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Salary problems

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premarhea

- The document discusses income from salaries, including allowances and perquisites like rent free accommodation. - It provides examples calculating taxable income from salaries based on information like basic pay, dearness allowance, house rent allowance, commission received, and employer's contribution to provident funds. - The document also discusses how to calculate the taxable value of perquisites like rent free accommodation furnished by the employer based on factors like whether it is owned or rented by the employer.

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Income from Salaries Dr. NGPASC COIMBATORE | INDIA Dr. N.G.P. ARTS AND SCIENCE COLLEGE (An Autonomous Institution, Affiliated to Bharathiar University, Coimbatore) Approved by Government of Tamil Nadu and Accredited by NAAC with 'A' Grade (2nd Cycle) Dr. N.G.P.- Kalapatti Road, Coimbatore-641048, Tamil Nadu, India Web: www.drngpasc.ac.in | Email: info@drngpasc.ac.in | Phone: +91-422-2369100 Dr. R. PREMA Associate Professor in Commerce CA
Dr. NGPASC COIMBATORE | INDIA Provident Fund
Dr. NGPASC COIMBATORE | INDIA PROVIDENT FUNDS
Dr. NGPASC COIMBATORE | INDIA PROVIDENT FUNDS Meaning of Salary for PF: BP + DA + Commission Employer’s Contribution to RPF = Exempted upto 12 % of salary Interest credited to RPF Balance = Exempted upto 9.5 % on Balance
Dr. NGPASC COIMBATORE | INDIA Question Page No. 2.14 Illustration 5 Calculate the taxable amount of annual accretion to RPF if the following information is provided by assessee: 1. Pay – ₹40,000 p.m. 2. Commission received by him on the basis of turnover achieved by him – ₹1,36,000 3. Employers contribution to RPF @ 13% of salary 4. Interest credited during the year to RPF balance @12% is ₹64,000.
Dr. NGPASC COIMBATORE | INDIA Computation of Taxable portion of annual accretion for the P/Y 2019-20 Page No. 2.14 Illustration 5 Particulars ₹ ₹ i) Employers Contribution to RPF @ 13 % of Salary Salary = (BP+DA+ Commission) = 40,000 x 12 = 4,80,000 + 1,36,000 =6,16,000 x 13/100 Less: Exempted upto 12 % Taxable Portion ii) Interest credited to RPF balance @ 12 % Less: Exempted upto 9.5 % =64,000 x 9.5/12 Taxable Portion Taxable portion of annual accretion 80,080 73,920 64,000 50,667 6,160 13,133 19,493
Dr. NGPASC COIMBATORE | INDIA Question Calculate the taxable amount of annual accretion to RPF if the following information is provided by assessee: • Salary @ ₹48,000 p.m. • Commission @ 1% of turnover of ₹80,00,000 achieved by him during the previous year • Employers contribution to RPF @ 7,000 p.m. • Interest credited to RPF balance @ 12% p.a. is ₹72,000 Page No. 2.14 Qn. No. 3
Dr. NGPASC COIMBATORE | INDIA Computation of Taxable portion of annual accretion for the P/Y 2019-20 Page No. 2.14 Qn. No. 3 Particulars ₹ ₹ i) Employers Contribution to RPF (7,000 x 12) Less: Exempted upto 12 % of salary Salary = (BP+DA+ Commission) BP= 48,000 x 12 = 5,76,000 Commission = 80,00,000 x 1/100 = 80,000 Salary = 5,76,000 + 80,000 = 6,56,000 x 12/100 Taxable Portion ii) Interest credited to RPF balance @ 12 % Less: Exempted upto 9.5 % =72,000 x 9.5/12 Taxable Portion Taxable portion of annual accretion 84,000 78,720 72,000 57,000 5,260 13,133 15,000 20,280
Dr. NGPASC COIMBATORE | INDIA Question Mr. A Joined a new job on 1.4.2018 at ₹ 15,000 p.m. due on last day of the month. He started contributing to URPF @2,500 p.m. His employer was also contributing same amount. The fund was recognized from 1-8-2019. Interest credited during 2018-2019 at the rate of 11% was ₹4,400 and for the period 1-4-2019 to 31.7.2019 was ₹3,300. Compute the amount of transferred balance of URPF to RPF as on 1-8-2019 and its taxable portion. Page No. 2.15 Qn. No. 6
Dr. NGPASC COIMBATORE | INDIA Computation of Transferred balance and Taxable Portion thereof Page No. 2.15 Qn. No. 6 Particulars ₹ ₹ Employee’s Contribution (2500x12) Employer’s Contribution (2500x12) Interest on Balance Employee’s Contribution(2500x4) Employer’s Contribution(2500x4) Interest on Balance Transferred Balance to RPF on 1.8.2019 30,000 30,000 4,400 10,000 10,000 3,300 87,700 Particulars ₹ ₹ Employer’s Contribution (2500x12) Less: Exempted upto 12 % of Salary 15,000 x 12 = 1,80,000 x 12 /100 Interest credited at 11 % Less: Exempted upto 9.5 % 4,400 x 9.5 / 11 Employer’s Contribution(2500x4) Less: Exempted @ 12 % of salary 15,000 x 4 = 60,000 x 12 /100 Interest credited @ 11 % Less: Exempted upto 9.5 % 3,300 x 9.5/11 30,000 21,600 4,400 3,800 10,000 7,200 3,300 2,850 8,400 600 2,800 450 12,250 Previous Year 2018-19 Previous Year 2018-19 Previous Year 2019-20 upto 31.07.2019 (4 months) : Previous Year 2019-20 upto 31.07.2019 (4 months) :
Dr. NGPASC COIMBATORE | INDIA Allowances
