Académique Documents
Professionnel Documents
Culture Documents
SUBMITTED BY
HARSHAD M. NAGARKAR
ROLL NO.
PROJECT GUIDE
[1]
ACKNOWLEDGEMENT
I, would take this opportunity to thank the University of Mumbai for providing
me an opportunity to study on a project on Income from salary. This has been a
huge learning experience for me.
With great pleasure I take this opportunity to acknowledge people who have
made this project work possible. First of all I would sincerely like to express my
gratitude towards my project Guide Prof. VIVEK BOHIR for having shown
so much flexibility, guidance as well as supporting me in all possible ways
whenever I needed help. I am thankful for the motivation provided by my
project guide throughout and helped me to understand the topic in a very
effective and easy manner.
I would like to thank Principal Dr. V. S. Shivankar, and the coordinator of the
course Prof. K.G.Tapase for their indirect support throughout. Aniket Patil.
Without their support and conviction this project would not have been possible.
I acknowledge my indebtedness and express my great appreciation to all people
behind this work.
Signature
Harshad Nagarkar
[2]
DECLARATION
Date: - ---------------------
-----------------------
[3]
CERTIFICATE
This is to certify Harshad Milind Nagarkar Student of M.com. Sem. - III has
completed this project on Income from salary and has submitted a
satisfactory report under the guidance of Prof. in the partial fulfillment of
M.com.Sem.-III course of University of Mumbai in the academic year 20142015
-------------------Project Guide
-------------------Coordinator
--------------------------External
[4]
------------------principal
OBJECTIVES
After reading this lesson, you should be able to understand:
Classification of income into various heads.
Concept of salary income
Incomes forming part of salary
The computation of basic salary in grade system
[5]
RESEARCH METHODOLOGY
SECONDARY DATA
The secondary data has been collected from books, internet and research engine.
There has been immense and valuable data which put forth for the compulsion
of my project.
Index
Sr.
Title
[6]
page no.
Introduction to salary
1-9
10-16
7-20
21-22
23-29
Computation of salary
30-37
Conclusion
38
Biligophy
[7]
39
Chaper1
INCOME FROM
SALART (U/S 1517)
INCOME FROM
HOUSE PROPERTY
U/S 22-27
HEADS OF
INCOME
U/S (28-44)
[8]
CAPTIAL GAINS
U/S (45-55)
INCOME FROM
OTHER SOURCE S
U/S (56-59)
[9]
Meaning of salary
The term salary usually refers to a payment for services. It means remuneration
for
services rendered to another person.
Basis of charge
Definition of salary
to
Characteristics of Salary
[11]
Chapter 2
Allowances
Extra compensation paid by the employer, apart from salary, due to presence of
some unusual conditions in rendering the service is called allowance.
[12]
Some common allowance, which are exempt to the extent of amount received or
the received other limit specified, whichever is less;
sr
no
1
Nature of Allowance
Entertainment Allowance
It is the amount paid by employer for availing entertainment services. Under
section 16(ii) of Income Tax Act, 1961 it is entitled to deduction in tax from is
salary. But in this case deduction is given to his gross salary which also includes
entertainment allowance. Deduction in tax against this allowance can be divided
into two parts :
In case of Government employee entitled to minimum deduction of
[14]
Daily Allowance
effects.
Should be spent by the employee for
meeting the daily charges incurred on
Conveyance allowance
a tour or transfer.
Should be used by the employee to
meet the expenditure on
conveyance in performance of official
Helper allowance
duties
Should be used by an employee to
meet the expenditure on a helper who
assists him in the performance of
Academic allowance
official duties
Should be used by the employee for
his academic research and training
Uniform allowance
pursuits.
Should be spent by the employee for
purchasing/maintaining office uniform
for official duties.
[15]
[16]
AMOUN
AMOUN
T
XXX
xxx
xxx
xxx
XXX
[17]
GRATUITY
1. Government Employee: Fully exempted from tax u/s 10(10)(i).
2. Non-Govt. Employee:
(a) Employee covered by Payment of Gratuity Act,1972
AMOUN
AMOUN
T
XXX
xxx
xxx
XXX
PENSION
[18]
Amount Taxable
Fully exempted u/s 10(10A)(i)
( Central/State/Local
Authority or Statutory Corporation)
Non-Govt. employee who has also
Amount Received
received
Pension
Amount Received
received
Pension
Chapter 3
[19]
Perquisite
Under section 17(2) of Income Tax Act, 1961 perquisite is defined as:
Amount paid for the rent-free accommodation provided to the assessed by
his employer
Any concession in the matter of rent respecting any accommodation
provided to the assesses by his employer
Any benefit or amenity granted or provided free of cost or at concessional
rate in any of the following cases:
[20]
Type
of Taxable
amt
employee
unfurnished
accommodation
(1)
Taxable amt
furnished
accommodation
(3)
for
a.
Government
employees
15% of salary if
population
exceeds
25
lakhs.
10% of salary if
population
is
between 10 to
25 lakhs.
7.5% of salary
if population is
below 10 lakhs.
If house is
10% per annum (1) Plus (2)
not owned 15% of salary or lease of
cost
of
by
the rent, whichever is furniture or rent
employed
lower
payable
Note: Salary for the purpose of above includes basis, D.A, bonus, commission,
free and all taxable allowance by whatever name called, but doesnt include
allowance which are exempt or doesnt form part of salary for the calculation of
retirement benefit and also does not include the employers contribution to PF.
