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Inter Test Paper 4 - Salary

The document contains 7 questions regarding the computation of taxable income from salary for individuals in various scenarios. Question 1 deals with the taxable pension of a government employee and private sector employees with and without gratuity. Question 2 covers computation of taxable leave salary for government and non-government employees. The remaining questions concern the valuation of various perquisites and retirement benefits for taxation purposes.

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Srushti Agarwal
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3K views

Inter Test Paper 4 - Salary

The document contains 7 questions regarding the computation of taxable income from salary for individuals in various scenarios. Question 1 deals with the taxable pension of a government employee and private sector employees with and without gratuity. Question 2 covers computation of taxable leave salary for government and non-government employees. The remaining questions concern the valuation of various perquisites and retirement benefits for taxation purposes.

Uploaded by

Srushti Agarwal
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
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Download as PDF, TXT or read online on Scribd
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EKATVAM ACADEMY

TEST PAPER 4 : INCOME FROM SALARY


CA/CMA INTER

QUESTION 1

Mr. Sagar who retired on 1.10.2022 is receiving Rs. 5,000 p.m. as pension. On 1.2.2023,he commuted 60% of his
pension and received Rs. 3,00,000 as commuted pension. You are required to compute his taxable pension assuming:
(a) He is a government employee.
(b) He is a private sector employee and received gratuity of Rs. 5,00,000 at the time of retirement.
(c) He is a private sector employee and did not receive any gratuity at the time of retirement.

QUESTION 2

Mr. Gupta retired on 1.12.2022 after 20 years of service and received leave salary of ₹ 5,00,000. Other details of
his salary income are:
Basic Salary : ₹5,000 p.m. (₹ 1,000 was increased w.e.f. 1.4.2022)
Dearness Allowance : ₹ 3,000 p.m. (60% of which is for retirement benefits)
Commission : ₹ 500 p.m
Bonus : ₹ 1,000 p.m.
Leave availed during service : 480 days

He was entitled to 30 days leave every year.


You are required to compute his taxable leave salary assuming:
(a) He is a government employee.
(b) He is a non- government employee.

QUESTION 3

Compute the taxable value of the perquisite in respect of medical facilities received by Mr. G from his employer during
the P.Y. 2022-23:

Medical premium paid for insuring health of Mr. G ₹ 7,000


Treatment of Mr. G by his family doctor ₹ 5,000
Treatment of Mrs. G in a Government hospital ₹ 25,000
Treatment of Mr. G’s grandfather in a private clinic ₹ 12,000
Treatment of Mr. G’s mother (68 years and dependant) by family doctor ₹ 8,000
Treatment of Mr. G’s sister (dependant) in a nursing home ₹ 3,000
Treatment of Mr. G’s brother (independent) ₹ 6,000
Treatment of Mr. G’s father (75 years and dependent) abroad ₹ 50,000
Expenses of staying abroad of the patient and ₹ 30,000
Limit specified by RBI ₹ 75,000

QUESTION 4

Mr. X retired from the services of M/s Y Ltd. on 31.01.2023, after completing service of 30 years and one month. He
had joined the company on 1.1.1993 at the age of 30 years and received the following on his retirement:
(i) Gratuity Rs. 6,00,000. He was covered under the Payment of Gratuity Act, 1972.
(ii) Leave encashment of ₹ 3,30,000 for 330 days leave balance in his account. Hewas credited 30 days leave
for each completed year of service.
(iii) As per the scheme of the company, he was offered a car which was purchasedon 30.01.2020 by the
company for ₹ 5,00,000. Company has recovered ₹ 2,00,000 from him for the car. Company
depreciates the vehicles at the rateof 15% on Straight Line Method.
(iv) An amount of ₹ 3,00,000 as commutation of pension for 2/3 of his pensioncommutation.

CA VIJAY SARDA | 8956784251/52/53 www.ekatvamacademy.com


(v) Company presented him a gift voucher worth ₹ 6,000 on his retirement.
(vi) His colleagues also gifted him a Television (LCD) worth ₹ 50,000 from theirown contribution.
Following are the other particulars:
(i) He has drawn a basic salary of ₹ 20,000 and 50% dearness allowance permonth for the period
from 01.04.2022 to 31.01.2023.
(ii) Received pension of ₹ 5,000 per month for the period 01.02.2023 to31.03.2023 after commutation
of pension.
Compute his gross total income from the above for Assessment Year 2023-24assuming he has
not opted for the provisions of section 115BAC.