Dr. NGPASC COIMBATORE | INDIA House Rent Allowance
Dr. NGPASC COIMBATORE | INDIA House Rent Allowance (Sec 10(13 A)) Meaning of Salary: BP + DA + Commission
Dr. NGPASC COIMBATORE | INDIA Question Mr. Hari is employed at Amritsar on a salary of ₹30,000 p.m. The employer is paying HRA of ₹8,000 p.m. but the actual rent paid by him (employee) is ₹ 12,000 p.m. He is also getting 2% commission on turnover achieved by him and turnover is ₹ 50,00,000. Calculate his gross salary. Page No. 2.22 Qn. No. 11
Dr. NGPASC COIMBATORE | INDIA Computation of Gross Salary for the P/Y 2019-20 Page No. 2.23 Qn. No. 11 Particulars ₹ ₹ Basic Pay (30,000 x 12) Commission (50,00,000 x 2/100) House Rent Allowance Received (8000 x 12) Less: Exemption u/s 10(13A): (Least of the Following is Exempted) i) Actual HRA Received 96,000 ii) Rent Paid – 10 % of Salary 1,44,000 – 46,000 98,000 iii) 40 % of Salary 1,84,000 Gross Salary 96,000 96,000 3,60,000 1,00,000 Nil 4,60,000 Rent Paid = 12000 x 12 = 1,44,000 Salary = BP + DA (Enters) + Commission = 3,60,000 + 1,00,000 = 4,60,000 10 % = 46,000 40 % = 1,84,000
Dr. NGPASC COIMBATORE | INDIA Question Compute Gross salary from information given below for situation separately: • Salary - ₹30,000 p.m. • DA – ₹6,000 p.m. • CCA – ₹1,000 p.m. • HRA – ₹8,000 p.m. • Commission on turnover achieved by him is ₹ 40,000. Situation a) Living in own house b) Living in rented house at Delhi and DA enters into pay for retirement benefits and rent paid is ₹ 7,000 p.m. c) Living in rented house at Chandigarh and DA does not enters into pay for retirement benefits and the rent paid is 10,000 p.m. Page No. 2.22 Qn. No. 11
Dr. NGPASC COIMBATORE | INDIA Computation of Gross Salary for the P/Y 2019-20 Page No. 2.23 Qn. No. 7 Particulars ₹ ₹ Basic Pay (30,000 x 12) DA (6,000 x 12) CCA (1,000 x 12) Commission Gross Salary 3,60,000 72,000 1,200 40,000 5,80,000
Dr. NGPASC COIMBATORE | INDIA Computation of Gross Salary for the P/Y 2019-20 Particulars ₹ ₹ Basic Pay (30,000 x 12) DA (Enters) (6,000 x 12) CCA (1,000 x 12) Commission on Turnover House Rent Allowance Received (8000 x 12) Less: Exemption u/s 10(13A): (Least of the Following is Exempted) i) Actual HRA Received 96,000 ii) Rent Paid – 10 % of Salary 84,000 – 47,200 36,800 iii) 50 % of Salary 2,36,000 Gross Salary 96,000 36,800 3,60,000 72,000 12,000 40,000 59,200 5,43,200 Page No. 2.23 Qn. No. 7
Dr. NGPASC COIMBATORE | INDIA Computation of Gross Salary for the P/Y 2019-20 Particulars ₹ ₹ Basic Pay (30,000 x 12) DA (6,000 x 12) CCA (1,000 x 12) Commission on Turnover House Rent Allowance Received (8000 x 12) Less: Exemption u/s 10(13A): (Least of the Following is Exempted) i) Actual HRA Received 96,000 ii) Rent Paid – 10 % of Salary 1,20,000 – 40,000 80,000 iii) 40 % of Salary 1,60,000 Gross Salary 96,000 80,000 3,60,000 72,000 12,000 40,000 16,000 5,00,000 Page No. 2.23 Qn. No. 7
Dr. NGPASC COIMBATORE | INDIA Question Mr. Ramesh swain is employed at Hyderabad at a Basic Salary of ₹25,000 p.m. and he is also getting following allowances: 1. Dearness Allowances - ₹2,000 p.m. 2. Lunch allowance - ₹1,000 p.m. 3. Servant allowance (He is paying ₹1,200 p.m. to a servant) - ₹ 1,000 p.m. 4. Transport allowance - ₹ 2,000 p.m. 5. Education allowance @ 200 p.m. per child for three children 6. Hostel allowance to one child - ₹ 500 p.m. 7. Conveyance allowance - ₹ 800 p.m. 8. Overtime allowance - ₹2,000 p.m. 9. Officiating allowance - ₹2,000 p.m. 10. Cash allowance - ₹1,200 p.m. 11. Entertainment allowance - ₹2,000 p.m. 12. Medical allowance - ₹800 p.m. 13. City Compensatory allowance - ₹600 p.m. 14. House rent allowance - ₹ 5,000 p.m. He is having a family house at the place of his posting but he is living in a rented house and is paying a rent of ₹7,000 p.m. Find out his gross salary. Page No. 2.26 Qn. No. 12
Dr. NGPASC COIMBATORE | INDIA Computation of Gross Salary for the P/Y 2019-20 Page No. 2.26 Qn. No. 12 Particulars ₹ ₹ Basic Salary (25,000 x 12) Dearness Allowance (2,000 x 12) Lunch Allowance Servant Allowance (Taxable if servant is for his personal use) Transport Allowance Education Allowance Received Less: Exempted 100 x 2 x 12 Hostel Allowance Received (500 x 12) Less: Exempted (300 x 12) Conveyance Allowance (800 x 12) Overtime Allowance (2000 x 12) Officiating Allowance (2000 x 12) 7,200 2,400 6,000 3,600 3,00,000 24,000 12,000 12,000 24,000 4,800 2,400 9,600 24,000 24,000
Dr. NGPASC COIMBATORE | INDIA Computation of Gross Salary for the P/Y 2019-20 Page No. 2.26 Qn. No. 12 Particulars ₹ ₹ Cash Allowance (1,200 x 12) Entertainment Allowance (2,000 x 12) Medical Allowance (800 x 12) City Compensatory Allowance (600 x 12) House Rent Allowance Received (5000 x 12) Less: Exemption u/s 10(13A): (Least of the Following is Exempted) i) Actual HRA Received 60,000 ii) 40 % of Salary 1,20,000 iii) Rent Paid – 10 % of Salary 54,000 Gross Salary 60,000 54,000 14,400 24,000 9,600 7,200 6,000 4,98,000
