R, an individual employed by a company , draws a salary of 12000PM and city compensatory allowance of 1000PM . his employer gives him the choice of one of the two alternatives given below
1 getting a rent free unfurnished accommodation at Delhi for which the rent is 13000PM which the company will pay ,
2 getting HRA of 13000PM
R opts for second alternative and takes a house in ghaziabad at a rent of 13000PM
has he made a wise choice? discuss
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1. Income Method GNPFC = Compensation of employees + Rent + Interest + Undistributed Profits + Dividend + Net
Factor Income from Abroad + Consumption of fixed capital = 1850 + (400 +500 +900 + 200) + (-) 50+ 100 = 3900
CRORE Note: o GNPFC = NNPFC + Consumption of fixed capital o NNPFC = Compensation of employees + Rent +
Interest + Undistributed Profits + Dividend + Net Factor Income from Abroad o Compensation of employees is
income from work which includes wages and salaries in kind and cash, and contribution to social securities
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