Income tax (Handout-2)

By Renu verma
Salary (Perquisites)

Question 1

Compute the income under the head salary of Vinay for the AY 2016-17 from the following particulars:

1)Basic salary Rs 12,000 p.m 2) DA- Rs200 p.m (which enters the retirement benefit as per the terms
of the employment) 3) Bonus- Rs 4,000 p.a 4) Rent- free accommodation in Delhi provided by X Ltd., the
employer, fair rental value being Rs 20,000. 5) The cost of furniture there in is Rs 10,000. 6)
Entertainment allowance- Rs 500 p.m 7) Free use of motor car of 1.8 liters. engine capacity with driver,
partly for official purpose and partly for personal purpose by the company.

Question 2

A is employed as a project manager of XYZ Ltd. He has furnished the following particulars in respect of
his income for the year ending on 31.3.2016

1) Salary including DA Rs 1,40,000

2) He has been provided a Rent-free unfurnished bunglow in the factory premises at Pune. Fair
rental value Rs 3000 p.m
3) The co. pays in respect of his son, fees of Rs 2400 during the year directly to the college.
4) The co. employs a watchman and pays Rs 300 p.m for looking after the bunglow of A.

Compute income under the head salary for the AY 2016-17. Assume population of Pune exceeds 25 L.

Question 3

Mrs. R, finance manager of D Ltd., New Delhi furnishes the following particulars for the previous year
2015-16. [B.COM (H), 2004(Modified)]

1) Basic salary Rs 16,000 p.m

2) DA Rs 2,000 p.m
3) Bonus 3 months basic pay
4) Commission Rs ,2000 p.m
5) Entertainment allowance Rs 12,000 p.a
6) Rent-free unfurnished accommodation in Delhi provided by the co. for which co. pays a rent of
Rs 2,600 p.m
7) Housing loan of Rs 5,00,000 at the interest rate of 6% p.a was advanced on 1-10-2015 (no
repayment made during the year, however, loan is repayable within 10 years). Assume SBI rate
is 8.5% on 1st April.
8) A Maruti esteem car which was purchased by the co. on 10-8-2011 and put to use on the same
date for Rs 4, 00,000 was sold to the assessee on 16-9-2015 for Rs 1, 80,000.
Income tax (Handout-2)
By Renu verma
9) D Ltd provides tea /coffee to R in office (employers expenditure being Rs 6000 p.a). Besides D
Ltd provides Free lunch during office hours ( cost being Rs 120 per meal for 300 working days,
amount recovered from R is Rs 20 per meal
10) A titan watch costing Rs 4,800 was gifted by the company on the foundation day of the
company.

Question 4

X (age: 42 years) receive the following incomes from A Ltd. during the year ending March 31, 2016:

Salary Rs 40,000 p.m , leave travel concession for the proceeding on leave (actual expenditure on rail
fare : Rs 14,100) is Rs 13800, Reimbursement of ordinary medical expenses for treatment of X and his
family members in a private clinic Rs 31,300, besides X enjoys the following perks:

Rent- free unfurnished house at Noida (population: 24 lakh). House is owned by the employer. Employer
incurs an expenditure of Rs 40,000 for maintenance of garden attached the house. Expenditure of Rs
40,000 includes salary of Rs 24,000 paid by the employer to the Gardner.

The employer provides two watchmen (salary: Rs 700 p.m per person).

Interest free loan for purchasing home appliance (amount: Rs 1, 20,000; date of taking loan: March 1
2012. Amount o/s between April, 2015 and November 30, 2015: Rs 76,000 and after November 3, 2015:
Rs 44,000). The SBI lending rate for similar loan on April 1, 2015 is 18.5%

Find out gross total income of X for the AY 2016-17.

Question 5

Compute the taxable income of Mrs. R who works in a private company since 1-3-2012 for the AY 2016-
17.

1) A car of 1.4 liters engine cubic capacity is provided by the company for the official and personal
use and all expenses of running and maintenance of car and salary of the driver are borne by the
employer.
2) She is in grade Rs 10,000-500-20,000, plus a dearness allowance @20% of his basic pay.
3) She spends Rs 1, 00,000 in London for getting medical treatment of her child and travelling
expenditure for both of them is Rs 40,000.RBI limit on 1 April 2015 in respect of medical
treatment from foreign countries is Rs 2, 00,000.