Dr. NGPASC COIMBATORE | INDIA Rent Free Accommodation
Dr. NGPASC COIMBATORE | INDIA Rent Free Accommodation Accommodation for Residence of the Employee Accommodation is given to the employee without any charge Not in cash but in kind as Perquisites. Accommodation is Rent Free to the Employee
Dr. NGPASC COIMBATORE | INDIA Calculation of Rent Free House RFA Unfurnished Accommodation Furnished Accommodation
Dr. NGPASC COIMBATORE | INDIA Calculation of Rent Free House Unfurnished Accommodation Govt. Employees Other Employees
Dr. NGPASC COIMBATORE | INDIA Calculation of Rent Free House Unfurnished Accommodation Govt. Employees Other Employees (NGE) Whether accommodation is owned by employer or not License fee or Rent fixed by Govt. is taxable
Dr. NGPASC COIMBATORE | INDIA Calculation of Rent Free House Other Employees (NGE) 15% of salary or Actual rent paid by employer whichever is less A) Owned by Employer B) Hired by Employer Population - more than 20 lakhs Population – Exceeding 10 lakhs & but not exceeding 20 lakhs Population – 10 lakhs & less than 10 lakhs 15% of salary 10% of salary 7.5% of salary Unfurnished Accommodation
Dr. NGPASC COIMBATORE | INDIA Calculation of Rent Free House Furnished Accommodation Value of Furnished RFA Value of Unfurnished RFA If furniture is owned by employer 10% of actual cost of furniture = + Note: Govt. employee or Non govt. employee
Dr. NGPASC COIMBATORE | INDIA Calculation of Rent Free House Furnished Accommodation Value of Furnished RFA Value of Unfurnished RFA If furniture is hired by employer Actual hire charges of furniture paid by employer = + Note: Govt. employee or Non govt. employee
Dr. NGPASC COIMBATORE | INDIA Hotel Accommodation For less than 15 days on transfer from one place to another HA For more than 15 days on transfer from one place to another 24% of salary or actual bill whichever is less is taxable Fully Exempted
Dr. NGPASC COIMBATORE | INDIA Meaning of salary  Basic pay, pay, wages  Dearness pay, Dearness allowance which enters  Commission  Bonus  Fees  Value of all taxable allowances  Any other monetary payment which is chargeable to tax  Leave encashment of salary only if it pertains to the leave earned during the previous year in which RFH is provided to the employee Salary
Dr. NGPASC COIMBATORE | INDIA Question Mr. R is working in a central government office at Shimla. His salary particulars are as follows: Salary - 3,60,000 DA(fully enter into pay for retirement benefits) - 96,000 Hill Compensatory Allowance - 24,000 Transport Allowance - 24,000 Rent Free House: Annual License Fee - 72,000 Cost of furnishing - 3,00,000 Calculation of Rent free House. Page No. 2.37 Qn. No. 15
Dr. NGPASC COIMBATORE | INDIA Computation of RFH for the P/Y 2019-20 Page No. 2.37 Qn. No. 15 Particulars ₹ ₹ For Government employee the value of RFH is License Fee Add: 10% of cost of furnishing (10% of 3,00,000) 72,000 30,000 Value of rent free furnished house 1,02,000
Dr. NGPASC COIMBATORE | INDIA Question Mr. Y gets a salary of ₹33,000 p.m. and he has been provided with rent free furnished accommodation at Karnal (Population 7.5 lakhs). The FMV of the unfurnished house is ₹60,000 p.a. He gets DA @ 40% of salary which is given as per terms of employment. He gets education allowance of ₹500 p.m. for education of his son. The cost of furnishing of the house is ₹2,30,000. The employee has been provided with hired air conditioner for five months and hire charges of ₹1,000 p.m. are paid by the employer. Page No. 2.38 Qn. No. 17
Dr. NGPASC COIMBATORE | INDIA Computation of Gross salary for the P/Y 2019-20 Particulars ₹ ₹ Salary 33,000*12 DA (40% of salary) Education allowance 500*12 (-) Exempted Value of Rent Free House: House owned by employer at Karnal 7.5% of salary (3,96,000+1,58,400+4,800=5,59,200)(5,59,200*7.5/100) Add: 10% of cost of furnishing Add: Rent of air conditioner 1000*5 6,000 1,200 41,940 23,000 5,000 3,96,000 1,58,400 4,800 69,940 Gross Salary 6,29,140 Page No. 2.38 Qn. No. 17
Dr. NGPASC COIMBATORE | INDIA Question Mr. Arun has furnished following particulars: i) Salary @25,000 p.m. ii) Dearness Allowance @5,000 p.m. (It enters into pay for retirement benefits) iii) Entertainment allowances @600 p.m. iv) Bonus 16,000 v) Cost of furnishing 1,20,000 Calculate the value of rent free house if Case I. Mr. Arun is Govt. employee and rent of house fixed by Govt. is 2,500 p.m. Case II. Mr. Arun is working in a Semi-Govt. undertaking at Chennai (population more than 25 lakhs) and FMV of the house is 8,000 p.m. Case III. Mr. Arun is working in private sector at Chandigarh (population below 10 lakhs) and rent of the house hired by employer is 6,000 p.m. are paid by employer. Case IV. Mr. Arun is working in private sector at Delhi(population above 25 lakhs) and actual rent of the house not owned by employer is 6,000 p.m. Rent charged by employer is only 3,000 p.m. Page No. 2.39 Qn. No. 18
