Mr. David is employed in vertex co.ltd. since 1.4.17 in a grade 55000-5000-90000 of Mumbai his salary details for the financial year 2020-2021 are given below:
i) Basic salary
ii) Dearness allowance 50% of basic salary(eligible for retirement benefits); Potation
iii) HRA Rs 10,000 p.m.(rent paid by employee Rs 15,000 p.m);
iv) Bonus Rs 30,000 per annum;
v) Both David & his employer contribute Rs 15,000 each per month towards RPF vi) A titan watch worth Rs. 16000 was given by employer free of cost.
vii) A car of 1.4 liter was provided with driver and all the expenses were met by company.
viii) A laptop is given for use worth Rs. 42000.
ANSWER ALL THE FOLLOWING QUESTION:-
1. What will be the taxable HRA
2. What will be taxable RPF
3. What will be taxable value of gift:
4. What will be the taxable value of laptop given for use:
5. What will be the taxable value of car:
6. What will be the taxable salary
Answers
Answer:
Answer 3. (c)
Computation of total income of Mr. David for the assessment year 2012-13
`
Basic salary 8,40,000
Dearness allowance 50% of basic salary 4,20,000
Bonus 30,000
House rent allowance received 1,20,000
Less: Exemption U/s. 10(13A)
(a) Actual house rent allowance 1,20,000
(b) Rent paid above 10% of salary
` 1,80,000 – ` 1,26,000 54,000
(c) 50% of salary 6,30,000
Least of above is exempt 54,000 66,000
13,56,000
Employers contribution to Pension fund of employee 1,80,000
Gross Total Income 15,36,000
Less : Deduction under section 80CCD
Own contribution upto 10% of salary 1,26,000
Employers contribution 1,80,000
3,06,000
but limited in view of section 80 CCE 1,00,000
Total Income 14,36,000
In the hands of employer : Any sum paid by the assessee as an employer by way of contribution towards a
pension scheme referred to section 80 CCD on account of an employee is deductible to the extent it does
not exceed 10% of the salary of the employee in the previous year.
In view of the above, though the employer has contributed ` 1,80,000 to the pension fund account of the
employee David, the deduction under section 36(1)(iva) cannot exceed 10% of the salary of the employee.
Salary for this purpose means basic pay plus dearness allowance if the terms of employment so provided
but excludes all other allowances and perquisites.
10% of basic salary and DA is ` 1,26,000 which is deductible against the business income of the employer.
The excess contribution of ` 54,000 is inadmissible expenditure in the hands of employer.