Example 6
For Assessment Year 2016-17
Illustrating Valuation of perquisite and calculation of tax in the case of an employee below the age of 60 years of a Private Company posted at Delhi and repaying House Building Loan ( With valid PAN furnished to employer).
| S.No. | Particulars | Rupees |
| 1 | Salary | 4,00,000 |
| 2 | Dearness Allowance | 1,00,000 |
| 3 | House Rent Allowance | 1,80,000 |
| 4 | Special Duties Allowance | 12,000 |
| 5 | Provident Fund | 60,000 |
| 6 | LIP | 10,000 |
| 7 | Deposit in NSC VIII issue | 30,000 |
| 8 | Rent Paid by the employee for house hired by her | 1,20,000 |
| 9 | Repayment of House Building Loan (Principal) | 60,000 |
| 10 | Tuition Fees for three children (Rs.10,000 per child) | 30,000 |
Computation of total income and tax payable thereon
| S.No. | Particulars | Rupees |
| 1 | Gross Salary (Basic+DA+HRA+SDA) | 6,92,000 |
| Less: House rent allowance exempt U/s 10 (13A) Least of:(a). Actual amount of HRA received. :Rs.1,80,000 (b). Expenditure on rent in excess of 10% of salary(Including D.A.)assuming D.A. is included forretirement benefits (1,20,000- 50,000) :Rs. 70,000(c). 50% of salary (including D.A) : Rs. 2,50,000 | 70,000 | |
| 2 | Gross Total Taxable Income | 6,22,000 |
| Less: Deduction U/s 80C(i). Provident Fund : 60,000(ii). LIP : 10,000(iii). NSC VIII Issue : 30,000(iv). ayment of HBA : 60,000 (v). Tuition Fees (Restricted to two children) : 20,000Total : 1,80,000Restricted to 1,50,000 | 1,50,000 |
| Total Income | 4,72,000 | |
| Income Tax thereon/payable | 20,200 | |
| Add:(i). cation Cess @2%(ii). Secondary and Higher Education Cess @1% | 404202 | |
| Total Income Tax payable | 20,806 | |
| Rounded off to | 20,810 |
Example 7
For Assessment Year 2016-17
A. Calculation of Income tax in the case of a retired employee above the age of sixty years but below the age of 80 years and having gross pension of:
iv) Rs.4,50,000/-,v) Rs.8,00,000/- ,vi) Rs. 12,50,000/-. B What will be the amount of TDS in case of above employees, if PAN is not submitted by them to their DDOs/Offices:
| Particulars | Rupees (i) | Rupees (ii) | Rupees (iii) |
| Gross Pension | 4,50,000 | 8,00,000 | 12,50,000 |
| Contribution of P.P.F. | 70,000 | 1,00,000 | 1,50,000 |
Computation of Total Income and tax payable thereon
| Particulars | Rupees (i) | Rupees (ii) | Rupees (iii) |
| Gross Pension | 4,50,000 | 8,00,000 | 12,50,000 |
| Less: Deduction U/s 80C | 70,000 | 1,00,000 | 1,50,000 |
| Taxable Income | 3,80,000 | 7,00,000 | 11,00,000 |
| Tax thereon (after rebate u/s 87A) | 6,000 | 60,000 | 1,50,000 |
| Add:(i) Education Cess @ 2%.(ii) Secondary and Higher Education Cess @1% | 12060 | 1200600 | 30001500 |
| Total tax payable | 6,180 | 61,800 | 1,54,500 |
| TDS under sec. 206AA in case where PAN is not furnished by the employee | 24,000 | 90,000 | 1,70,000 |
Example 8
For Assessment Year 2016-17
A. Calculation of Income tax in the case of a retired employee above the age of 80 years and having gross pension of:
i) Rs.5,00,000/-,ii) Rs.8,00,000/- ,iii) Rs. 12,50,000/-. B What will be the amount of TDS in case of above employees, if PAN is not submitted by them to their DDOs/Offices:
| Particulars | Rupees (i) | Rupees (ii) | Rupees (iii) |
| Gross Pension | 5,00,000 | 8,00,000 | 12,50,000 |
| Contribution of P.P.F. | 80,000 | 1,20,000 | 1,50,000 |
Computation of Total Income and tax payable thereon
| Particulars | Rupees (i) | Rupees (ii) | Rupees (iii) |
| Gross Pension | 5,00,000 | 8,00,000 | 12,50,000 |
| Less: Deduction U/s 80C | 80,000 | 1,20,000 | 1,50,000 |
| Taxable Income | 4,20,000 | 6,80,000 | 11,00,000 |
| Tax thereon | Nil | 36,000 | 1,30,000 |
| Add:(i) Education Cess @ 2%.(ii) Secondary and Higher Education Cess @1% | 720360 | 26001300 | |
| Total tax payable | Nil | 37,080 | 1,33,900 |
| B. TDS under sec. 206AA in case where PAN is not furnished by the employee | Nil | 37,080 | 1,33,900 |
Example 9
Exemption u/s 10 (13A)
1. Mr. A, employed with XYZ Ltd. Up to 31.10.2015, received following emoluments :
| S.No. | Particulars | Rupees |
| 1. | Basic pay p.m. | 13,000 |
| 2. | Bonus for the year received in July, 2015 | 72,000 |
| 3. | Club facility (for private use only) Expenditure by employer p.m. | 700 |
| 4. | House Rent Allowance p.m. | 2,800 |
| 5. | Employer’s contribution to URPF p.m. (Mr. A also made equal contribution) | 1,000 |
| W.e.f. 01.11.2015, Mr. A joined PQR Ltd., with following pay package : | ||
| 1. | Basic pay p.m. | 18,000 |
| 2. | House Rent Allowance p.m. | 1,600 |
| 3. | Club Facility (for private use only) Expenditure by employer p.m. | 1,100 |
| 4. | Use of car for journey between office and residence – Employer’s expenditure p.m. | 600 |
| 5. | Employer’s contribution to RPF p.m. (Mr. A also made equal contribution) | 2,000 |
| Other particulars of Mr. A are as under : | ||
| 1. | Mr. A resides at Amritsar paying a monthly rent of | 3,500 |
| 2. | Mr. A’s income from other sources | 95,000 |
| 3. | Mr. A contributed to LIC/PPR/NSC etc. | 20,000 |
| Compute Mr. A’s taxable income and tax liability for A.Y. 2016-17. | ||
Computation of Tax
| S.No. | Particulars | Rupees | |
| 1. | Income from Salary | ||
| (a) From XYZ Ltd. | |||
| Basic pay (Rs.13,000 x 7) | 91,000 | ||
| Bonus | 7,200 | ||
| Club facility (Rs.700 x 7) | Rupees | 4,900 | |
| H.R.A. (Rs.2,800 x 7) | 19,600 | ||
| Less : Exempt u/s 10(13A) | 15,400 | 4,200 | |
| Employer’s Contribution to U.R.P.F. | 1,07,300 | ||
| (b) From PQR Ltd. | Rupees | ||
| Basic pay (Rs.18,000 x 5) | 90,000 | ||
| H.R.A. (Rs.1,600 x 5) | 8,000 | ||
| Less : Exempt u/s 10(13A) | 8,000 | ||
| Club Facility (Rs.1,100 x 5) | 5,500 | ||
| Facility of Car (not taxable as perquisite) | 15,400 | ||
| Employer’s Contribution to R.P.F. | 95,500 | ||
| Gross Salary | 2,02,800 | ||
| Less: Deduction | —– | ||
| Net Salary | 2,02,800 | ||
| 2. | Income from Others Sources | 95,000 | |
| Gross Total Income | 2,97,800 | ||
| Less : Deduction u/s 80C | |||
| : Contribution to LIC/PPF/NSC | Rs. 20,000 | ||
| : Contribution to RPF ( Rs.2000 x 5) | Rs. 10,000 | 30,000 | |
| Total Income | 2,67,800 | ||
| Computation of Tax Liability | |||
| Tax payable on Rs.2,67,800 | 1,780 | ||
| Less : Rebate u/s 87A | 1,780 | ||
| Net Income-tax payable | Nil | ||
| Add : Surcharge | Nil | ||
| Add : EC @ 2% | — | ||
| Add : S&HEC @ 1% | — | ||
| Total Tax Payable | Nil | ||
Example 10 2.