Dr. NGPASC COIMBATORE | INDIA Computation of Rent Free House for the P/Y 2019-20 Particulars ₹ ₹ CASE I: Govt. Employee Value of Rent Free House: Rent fixed by Govt. Add: 10% of cost of furnishing (10% of 1,20,000) 30,000 12,000 42,000 Value of rent free furnished house 42,000 Page No. 2.39 Qn. No. 18
Dr. NGPASC COIMBATORE | INDIA Computation of Rent Free House for the P/Y 2019-20 Particulars ₹ ₹ CASE II: Semi Govt. Employee Value of Rent Free House at Chennai Salary of the employee = 3,00,000+60,000+16,000+7,200=3,83,200 15% of salary Add: 10% of cost of furnishing (10% of 1,20,000) 57,480 12,000 69,480 Value of rent free furnished house 69,480 Page No. 2.39 Qn. No. 18
Dr. NGPASC COIMBATORE | INDIA Computation of Rent Free House for the P/Y 2019-20 Particulars ₹ ₹ CASE III: Any other Employee (City having population below 10 lakhs) Value of Rent Free House hired by employer: Salary of the employee = 3,00,000+60,000+16,000+7,200=3,83,200 15% of salary = 57,480 or Actual rent paid by employer= 72,000 w.e is less Add: 10% of cost of furnishing (10% of 1,20,000) Add: Actual hire charges of refrigerator 57,480 12,000 7,200 76,680 Value of rent free furnished house 76,680 Page No. 2.39 Qn. No. 18
Dr. NGPASC COIMBATORE | INDIA Computation of Rent Free House for the P/Y 2019-20 Particulars ₹ ₹ CASE IV: Any other Employee (City having population above 25 lakhs) Value of Rent Free House at Delhi: Salary of the employee = 3,00,000+60,000+16,000+7,200=3,83,200 15% of salary = 57,480 or Actual rent paid by employer= 72,000 w.e is less Add: 10% of cost of furnishing (10% of 1,20,000) 57,480 12,000 Value of rent free furnished house Less: Rent charged by employer @3,000 p.m. 69,480 36,000 Value of concessional accommodation 33,480 Page No. 2.39 Qn. No. 18
Dr. NGPASC COIMBATORE | INDIA Question Page No. 2.41 Qn. No. 20
Dr. NGPASC COIMBATORE | INDIA Page No. 2.41 Qn. No. 20
Dr. NGPASC COIMBATORE | INDIA Question Page No. 2.42 Qn. No. 22
Dr. NGPASC COIMBATORE | INDIA Page No. 2.42 Qn. No. 22
Dr. NGPASC COIMBATORE | INDIA Question Page No. 2.53 Qn. No. 28
Dr. NGPASC COIMBATORE | INDIA Page No. 2.53 Qn. No. 28
Dr. NGPASC COIMBATORE | INDIA Gratuity
Dr. NGPASC COIMBATORE | INDIA Question Page No. 2.65 Qn. No. 32
Dr. NGPASC COIMBATORE | INDIA Page No. 2.65 Qn. No. 32
Dr. NGPASC COIMBATORE | INDIA Question Page No. 2.68 Qn. No. 33
Dr. NGPASC COIMBATORE | INDIA Page No. 2.68 Qn. No. 33
Dr. NGPASC COIMBATORE | INDIA Page No. 2.68 Qn. No. 33
Dr. NGPASC COIMBATORE | INDIA Pension
Dr. NGPASC COIMBATORE | INDIA Question Page No. 2.70 Qn. No. 35
Dr. NGPASC COIMBATORE | INDIA Page No. 2.70 Qn. No. 35
Dr. NGPASC COIMBATORE | INDIA Question Page No. 2.71 Qn. No. 36
Dr. NGPASC COIMBATORE | INDIA Page No. 2.71 Qn. No. 36
Dr. NGPASC COIMBATORE | INDIA Leave Encashment
Dr. NGPASC COIMBATORE | INDIA Question Page No. 2.73 Qn. No. 37
Dr. NGPASC COIMBATORE | INDIA Page No. 2.73 Qn. No. 37
Dr. NGPASC COIMBATORE | INDIA Question Page No. 2.74 Qn. No. 38
Dr. NGPASC COIMBATORE | INDIA Page No. 2.74 Qn. No. 38
Dr. NGPASC COIMBATORE | INDIA Question Page No. 2.77 Qn. No. 39
Dr. NGPASC COIMBATORE | INDIA Page No. 2.77 Qn. No. 39
Dr. NGPASC COIMBATORE | INDIA Question Page No. 2.78 Qn. No. 40
Dr. NGPASC COIMBATORE | INDIA Page No. 2.78 Qn. No. 40
Dr. NGPASC COIMBATORE | INDIA Question Page No. 2.79 Qn. No. 42
Dr. NGPASC COIMBATORE | INDIA Page No. 2.79 Qn. No. 42
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Salary problems

  • 1. Income from Salaries Dr. NGPASC COIMBATORE | INDIA Dr. N.G.P. ARTS AND SCIENCE COLLEGE (An Autonomous Institution, Affiliated to Bharathiar University, Coimbatore) Approved by Government of Tamil Nadu and Accredited by NAAC with 'A' Grade (2nd Cycle) Dr. N.G.P.- Kalapatti Road, Coimbatore-641048, Tamil Nadu, India Web: www.drngpasc.ac.in | Email: info@drngpasc.ac.in | Phone: +91-422-2369100 Dr. R. PREMA Associate Professor in Commerce CA
  • 2. Dr. NGPASC COIMBATORE | INDIA Provident Fund
  • 3. Dr. NGPASC COIMBATORE | INDIA PROVIDENT FUNDS
  • 4. Dr. NGPASC COIMBATORE | INDIA PROVIDENT FUNDS Meaning of Salary for PF: BP + DA + Commission Employer’s Contribution to RPF = Exempted upto 12 % of salary Interest credited to RPF Balance = Exempted upto 9.5 % on Balance
  • 5. Dr. NGPASC COIMBATORE | INDIA Question Page No. 2.14 Illustration 5 Calculate the taxable amount of annual accretion to RPF if the following information is provided by assessee: 1. Pay – ₹40,000 p.m. 2. Commission received by him on the basis of turnover achieved by him – ₹1,36,000 3. Employers contribution to RPF @ 13% of salary 4. Interest credited during the year to RPF balance @12% is ₹64,000.
