Page 223 - DCOM301_INCOME_TAX_LAWS_I

Income Tax Laws – I

Notes Lunch Allowance 300 per month
Transport Allowance 900 per month
Deputation Allowance 1,000 per month
Children Education Allowance (for 3 children) 400 per month

House Rent Allowance (He is living in his own house) 1,000 per month
Compute his gross salary for the assessment year 2013–14
6. Mr. X is employed in ABC Ltd., Amritsar and is getting basic pay of ` 11,200 per month,
dearness allowance 70% of basic pay (half of it is included for retirement benefits). The
employee is working in the purchase department and is allowed commission @ 1.5% on
th
purchase turnover of ` 39 lakhs up to 28 February, 2013. Employer has paid house rent
allowance of ` 5,000 per month. The employee has paid rent of ` 3,000 per month. The
employee has submitted his resignation with effect from 1 March, 2013. Compute his
st
gross salary for assessment year 2013–14:
7. ‘A’ furnishes the following details of his salary income for the financial year 2012–13:

(a) Salary 4,000 p.m.
(b) Dearness Allowance 500 p.m.
(c) Entertainment Allowance 200 p.m.
(d) Employer’s and his own contribution to unrecognised Provident Fund 2,600 each

(e) Interest on the accumulated balance of provident fund @ 12% p.a. 2,600
(f) City Compensatory Allowance 60 p.m.
(g) Medical Allowance 1,500 p.a.
(h) Project Allowance 600 p.m.

(i) He is also provided with an unfurnished accommodation for which his employer
charges ` 200 p.m. The fair rent of house is ` 12,000 per annum. The house is owned
by the employer.
Compute his taxable income from salary for the assessment year 2013–14.
8. Compute taxable salary income of Mr. Z of Kanpur for the assessment year 2013–14 based
on the following information:
Salary @ ` 4,000 p.m. (serving since 1.4.1996) 48,000
Entertainment Allowance 5,000
Bonus 10,000

Dearness Allowance (not recognised for computing retirement benefit) 2,000
Employer’s contribution to provident fund (recognised) 4,000
Education Allowance for one child 2,700
Lunch Allowance 7,200

Rent-free unfurnished quarters (valued) 6,000
Medical expenses met by employer 600
Reimbursement of hotel bills (necessary for duty) 100

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