One Computation of Taxable Salary and allowances, Deduction for Interest on Housing Loan and Deduction u/s 80C. Mr. X, a Central Govt. Officers in Delhi, is receiving Basic Pay Rs.23,720, grade Pay Rs.7,600, DA at prescribed rates, transport allowances @ Rs.3200+DA thereon, and HRA 30% of basic pay + grade pay (though living in his own house). His date of increment is Ist July. The following are other particulars of his income. Compute his taxable income and tax payable, for A.Y.2015-16.
| S.No. | Particulars | Rupees |
| 1. | Honorarium for valuation of answer books of a departmental examination | 3,000 |
| 2. | Fee for work done for a private body (1/3rd of fees has been retained byGovt.) | 6,000 |
| 3. | Contributions to G.P.F. p.m. | 4,700 |
| 4. | Postal Life Insurance Premium financed from G.P.F. p.m. | 280 |
| 5. | Contribution to Central Govt. Employees Group Insurance Scheme p.m. | 500 |
| 6. | Life Insurance Premium (being a Life Insurance Policy of Rs.1,00,000 taken in name of his wife before 1.04.2012) | 10,500 |
| 7. | Contribution to Public Provident Fund | 10,000 |
| 8. | Repayment of HDFC loan borrowed after 1.04.1999 EMI Rs.25,000 (Towards loan Rs.95,000, towards interest Rs.2,05,000) | 3,00,000 |
Computation of Tax
| S.No. | Particulars | Rupees | |
| 1. | Income from Salary | ||
| Basic Pay @ Rs 23,720 p.m | |||
| (March to June ’14) | 94,880 | ||
| @ Rs 24,660 p.m * (July 2014 to Feb 2015) | 1,97,280 | 2,92,160 | |
| 91,200 | |||
| Grade Pay @ Rs 7,600 p.m | |||
| Dearness Allowance | |||
| 1.3.2014 to 30.06.2014 @ 100% i.e., Rs 31,320 p.m | 1,25,280 | ||
| 1.7.2014 to 31.12.2014 @ 107% i.e. Rs 34,518 p.m | 2,07,108 | ||
| 1.1.2015 to 28.02.2015 @ 113% (assumed) i.e., | |||
| Rs. 36,454 p.m | 72,908 | 4,05,296 | |
| House Rent Allowance | |||
| @ 30% of basic pay + grade pay | |||
| 1.3.2014 to 30.06.2014 @ Rs 9,396 | 33,584 | ||
| 1.07.2014 to 28.2.2015 @ Rs 9,678 | 77,424 | 1,15,008 | |
| Transport Allowance | |||
| 1.3.2014 to 30.6.2014 @ Rs 6,400 p.m | 25600 | ||
| 1.7.2014 to 31.12.2014 @ Rs 6,624 p.m | 39,744 | ||
| 1.1.2015 to 28.2.2015 @ Rs 6,816 p.m | 13,632 | ||
| 78,976 | |||
| Less: Exempt u/s 10(14) @ 800 p.m | 9600 | 69,376 | |
| 9,73,040 | |||
| Honorarium | 3,000 | ||
| Fees (2/3 retained by him) | 4000 | ||
| Total Salary | 9,80,040 | ||
| Less: Standard Deduction | – | ||
| Net Salary | 9,80,040 | ||
| 2. | Income from House Property | ||
| Self-occupied u/s 23(2)(a) deemed at nil | |||
| Less: Interest on HDFC Loan | 2,00,000 (-) | 2,00,000 | |
| Gross Total Income | 7,80,040 | ||
| Less: Deduction u/s 80 C | |||
| – GPF @ Rs 4,700/-p.m | 56,400 | ||
| – CGEGIS @ Rs 500/- p.m | 6,000 | ||
| – Life Insurance Premium | 10, 500 | ||
| – Repayment of HDFC Loan | 95,000 | ||
| – Deposit in Public Provident Fund | 10,000 | ||
| 1,77,900 | |||
| 1,50,000 | |||
| Restricted to a maximum of Taxable Income | 6,30, 040 | ||
| Computation of Tax Liability | |||
| Tax payable | 51,008 | ||
| Add: Surcharge | – | ||
| Add: Education Cess | 1020 | ||
| Total Tax Liability | 52,538 | ||