  • 6. Dr. NGPASC COIMBATORE | INDIA Computation of Taxable portion of annual accretion for the P/Y 2019-20 Page No. 2.14 Illustration 5 Particulars ₹ ₹ i) Employers Contribution to RPF @ 13 % of Salary Salary = (BP+DA+ Commission) = 40,000 x 12 = 4,80,000 + 1,36,000 =6,16,000 x 13/100 Less: Exempted upto 12 % Taxable Portion ii) Interest credited to RPF balance @ 12 % Less: Exempted upto 9.5 % =64,000 x 9.5/12 Taxable Portion Taxable portion of annual accretion 80,080 73,920 64,000 50,667 6,160 13,133 19,493
  • 7. Dr. NGPASC COIMBATORE | INDIA Question Calculate the taxable amount of annual accretion to RPF if the following information is provided by assessee: • Salary @ ₹48,000 p.m. • Commission @ 1% of turnover of ₹80,00,000 achieved by him during the previous year • Employers contribution to RPF @ 7,000 p.m. • Interest credited to RPF balance @ 12% p.a. is ₹72,000 Page No. 2.14 Qn. No. 3
  • 8. Dr. NGPASC COIMBATORE | INDIA Computation of Taxable portion of annual accretion for the P/Y 2019-20 Page No. 2.14 Qn. No. 3 Particulars ₹ ₹ i) Employers Contribution to RPF (7,000 x 12) Less: Exempted upto 12 % of salary Salary = (BP+DA+ Commission) BP= 48,000 x 12 = 5,76,000 Commission = 80,00,000 x 1/100 = 80,000 Salary = 5,76,000 + 80,000 = 6,56,000 x 12/100 Taxable Portion ii) Interest credited to RPF balance @ 12 % Less: Exempted upto 9.5 % =72,000 x 9.5/12 Taxable Portion Taxable portion of annual accretion 84,000 78,720 72,000 57,000 5,260 13,133 15,000 20,280
  • 9. Dr. NGPASC COIMBATORE | INDIA Question Mr. A Joined a new job on 1.4.2018 at ₹ 15,000 p.m. due on last day of the month. He started contributing to URPF @2,500 p.m. His employer was also contributing same amount. The fund was recognized from 1-8-2019. Interest credited during 2018-2019 at the rate of 11% was ₹4,400 and for the period 1-4-2019 to 31.7.2019 was ₹3,300. Compute the amount of transferred balance of URPF to RPF as on 1-8-2019 and its taxable portion. Page No. 2.15 Qn. No. 6
  • 10. Dr. NGPASC COIMBATORE | INDIA Computation of Transferred balance and Taxable Portion thereof Page No. 2.15 Qn. No. 6 Particulars ₹ ₹ Employee’s Contribution (2500x12) Employer’s Contribution (2500x12) Interest on Balance Employee’s Contribution(2500x4) Employer’s Contribution(2500x4) Interest on Balance Transferred Balance to RPF on 1.8.2019 30,000 30,000 4,400 10,000 10,000 3,300 87,700 Particulars ₹ ₹ Employer’s Contribution (2500x12) Less: Exempted upto 12 % of Salary 15,000 x 12 = 1,80,000 x 12 /100 Interest credited at 11 % Less: Exempted upto 9.5 % 4,400 x 9.5 / 11 Employer’s Contribution(2500x4) Less: Exempted @ 12 % of salary 15,000 x 4 = 60,000 x 12 /100 Interest credited @ 11 % Less: Exempted upto 9.5 % 3,300 x 9.5/11 30,000 21,600 4,400 3,800 10,000 7,200 3,300 2,850 8,400 600 2,800 450 12,250 Previous Year 2018-19 Previous Year 2018-19 Previous Year 2019-20 upto 31.07.2019 (4 months) : Previous Year 2019-20 upto 31.07.2019 (4 months) :
  • 11. Dr. NGPASC COIMBATORE | INDIA Allowances
  • 12. Dr. NGPASC COIMBATORE | INDIA House Rent Allowance
  • 13. Dr. NGPASC COIMBATORE | INDIA House Rent Allowance (Sec 10(13 A)) Meaning of Salary: BP + DA + Commission
  • 14. Dr. NGPASC COIMBATORE | INDIA Question Mr. Hari is employed at Amritsar on a salary of ₹30,000 p.m. The employer is paying HRA of ₹8,000 p.m. but the actual rent paid by him (employee) is ₹ 12,000 p.m. He is also getting 2% commission on turnover achieved by him and turnover is ₹ 50,00,000. Calculate his gross salary. Page No. 2.22 Qn. No. 11
  • 15. Dr. NGPASC COIMBATORE | INDIA Computation of Gross Salary for the P/Y 2019-20 Page No. 2.23 Qn. No. 11 Particulars ₹ ₹ Basic Pay (30,000 x 12) Commission (50,00,000 x 2/100) House Rent Allowance Received (8000 x 12) Less: Exemption u/s 10(13A): (Least of the Following is Exempted) i) Actual HRA Received 96,000 ii) Rent Paid – 10 % of Salary 1,44,000 – 46,000 98,000 iii) 40 % of Salary 1,84,000 Gross Salary 96,000 96,000 3,60,000 1,00,000 Nil 4,60,000 Rent Paid = 12000 x 12 = 1,44,000 Salary = BP + DA (Enters) + Commission = 3,60,000 + 1,00,000 = 4,60,000 10 % = 46,000 40 % = 1,84,000
