Question

Mr. X is an employee of Public Sector Bank. He is being transferred from his home station to Pune from July 1,2020. Mr. X ‘s salary package is as under:


Salary: Rs. 46,000 per month

Dearness Allowance: Rs.8,000 per month

House Rent Allowance: Rs.25,000 per month

Commission Received: Rs. 90,000 per annum

House Rent to be paid: Rs,21,000 per month

Alternatively, Mr. X was offered a house owned by the employer along with furniture whose original cost is Rs.100,000.


Please state with detailed calculation, among the two alternatives, which one will be beneficial to Mr. X from net earning perspective.

Answer 1

Answer:

He is being transferred from his home station to Pune from July 1,2020. Mr. X 's salary package is as under: Salary: Rs. 46,000 per month. Dearness Allowance: Rs.8,000 per month. House Rent Allowance: Rs.25,000 per month.

Answer 2

Answer:

$1) 1,40,000\\2) 69,000$

Explanation:

Given- salary, DA, House rent allowance, the commission received, house rent payment, and furniture cost.

To find- Net earning

Solution-

Net Earning= Salary+Dearness Allowance+House Rent Allowance+Commission Received-House Rent to be paid

= $46K+8k+25k+90K-21k=1,40,000$

Alternatively, the equation is the same except one-time payment of a $1,00,000$

Making the total to $1,69,000-1,00,000=69,000$

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