Professional Documents
Culture Documents
Accommodation:
House Rent Allowance (when only Allowance is given) Xxxxx -------- xxxxx
Rent Free Unfurnished/Furnished Accommodation
when Option is given
House Rent Allowance
OR.
45% or MTS/Basic Salary Whichever is Higher
Xxxxxxx
Wages of Watchmen, Gardner at house paid by employer Xxxxxxx
Salary of Mali & Chowkidar paid by employer Xxxxxxxx
Conveyance:
Conveyance Allowance Xxxxx --------- xxxxxxx
Entertainment :
Actual entertainment expenses on behalf of organization/reimbursed Totally exempt
Sr. Items Govt. Provident Fund Recognized Provident Fund Unrecognized Provident
Fund
1. Employee’s Contribution Already included Already included Already included
2. Employer’s Contribution Not Taxable Exempt upto 10% of basic salary extra will be
taxable Not Taxable
3. Interest Credited Not Taxable Exempt if rate of interest is 16% and amount is less
than 1/3rd of basic salary
Extra will be taxable Not taxable
4. Receipt of accumulated balance Not Taxable Not Taxable Included to the extent of
employer’s contribution and interest thereon
Conveyance Expenditures
(leasing rentals paid by employer) Xxx Totally exempt --------
Part time chowkidar Xxx ------ Totally taxable
Free lodging and boarding facility provided by a hotel Xxx Totally exempt ------------
Insurance Money received on maturity xxxxx Totally exempt -------------
Reimbursement of water and electricity Totally taxable
(After in 12 months)
Gain –Capital loss (if any) = Net capital gain xxxxx 25% of gain is exempt Remaining
will be taxable
Gain on sale of NIT units
Sales – cost = net gain xxxx Totally exempt up to June 2010 ------------------
Interest on security
Interest on security (Gross) xxxxx ----- Totally taxable
(if net interest is given (Net x 100/90) (Adjustment) xxxxx ----- Totally taxable
Note: if salary income is more than 50% of Taxable income, the person will be treated
as salaried
Computation of Tax
There are two types of Tax rates
(1). In case of salaried men no tax payable shall be charged if the taxable income is up
to Rs. 150000
(2) In case of salaried women not tax payable shall be charged if the taxable income is
up to Rs. 200,000
Gross Tax (Tax Liability) [after application of the above Table of tax slabs]
Less:
Tax concession allowed for full-time Teacher or researcher (75% of tax payable)
Less:
Tax rebate allowed for Senior citizen (50% of tax payable)
60 years of age or above
earning income upto Rs. 4,00,000
Less:
AVERAGE RELIEF
Amount admissible for Average relief
Formula:-
Less:
Income Tax credit on Share income from Association of Person (Adjustment)
Formula:-
NET TAX
TAXABLE INCOME
Less:
(Adjustment) Foreign Tax Credit
1. Foreign Income tax paid
OR
2. Formula: -
Add:
Golden hand shake (Adjustment) Separate average rate of tax
Note: if term of employment is more than 1 year e.g., 2 years or 3years, in this case rate
of preceding 2 or 3 years will be given in question to calculate the average rate, and
this average rate will be applied to the amount.
Add:
Taxes on separate block of income, separate rates are given.
ANSWER