  • 16. Dr. NGPASC COIMBATORE | INDIA Question Compute Gross salary from information given below for situation separately: • Salary - ₹30,000 p.m. • DA – ₹6,000 p.m. • CCA – ₹1,000 p.m. • HRA – ₹8,000 p.m. • Commission on turnover achieved by him is ₹ 40,000. Situation a) Living in own house b) Living in rented house at Delhi and DA enters into pay for retirement benefits and rent paid is ₹ 7,000 p.m. c) Living in rented house at Chandigarh and DA does not enters into pay for retirement benefits and the rent paid is 10,000 p.m. Page No. 2.22 Qn. No. 11
  • 17. Dr. NGPASC COIMBATORE | INDIA Computation of Gross Salary for the P/Y 2019-20 Page No. 2.23 Qn. No. 7 Particulars ₹ ₹ Basic Pay (30,000 x 12) DA (6,000 x 12) CCA (1,000 x 12) Commission Gross Salary 3,60,000 72,000 1,200 40,000 5,80,000
  • 18. Dr. NGPASC COIMBATORE | INDIA Computation of Gross Salary for the P/Y 2019-20 Particulars ₹ ₹ Basic Pay (30,000 x 12) DA (Enters) (6,000 x 12) CCA (1,000 x 12) Commission on Turnover House Rent Allowance Received (8000 x 12) Less: Exemption u/s 10(13A): (Least of the Following is Exempted) i) Actual HRA Received 96,000 ii) Rent Paid – 10 % of Salary 84,000 – 47,200 36,800 iii) 50 % of Salary 2,36,000 Gross Salary 96,000 36,800 3,60,000 72,000 12,000 40,000 59,200 5,43,200 Page No. 2.23 Qn. No. 7
  • 19. Dr. NGPASC COIMBATORE | INDIA Computation of Gross Salary for the P/Y 2019-20 Particulars ₹ ₹ Basic Pay (30,000 x 12) DA (6,000 x 12) CCA (1,000 x 12) Commission on Turnover House Rent Allowance Received (8000 x 12) Less: Exemption u/s 10(13A): (Least of the Following is Exempted) i) Actual HRA Received 96,000 ii) Rent Paid – 10 % of Salary 1,20,000 – 40,000 80,000 iii) 40 % of Salary 1,60,000 Gross Salary 96,000 80,000 3,60,000 72,000 12,000 40,000 16,000 5,00,000 Page No. 2.23 Qn. No. 7
  • 20. Dr. NGPASC COIMBATORE | INDIA Question Mr. Ramesh swain is employed at Hyderabad at a Basic Salary of ₹25,000 p.m. and he is also getting following allowances: 1. Dearness Allowances - ₹2,000 p.m. 2. Lunch allowance - ₹1,000 p.m. 3. Servant allowance (He is paying ₹1,200 p.m. to a servant) - ₹ 1,000 p.m. 4. Transport allowance - ₹ 2,000 p.m. 5. Education allowance @ 200 p.m. per child for three children 6. Hostel allowance to one child - ₹ 500 p.m. 7. Conveyance allowance - ₹ 800 p.m. 8. Overtime allowance - ₹2,000 p.m. 9. Officiating allowance - ₹2,000 p.m. 10. Cash allowance - ₹1,200 p.m. 11. Entertainment allowance - ₹2,000 p.m. 12. Medical allowance - ₹800 p.m. 13. City Compensatory allowance - ₹600 p.m. 14. House rent allowance - ₹ 5,000 p.m. He is having a family house at the place of his posting but he is living in a rented house and is paying a rent of ₹7,000 p.m. Find out his gross salary. Page No. 2.26 Qn. No. 12
  • 21. Dr. NGPASC COIMBATORE | INDIA Computation of Gross Salary for the P/Y 2019-20 Page No. 2.26 Qn. No. 12 Particulars ₹ ₹ Basic Salary (25,000 x 12) Dearness Allowance (2,000 x 12) Lunch Allowance Servant Allowance (Taxable if servant is for his personal use) Transport Allowance Education Allowance Received Less: Exempted 100 x 2 x 12 Hostel Allowance Received (500 x 12) Less: Exempted (300 x 12) Conveyance Allowance (800 x 12) Overtime Allowance (2000 x 12) Officiating Allowance (2000 x 12) 7,200 2,400 6,000 3,600 3,00,000 24,000 12,000 12,000 24,000 4,800 2,400 9,600 24,000 24,000
  • 22. Dr. NGPASC COIMBATORE | INDIA Computation of Gross Salary for the P/Y 2019-20 Page No. 2.26 Qn. No. 12 Particulars ₹ ₹ Cash Allowance (1,200 x 12) Entertainment Allowance (2,000 x 12) Medical Allowance (800 x 12) City Compensatory Allowance (600 x 12) House Rent Allowance Received (5000 x 12) Less: Exemption u/s 10(13A): (Least of the Following is Exempted) i) Actual HRA Received 60,000 ii) 40 % of Salary 1,20,000 iii) Rent Paid – 10 % of Salary 54,000 Gross Salary 60,000 54,000 14,400 24,000 9,600 7,200 6,000 4,98,000
  • 23. Dr. NGPASC COIMBATORE | INDIA Rent Free Accommodation
  • 24. Dr. NGPASC COIMBATORE | INDIA Rent Free Accommodation Accommodation for Residence of the Employee Accommodation is given to the employee without any charge Not in cash but in kind as Perquisites. Accommodation is Rent Free to the Employee
