Mr. X is a regular employee of Rama & Co., in Gurgaon. He was appointed on 1.4.2018
in the scale of Rs. 20,000 – Rs. 1,000 – Rs. 30,000. He is paid 10% D.A. & Bonus equivalent
to one month pay based on salary of March every year. He contributes 15% of his pay and
D.A. towards his recognized provident fund and the company contributes the same amount.
He is provided free housing facility which has been taken on rent by the company at Rs. 10,000 per month. He is also provided with following facilities:
(i) Facility of laptop costing Rs. 50,000. (ii) Company reimbursed the medical treatment bill of his brother of Rs. 25,000, who is dependent on him. (iii) The monthly salary of Rs. 1,000 of a house keeper is reimbursed by the
company. (iv) A gift voucher of Rs. 10,000 on the occasion of his marriage anniversary. (v) Conveyance allowance of Rs. 1,000 per month is given by the company towards
actual reimbursement. (vi) He is provided personal accident policy for which premium of Rs. 5,000 is paid
by the company. (vii) He is getting telephone allowance @ Rs. 500 per month. (viii) Motor car owned by the employer (cubic capacity of engine exceeds 1.60 litres)
provided to the employee from 01.04.2018 meant for both official and personal
use. Repair and running expenses of Rs. 45,000 from 01.4.2018 to 31.03.2019
were fully met by the employer. The motor car was self-driven by the employee. Compute the salary of Mr. X chargeable to tax in the assessment year 2019-20
Answers
Explanation:
Particulars `
Basic salary [(` 10,000 × 10) + (` 11,000 × 2)] 1,22,000
Dearness Allowance (100% of basic salary) 1,22,000
House Rent Allowance (See Note below) 21,300
Gross Salary 2,65,300
Note: Computation of Taxable House Rent Allowance (HRA)
Particulars April-May
(`)
June-Oct
(`)
Nov-Dec
(`)
Jan
(`)
Feb-
March (`)
Basic salary per month 10,000 10,000 10,000 10,000 11,000
Dearness allowance (included in salary
as per terms of employment) (50% of
basic salary) 5,000 5,000 5,000 5,000 5,500
Salary per month for the purpose of
computation of house rent allowance 15,000 15,000 15,000 15,000 16,500
Relevant period (in months) 2 5 2 1 2
Salary for the relevant period (Salary
per month × relevant period) 30,000 75,000 30,000 15,000 33,000
Rent paid for the relevant period Nil 30,000
(`6000x5)
16,000
(`8000x2)
8,000
(`8000x1)
16,000
(`8000x2)
House rent allowance (HRA) received
during the relevant period (A)
12,000
(`6,000×2)
30,000
(`6,000×5)
12,000
(`6,000×2)
7,000
(`7,000×1)
14,000
(`7,000×2)
Least of the following is exempt [u/s
10(13A)]
N.A.
1. Actual HRA received - 30,000 12,000 7,000 14,000
2. Rent paid (–) 10% of salary - 22,500 13,000 6,500 12,700
3. 40% of salary (Residence at
Ghaziabad – June to Oct 2019)
- 30,000
(40% ×
`75,000)
15,000
(50% ×
`30,000)
7,500
(50% × `
15,000)
16,500
(50% ×
`33,000)
50% of salary (Residence at Delhi– Nov
19 - March, 20)
Exempt HRA (B) Nil 22,500 12,000 6,500 12,700
Taxable HRA [Actual HRA (–) Exempt
HRA] (A-B) 12,000 7,500 Nil 500 1,30050% of salary (Residence at Delhi– Nov