2. Car Facility
Motor car facility provided by an employer is taxable in the hands of the
employee on the
following basis.
[21]
Car is
owned by
Car is
maintained by
Employer
Employer
Employee
Used by
employees for
Person
chargeable
Official
purpose
Not a Perquisite
Not
applicable
Personal
Purpose
Maintenance +
10%
Depreciation
Specified
Employee
Both Purpose
Official
purpose
Not a Perquisite
Personal
Purpose
Both Purpose
Official
purpose
Personal
Purpose
Employee
Taxable Value
Employer
Both Purpose
Hire charges of
the car /10%
depreciation
Rs.600/900 p.m
Not a Perquisite
Not
applicable
Specified
Employee
Not
applicable
Maintenance
Actual
expenditure
incurred - Rs
1,800 /2,400+
(Rs 900p.m. for
driver, if any)
Specified
Employee
Not
applicable
# depends on the cubic capacity of the car whether it exceeds 1.6 liters or not.
Employee
Any Purpose
Not a Perquisite
[22]
Situations (1)
If the employer
purchases it from
outside:
if the employer
provides it from its own
source:
Chapter 4
DEDUCTION FROM SALARY
The following two deductions from Gross salary are allowed vide section 16
[23]
[24]
15000
15000
5000______
Chapter 5
[25]
xxxxx
xxxxx
xxxxx
xxxxx
xxxxx
XXXXX
[26]
Step3 : This calculation is only applicable where the employer has sanctioned
leave to the employee in excess of 30 days for every completed year of service.
Particulars
Amount
xxx
xxx
[27]
Amount
Amount
xxx
xxx
xxx
xxx
xxx
PROVIDENT FUND
[28]
xxx
xxx
Particulars
Contribution
by
Assessors
contribution
Employers
contribution
Statutory
Employers and
employees
Deduction u/s
80c
Not taxable
Interest
credited
Fully exempted
Recognized
Employers and
employees
Deduction u/s 80c
Amount exceeding
12% of salary is
taxable
Exempt up to 9.5%
p.a. any excess is
taxable.
Unrecognized
Employers and
employees
No income tax
benefit
Not taxable at the
time of
contribution
On Employees
contribution
taxable under the
head Other
Sources
On Employers
contribution
not taxable at the
time of credit.
SR NO.
1.
TOTAL INCOME
Where the total income
RATE OF TAX
Nil
3.
4.
200000
Where the total income
10 % of the amount by
500000
Where the total income
1000000.
Where the total income
500000
Rs. 130000 plus 30% of
Rates of tax for every individual, resident in India, who is of the age of sixty
years or more but less than eighty years at any time during the financial
year.
SR NO.
1.
TOTAL INCOME
Where the total income
does not exceed Rs.
250000
[30]
RATE OF TAX
Nil
2.
3.
4.
10 % of the amount by
500000
Where the total income
1000000.
Where the total income
500000
Rs. 125000 plus 30% of
3.
500000
Where the total income
20 % of the amount by
1000000
Where the total income
[31]
Amount
1. salary
gross- net + deductions
due/ deemed to accrue in India
advance/ arrears received
voluntary payments
less:- exempt u/s 10
2. allowances
dearness allowances
entertainment allowances
leave travel allowances( less
exempt u/s10(10) )
house rent allowances ( less
XXXXX
commuted value
[33]
b. otherwise, of full
XXXXX
commuted value
5. Gratuity (gross loss: exempt u\s
10(10)
govt employee fully exempt
employee under payment of
gratuity act least of
a) Salary p.m x 15/26 x completed
year of service.
b) Rs. 10,00,000
c) Gratuity actually received.
Other employee:- lower of
a. Average salary of last 10
months x 3/2 x no. of years
of service
b. Rs. 10,00,000
c. Gratuity actually received.
6. Fees and Commissions
7. Perquisites
Perquisites taxable for all
XXXXX
employees
Perquisites not taxable at all.
[34]
employment
Employers contribution to
PF + interest thereon
Less:-
XXXXX
Compensation to
XXXXX
workman/ VRS
Payment from statutory
P.F
Payment from
superannuation fund.
9. Leave encashment ( gross less
XXXXX
Professional tax
XXXXX
XXXXX
XXXXX
XXXXX
XXXXX
XXXXX
[36]
Solution:
Rs.
2,00,000
1,00,000
1000
56,000
10,000
1,50,000
80,789
1,30,000
Gross Salary
7,27,769
Working notes:
1.
[38]
5,00,0000
1,00,000
80,000
64,000
2,56,000
2,00,000
56,000
2.
commuted pension {Sec 10(10)}
Amount received
(Less) Exempted (3,00,000*3/2*1/3)
Taxable
3,00,000
1,50,000
1,50,000
Rs.3,30,000
Rs. 10*20,0000 =2,20,000
Rs.3,00,000
330/30*20,000 =2,20,000
[39]
Received
Exempt
Taxable
= Rs. 3, 30,000
= Rs. 2, 00,000
= Rs. 1, 30,000
CONCLUSION
1. The employee or individual who earn salary has to pay tax on income of
previous year in the assessment year.
2. They can also get benefits of deduction which help them to reduce tax
liability.
3. The individual has to pay tax in advance if his tax liability is more than
Rs. 10000 in previous year through assumption .
[40]
Bibliography
www.google.com
[41]