  • 25. Dr. NGPASC COIMBATORE | INDIA Calculation of Rent Free House RFA Unfurnished Accommodation Furnished Accommodation
  • 26. Dr. NGPASC COIMBATORE | INDIA Calculation of Rent Free House Unfurnished Accommodation Govt. Employees Other Employees
  • 27. Dr. NGPASC COIMBATORE | INDIA Calculation of Rent Free House Unfurnished Accommodation Govt. Employees Other Employees (NGE) Whether accommodation is owned by employer or not License fee or Rent fixed by Govt. is taxable
  • 28. Dr. NGPASC COIMBATORE | INDIA Calculation of Rent Free House Other Employees (NGE) 15% of salary or Actual rent paid by employer whichever is less A) Owned by Employer B) Hired by Employer Population - more than 20 lakhs Population – Exceeding 10 lakhs & but not exceeding 20 lakhs Population – 10 lakhs & less than 10 lakhs 15% of salary 10% of salary 7.5% of salary Unfurnished Accommodation
  • 29. Dr. NGPASC COIMBATORE | INDIA Calculation of Rent Free House Furnished Accommodation Value of Furnished RFA Value of Unfurnished RFA If furniture is owned by employer 10% of actual cost of furniture = + Note: Govt. employee or Non govt. employee
  • 30. Dr. NGPASC COIMBATORE | INDIA Calculation of Rent Free House Furnished Accommodation Value of Furnished RFA Value of Unfurnished RFA If furniture is hired by employer Actual hire charges of furniture paid by employer = + Note: Govt. employee or Non govt. employee
  • 31. Dr. NGPASC COIMBATORE | INDIA Hotel Accommodation For less than 15 days on transfer from one place to another HA For more than 15 days on transfer from one place to another 24% of salary or actual bill whichever is less is taxable Fully Exempted
  • 32. Dr. NGPASC COIMBATORE | INDIA Meaning of salary  Basic pay, pay, wages  Dearness pay, Dearness allowance which enters  Commission  Bonus  Fees  Value of all taxable allowances  Any other monetary payment which is chargeable to tax  Leave encashment of salary only if it pertains to the leave earned during the previous year in which RFH is provided to the employee Salary
  • 33. Dr. NGPASC COIMBATORE | INDIA Question Mr. R is working in a central government office at Shimla. His salary particulars are as follows: Salary - 3,60,000 DA(fully enter into pay for retirement benefits) - 96,000 Hill Compensatory Allowance - 24,000 Transport Allowance - 24,000 Rent Free House: Annual License Fee - 72,000 Cost of furnishing - 3,00,000 Calculation of Rent free House. Page No. 2.37 Qn. No. 15
  • 34. Dr. NGPASC COIMBATORE | INDIA Computation of RFH for the P/Y 2019-20 Page No. 2.37 Qn. No. 15 Particulars ₹ ₹ For Government employee the value of RFH is License Fee Add: 10% of cost of furnishing (10% of 3,00,000) 72,000 30,000 Value of rent free furnished house 1,02,000
  • 35. Dr. NGPASC COIMBATORE | INDIA Question Mr. Y gets a salary of ₹33,000 p.m. and he has been provided with rent free furnished accommodation at Karnal (Population 7.5 lakhs). The FMV of the unfurnished house is ₹60,000 p.a. He gets DA @ 40% of salary which is given as per terms of employment. He gets education allowance of ₹500 p.m. for education of his son. The cost of furnishing of the house is ₹2,30,000. The employee has been provided with hired air conditioner for five months and hire charges of ₹1,000 p.m. are paid by the employer. Page No. 2.38 Qn. No. 17
  • 36. Dr. NGPASC COIMBATORE | INDIA Computation of Gross salary for the P/Y 2019-20 Particulars ₹ ₹ Salary 33,000*12 DA (40% of salary) Education allowance 500*12 (-) Exempted Value of Rent Free House: House owned by employer at Karnal 7.5% of salary (3,96,000+1,58,400+4,800=5,59,200)(5,59,200*7.5/100) Add: 10% of cost of furnishing Add: Rent of air conditioner 1000*5 6,000 1,200 41,940 23,000 5,000 3,96,000 1,58,400 4,800 69,940 Gross Salary 6,29,140 Page No. 2.38 Qn. No. 17
