000
Actual amount received
Less : Exempt u/s 10(10A)
of Commuted Value of Full Pension
75,000 15,000
5x 1,50,000
7,400
Leave encashment
2,500 4,900
Less : Exempt u/s 10(10AA)
Gross Salary 93,500
Less : Deductions : u/s 16
i) Standard deduction 50,000
ii) Profession Tax 2,500 52,500
Income from Salary 41,000
Points to be noted :
1 Commuted Value of full pension
90,000
60 x 100 = 1,50,000.

2. Since Gratuity is not received by the assessee of full value of commuted pension is exempt from tax
/s 10(10A).

Illustration 6.18
Mr. Kadam a severely handicapped person (85%)
completing 25 years of service in a Private Company. Hetook voluntary retirement on lst Jan, 2023 after
furnishes the following information for the year
ended 31st March, 2023.
i) Basic Salary
ii) Dearness Allowance 7 20,000 p.m.
ii) Conveyance Allowance Received @ 80% of Basic Salary.
(Actual Conveyance Expenses?800/- p.m.) 800/- p.m.
iv) Voluntary Retirement
v) Profession Tax paid Compensation ? 7,65,000/-.
vi) Gratuity Received (fully exempt.) ?2,500/
vii) Commuted Pension (1/3 rd { 1,78,600/-.
viii) Uncommuted Pension exempt.) 784,000/-.
ix) Leave Encashment ?3,000 p.m.
(Exempt. u/s 10). 2 Months Basic
x) Reimbursement of Medical
Expenses
xi) He was presented a gift cheque of ?
xii) He paid Medical Insurance Premium 10,000
by his 12,000
on 10 colleagues
March, 2023 of
by collecting
voluntary contribution.
Compute his net taxable salary for A-Y 2023-24. 16,000/- by cheque.
 alaries (Serios 15 to 1)
Solution 83

Assessment Year :
2023-24 Name of the Assessee : Mr,
LegalStatus : Individual Kadamn
Previous Year F.Y.2022-23
Residential Status: R&0. R.
Computation of Kadam from Balary
Basic salary (20,000 x 9
D.A. (80% of 1,80,000) months)Particulars
Conveyance Allowance received 1,80,000
ass : Exempt actual Expenses 144,000 3,24,000
Voluntary Retirement Compensatation
Less: Exempt u/s 10
7,200
7,200 Nil
Gratuity received 7,65,000
Less: Exempt u/s 10 (given) 5,00,000 2,65,000
Commuted Pension 1,78,60O
Less : Exempt u/s 10(1/3 given) 1,78,600 Nil
84,000
Uncommuted Pension (3000 x 3 months)
Leave 28,000 56,000
Encashment (2 months Basic)
Less : Exempt u/s 10 (given) 9,000
40,000
Reimbursement of Medical Expenses
Less: Exempt
40,000 Nil
12,000
Gross Salary 12,000 Nil
Less: Deduction u/s 1 6 n 6,54,000
a) Standard deduction
b) Profession Tax 50,000
Net Taxable Salary 2,500 52,500
llustration 6.19 6.01,500
Mr. Chandrakant Limaye is
information for the year ending 31"employed
as a Lecturer in Modern College. He
March, 2023 : furnishes the following
i) Gross Salary received
iü) Rent free bunglow (perquisite value) 30,000 p.m.
iii) Leave Salary received 36,000 p.a.
iv) Bonus received 15,000
v) 7 30,000
Arrears of Salary received for (2007-08 and 2008-09) on 17h March,
vi) Profession Tax deducted from salary 2023 7
1,50,000
vii) Examinership remuneration from college 200 p.m.
ix) He spent 4,500/- for purchase of books for his employment. 4,800
x) He took a Medical Insurance Policy from GIC on
31" March, 2023 by paying a premium of
7 10,000/- in cash.
Mr. Chandrakant Limaye is a handicapped person to the extent of 60%.
Compute his net taxable income for the Assessment Year 2023-24.
Solution
Name of the Assessee : Mr. Chandrakant Limaye
Assessment Year : 2023-24 Previous Year : FY. 2022-23
Legal Status : Individual Residential Status : R& O. R.
Computation of Income From Salary
Particulars
Gross Salary received (30,000 x 12) 3,60,000
Rent free Bungalow 36,000
Leave Salary Received 15,000
Bonus Received 30,000
Arrears of Salary 1,50,000