QUESTION 5

Shri Bala employed in ABC Co. Ltd. as Finance Manager gives you the list of perquisites provided by the company
to him for the entire financial year 2022-23:
(i) Domestic servant was provided at the residence of Bala. Salary of domestic servant is Rs. 1,500 per month. The
servant was engaged by him and the salaryis reimbursed by the company (employer).
In case the company has employed the domestic servant, what is the value of perquisite?
(ii) Free education was provided to his two children Arthy and Ashok in a school maintained and owned by the
company. The cost of such education for Arthyis computed at Rs. 900 per month and for Ashok at ₹ 1,200 per
month. Noamount was recovered by the company for such education facility from Bala.
(iii) The employer has provided movable assets such as television, refrigerator and air-conditioner at the
residence of Bala. The actual cost of such assets provided to the employee is Rs. 1,10,000.
(iv) A gift voucher worth Rs. 10,000 was given on the occasion of his marriage anniversary. It is given by the
company to all employees above certain grade.
(v) Telephone provided at the residence of Shri Bala and the bill aggregating to ₹ 25,000 paid by the
employer.
(vi) Housing loan @ 6% per annum. Amount outstanding on 1.4.2022 is ₹ 6,00,000. Shri Bala pays
₹ 12,000 per month towards principal, on 5th ofeach month.
Compute the chargeable perquisite in the hands of Mr. Bala for the A.Y. 2023-24.
The lending rate of State Bank of India as on 1.4.2022 for housing loan may betaken as 10%.

QUESTION 6

Ms. Rakhi is an employee in a private company. She receives the followingmedical benefits from the company
during the previous year 2022-23:

Particulars ₹
1 Reimbursement of following medical expenses incurred byMs. Rakhi
(A) On treatment of her self - employed daughter in aprivate clinic 4,000
(B) On treatment of herself by family doctor 8,000
(C) On treatment of her mother-in-law dependent onher, in a nursing home 5,000
2 Payment of premium on Mediclaim Policy taken on herhealth 7,500
3 Medical Allowance 2,000 p.m.
4 Medical expenses reimbursed on her son's treatment in agovernment hospital 5,000
5 Expenses incurred by company on the treatment of herminor son abroad 1,05,000
including stay expenses
6 Expenses in relation to foreign travel of Rakhi and her sonfor medical treatment 1,20,000
Note - Limit prescribed by RBI for expenditure on medical treatment and stay
abroad is USD 2,50,000 per financial year under liberalized remittance scheme.

Examine the taxability of the above benefits and allowances in the hands of Rakhi.

CA VIJAY SARDA | 8956784251/52/53 www.ekatvamacademy.com


QUESTION 7

From the following details, find out the salary chargeable to tax for the A.Y.2023-24 assuming he has not opted for
the provisions of section 115BAC-

Mr. X is a regular employee of Rama & Co., in Gurgaon. He was appointed on1.1.2022 in the scale of ₹ 20,000 - ₹
1,000 - ₹ 30,000. He is paid 10% D.A. & Bonus equivalent to one month pay based on salary of March every year.
He contributes 15% of his pay and D.A. towards his recognized provident fund and the company contributes the same
amount. DA forms part of pay for retirement benefits.

He is provided free housing facility which has been taken on rent by the companyat Rs. 10,000 per month. He
is also provided with following facilities:

(i) Facility of laptop costing ₹ 50,000.


(ii) Company reimbursed the medical treatment bill of his brother of ₹ 25,000, who is dependent on him.
(iii) The monthly salary of ₹ 1,000 of a house keeper is reimbursed by the company.
(iv) A gift voucher of ₹ 10,000 on the occasion of his marriage anniversary.
(v) Conveyance allowance of ₹ 1,000 per month is given by the company towards actual
reimbursement of conveyance spent on official duty.
(vi) He is provided personal accident policy for which premium of ₹ 5,000 is paidby the company.
(vii) He is getting telephone allowance @ ₹ 500 per month.

CA VIJAY SARDA | 8956784251/52/53 www.ekatvamacademy.com

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