INCOME FROM SALARY-PRACTICE SUM

 

CLASS: III BCOM GEN & ISM

SUB: INCOME TAX LAW AND PRACTICE

HOME WORK: 18-08-2025

 ==========================================================================

Following are the particulars of income of Mrs. S. Choudhury for the Previous Year 2024-25:

(a) Basic salary @ ₹15,000 per month.

(b) Dearness Allowance @ 60% of salary. (Forming part for retirement benefits)

(c) Medical Allowance @ 600 per month (Actual expenditure ₹5,000).

(d) House Rent Allowance received @ ₹6,000 per month and she pays rent of ₹7,200 per month for her house in Durgapur.

 (e) City compensatory allowance ₹1,500 per month.

(f) She owns a car which she is using for official purposes. Her employer reimburses her @ ₹3,000 per month.

(g) She is contributing ₹2,100 per month towards a recognized provident fund. The employer is also contributing the same amount. Interest credited to R.P.F @ 11% ₹2,200.

 (h) She paid ₹1,800 as professional tax during the year. Compute income from salary of Mrs. Choudhury for the assessment year 2025-26, if he opts for old regime.

Solution

 

 

 

 

1

Basic Salary(15,000X12)

 

1,80,000

2

Dearness Allowances(1,88,00x60/100)

 

1,08,000

3

Fixed MedicalAllowances(600x12)

 

7,200

4

House Rent Allowances (6,000x12)

Less: Exemption(Least)

SAL=Basic+DA=2,88,000

1.40%   of sal=(2,88,000x40/100)    =1,15,000

2.HRA received                          = 72,000

3.Rent paid-10% SAL

86400-28,800                             =57.600

72,000

 

 

 

 

 

57,600

 

 

 

 

 

 

14,400

5.

CCA

 

18,000

6.

Value of car expenditure- reimbursed

 

NIL

7.

Employer’s Contribution to RPF (2,100X12)

Less: Exemption upto 12% of SAL

SAL=2,88,000

12%2,88,000 =34,560 or 25,600 w.i. less

25,200

 

25,600

 

 

NIL

8.

Interest credited to RPF=

Less: 9.5 % such interest

(2,200/11)*9.5=

2,200

 

1,900

 

 

300

 

Gross Salary

 

3,27,900

 

Less: Deduction u/s 16

i)Standard Deduction

ii) Entertainment allowances

iii) Professional  Tax paid by her

 

50,000

NIL

1,800

 

 

 

51,800

 

Net Salary

 

2,76,100

 

 

Comments

Post a Comment

Popular posts from this blog

. TATA MOTORS SET TO BEGIN THEIR MANUFACTURING UNIT IN RANIPET, TAMIL NADU Today , an important milestone for Tamil Nadu in General and Manufacturing industry N CM MK Stalin laid the foundation stone for Tata Motors Rs 9000 crore manufacturing plant in in Panapakkam, Ranipet district. It has an economic mileage for the Tamil Nadu. Just after six months of signing of MOUs with Tata Motor Groups, Tata Motor set to begin their manufacturing whch would fetch 5,000 jobs. MOU was signed in March,2024 for envisaging an investment woth Rs.9,000 crores over the period of 5 years which will provide direct and indirect employment opportunities for unemployed youths of Tamil Nadu. he plant will manufacture vehicles of flagship models of luxurious Jaguar and Land Rover, apart from four-wheelers of the Tata Motors portfolio. About Tata Motors Tata Motors is a leading global automobile manufacturer of cars, utility vehicles, pick-ups, trucks, and buses, offering an extensive range of inte...
Read more

BASIC CONCEPTS- PART 1

  INCOME TAX - BASIC CONCEPTS AND DEFINITIONS  1 Give the Meaning of Tax   A tax is a  compulsory financial charge  levied by a government on an individual, organization, or transaction. The revenue collected is used to fund public expenditures like infrastructure (roads, bridges), healthcare, defense, and education. It is not a voluntary payment or donation; it is a mandatory contribution. 2. What are the different Types of Tax ?   Taxes are broadly classified based on what is being taxed. The main types include: ·          Income Tax:  Tax on personal or corporate income/profits. ·          Goods and Services Tax (GST):  Tax on the supply of goods and services. ·          Customs Duty:  Tax on goods importe...
Read more
ALLOWANCE- U/S 10(14) 1) Allowances-Exemption depends on actual expenditure S.No Name of Allowances u/s 10(14) (i) Exemption 1 Helper Allowances Actual amount spent 2 Uniform Allowances Actual amount spent 3 Academic Research Allowance Actual amount spent 4 Conveyance Allowance Actual amount spent 5 Travellin or Transfer Allowance Actual amount spent 6 Daily Allowance Actual amount spent   2) Allowances - Exemption does not depend  on actual expenditure S.No Name of Allowances u/s 10(14) (ii) Exemption 1 Hill Allowances Rs.300 p.m. to Rs.7,000 p.m. 2 Border Area Allowances Rs.200  per month to Rs.1,300 per month 3 Compensatory Field Area ...
Read more