  • 37. Dr. NGPASC COIMBATORE | INDIA Question Mr. Arun has furnished following particulars: i) Salary @25,000 p.m. ii) Dearness Allowance @5,000 p.m. (It enters into pay for retirement benefits) iii) Entertainment allowances @600 p.m. iv) Bonus 16,000 v) Cost of furnishing 1,20,000 Calculate the value of rent free house if Case I. Mr. Arun is Govt. employee and rent of house fixed by Govt. is 2,500 p.m. Case II. Mr. Arun is working in a Semi-Govt. undertaking at Chennai (population more than 25 lakhs) and FMV of the house is 8,000 p.m. Case III. Mr. Arun is working in private sector at Chandigarh (population below 10 lakhs) and rent of the house hired by employer is 6,000 p.m. are paid by employer. Case IV. Mr. Arun is working in private sector at Delhi(population above 25 lakhs) and actual rent of the house not owned by employer is 6,000 p.m. Rent charged by employer is only 3,000 p.m. Page No. 2.39 Qn. No. 18
  • 38. Dr. NGPASC COIMBATORE | INDIA Computation of Rent Free House for the P/Y 2019-20 Particulars ₹ ₹ CASE I: Govt. Employee Value of Rent Free House: Rent fixed by Govt. Add: 10% of cost of furnishing (10% of 1,20,000) 30,000 12,000 42,000 Value of rent free furnished house 42,000 Page No. 2.39 Qn. No. 18
  • 39. Dr. NGPASC COIMBATORE | INDIA Computation of Rent Free House for the P/Y 2019-20 Particulars ₹ ₹ CASE II: Semi Govt. Employee Value of Rent Free House at Chennai Salary of the employee = 3,00,000+60,000+16,000+7,200=3,83,200 15% of salary Add: 10% of cost of furnishing (10% of 1,20,000) 57,480 12,000 69,480 Value of rent free furnished house 69,480 Page No. 2.39 Qn. No. 18
  • 40. Dr. NGPASC COIMBATORE | INDIA Computation of Rent Free House for the P/Y 2019-20 Particulars ₹ ₹ CASE III: Any other Employee (City having population below 10 lakhs) Value of Rent Free House hired by employer: Salary of the employee = 3,00,000+60,000+16,000+7,200=3,83,200 15% of salary = 57,480 or Actual rent paid by employer= 72,000 w.e is less Add: 10% of cost of furnishing (10% of 1,20,000) Add: Actual hire charges of refrigerator 57,480 12,000 7,200 76,680 Value of rent free furnished house 76,680 Page No. 2.39 Qn. No. 18
  • 41. Dr. NGPASC COIMBATORE | INDIA Computation of Rent Free House for the P/Y 2019-20 Particulars ₹ ₹ CASE IV: Any other Employee (City having population above 25 lakhs) Value of Rent Free House at Delhi: Salary of the employee = 3,00,000+60,000+16,000+7,200=3,83,200 15% of salary = 57,480 or Actual rent paid by employer= 72,000 w.e is less Add: 10% of cost of furnishing (10% of 1,20,000) 57,480 12,000 Value of rent free furnished house Less: Rent charged by employer @3,000 p.m. 69,480 36,000 Value of concessional accommodation 33,480 Page No. 2.39 Qn. No. 18
  • 42. Dr. NGPASC COIMBATORE | INDIA Question Page No. 2.41 Qn. No. 20
  • 43. Dr. NGPASC COIMBATORE | INDIA Page No. 2.41 Qn. No. 20
  • 44. Dr. NGPASC COIMBATORE | INDIA Question Page No. 2.42 Qn. No. 22
  • 45. Dr. NGPASC COIMBATORE | INDIA Page No. 2.42 Qn. No. 22
  • 46. Dr. NGPASC COIMBATORE | INDIA Question Page No. 2.53 Qn. No. 28
  • 47. Dr. NGPASC COIMBATORE | INDIA Page No. 2.53 Qn. No. 28
  • 48. Dr. NGPASC COIMBATORE | INDIA Gratuity
  • 49. Dr. NGPASC COIMBATORE | INDIA Question Page No. 2.65 Qn. No. 32
  • 50. Dr. NGPASC COIMBATORE | INDIA Page No. 2.65 Qn. No. 32
  • 51. Dr. NGPASC COIMBATORE | INDIA Question Page No. 2.68 Qn. No. 33
  • 52. Dr. NGPASC COIMBATORE | INDIA Page No. 2.68 Qn. No. 33
  • 53. Dr. NGPASC COIMBATORE | INDIA Page No. 2.68 Qn. No. 33
  • 54. Dr. NGPASC COIMBATORE | INDIA Pension
  • 55. Dr. NGPASC COIMBATORE | INDIA Question Page No. 2.70 Qn. No. 35
  • 56. Dr. NGPASC COIMBATORE | INDIA Page No. 2.70 Qn. No. 35
  • 57. Dr. NGPASC COIMBATORE | INDIA Question Page No. 2.71 Qn. No. 36
  • 58. Dr. NGPASC COIMBATORE | INDIA Page No. 2.71 Qn. No. 36
  • 59. Dr. NGPASC COIMBATORE | INDIA Leave Encashment
  • 60. Dr. NGPASC COIMBATORE | INDIA Question Page No. 2.73 Qn. No. 37
  • 61. Dr. NGPASC COIMBATORE | INDIA Page No. 2.73 Qn. No. 37
  • 62. Dr. NGPASC COIMBATORE | INDIA Question Page No. 2.74 Qn. No. 38
  • 63. Dr. NGPASC COIMBATORE | INDIA Page No. 2.74 Qn. No. 38
  • 64. Dr. NGPASC COIMBATORE | INDIA Question Page No. 2.77 Qn. No. 39
  • 65. Dr. NGPASC COIMBATORE | INDIA Page No. 2.77 Qn. No. 39
  • 66. Dr. NGPASC COIMBATORE | INDIA Question Page No. 2.78 Qn. No. 40
  • 67. Dr. NGPASC COIMBATORE | INDIA Page No. 2.78 Qn. No. 40
  • 68. Dr. NGPASC COIMBATORE | INDIA Question Page No. 2.79 Qn. No. 42
  • 69. Dr. NGPASC COIMBATORE | INDIA Page No. 2.79 Qn. No. 42
  • 70. 70