ExamiGross
H
nershiSalary
p remuneration from College 4,800
5,95,800
Deduction u/s 16
Standard deduction 50,000
N.A.
Entertainment Allowance 2,400
Profession Tax 52,400
Net Taxable Income 5,43,400
 March, 2022
Illustration 6.20
from CP Ltd. as employee for the year ended 31st
Mr. ABG received the following and T.D.S.]
a) Basic salary [Net of Profession Tax ? 10,000 p.m.
1-04-2022 to 31-12-2022 ? 15,000 p.m.
1-1-2023 to 31-03-2023
b) Tax deducted at source 500 p.m.
1-04-2022 to 31-12-2022 1000 p.m.
1-1-2023 to 31-03-2023
{ 2,500 p.a.
c) Profession Tax 40% of Basic Salary (gross]
d) Dearness Allowance ? 20,000
e) Bonus received in November, 2022 R 2,000 p.m.
f) Entertainment Allowance
g) Amount spent on Entertainment 1,000 p.m.
? 25,000
h) Loan Received from employer for Son's Marriage
i) Conveyance allowance received 3,000 p.m.
) Conveyance allowance spent 1,600 p.m.
k) LI.C. premium on life of MR ABG paid by company 7 6,000
) Mediclaim Insurance Paid to National Insurance
7 15,000
Company by Cheque by Mr ABG
He also paid R12,000 to ICIClprudential to keep in force an annuity plan policy qualifying for 80 CcC
Compute the net taxable salary of Mr. ABG for the Assessment Year 2023-24.
Solution
Name of the Assessee : Mr. ABG
Assessment Year : 2023-24 :
Previous Year F.Y. 2022-23
Legal Status : Individual Residential Status: R&O.R.
Computation of Income from Salary
Particulars
Basic Salary
Net Received
10,000 x 9 months 90,000
15,000 x 3 months 45,000
Add :Prof. Tax
Add : TDS 2,500
500 x 9 months
4,500
1,000 x 3 months
Gross Basic 3,000
Dearness Allowance (40% x 1,45,000) 1,45,000
Bonus 58,000
Entertainment Allowance 20,000
Conveyance Allowance Received (3,000 x 12) 24,000
Less : Exempt u/s 10(14) Actual Expenses (1,600 x 12) 36,000
LICPremium Paid by Co. (perquisite) 19,200 16,800
Gross Salary 6,000
Less : Deduction u/s 16 2,69,800
Standard deduction
Profession Tax Paid 50,000
Net Taxable Income 2,500 52,500
2,17,300
Illustration 6.21
Mr. Nikunj who is totally blind is
year 2022-23 follows : employed with BXL. Ltd. The details of his salary for the
previous
a) Basic Salary
b) D.A. 78,000 p.m.
c) H.R.A. Exempt amount 400 p.m. w/s 10(13A) 75% of Basic
d) Entertainment Allowance 20% of Basic
e) Arrears of Salary 7 2000 p.m.
) Advance against Salary 7 5,000
? 6,000
 Salaries (Sections 75to 17)

Contribution of
Fund in excess ofEmployer to
Recognised
h) Interest on
prescribed limits Provident
Bonus equalRecognised
monthsProvident Fund in excess of prescribed
to 2 t 2.300
Amount spent by him on basic was declared limits 780

Education entertainment
Perquisite Allowance [Exempt
value of vehicle u/s 10(14) 1,2001 500 pm.
Professional| Tax provided
deducted from byemployer for
personal use
600 pm.
He paid medical
insurance Salary 4,000
premium
Campute the net taxable income for A.Y,for himself and his wife 200 pm.
Solution 2023-24. 7000 by cheque

ASsessment Year: 2023-24 Name of the Assessee : Mr.

Nikun)
LegalStatus : Individual Previous Year 1 FY,2022-23
Residential Status 1 R&OR
Computation of Income From Salary
Basic Salary (8,000 x 12) Particulars
Dearness Allowance (96,000 x 75%) 96,000
House Rent Allowance
Less : Exempt u/s 10(13A)(96,000
x 20%)
19,200
72,000

Bntertainment Alowance (2,000 x 12) 4,800 14,400

Arrears of Salary 24,000
Contribution on Employer to RPF in 5,000
excess of prescribed limits
Interest on RPF in excess of prescribed 2,300
limits (Given) 780
Education Allowance (600 x 12)
Less : Exempt u/s 10(14) 7,200
Perquisite value of Vehicle 1,200 6,000
4,000
Less : Deduction u/s 16 2,24,480
1. Standard deduction 50,000
2. Entertainment Allowance u/s 16 (ii) NIL
(Non Govt. Employee)
3. Profession Taxu/s 16 (ii) 2,400 52,400
72,080
EXERCISES
6.10 GENERAL THEORY QUESTIONS
L. Descriptive Questions
1 Discuss the features of Salary Income.
2 Explain Accommodation as perquisites u/s 17(2).
3. Explain Reimbursement of medical expenses or medical facilities under the head perquisites.
4 Discuss Eg of taxable perquisites.
Define the term perquisite and give few instances of taxable and non-taxable perquisites.
6. Explain the provisions of profits in lieu salary u/s 17(3).
1. Mr. Pandharinath is working in a private organization. He gets entertainment allowance of 7,000
allowance deduction u/s 16i1)2
during the previous year. can he claim entertainment
both the houses for her own stay.
0. Mrs. Sanchita owns two house properties in Mumbai. she occupies correct?
as nil. Is she
She claim gross annual value of both the properties
agricultural estate receive ? 1,20,000/- as salary and claims it as his
2 Manoj working as a manager of an
agricultural income. Is he right?
10. Mr. from other sources. Is he right!? from Salary
various deductions u/s. 16 of the Income tax Act, 1961 available from Income
Explain the
for the current Assessment Year. Income Tax Act. 1961
eight items of perquisites which are not taxable at all under
Write any
Section 16 of the Income Tax Act, 1961.
13. Describe the various deductions under
Perquisites.
l Write any eight items of Tax Free 17(3) under the head Income from Salary'?
15. "Perquisites' as per Section
Explain