Mr. Harl is employed at Amritsar on a salary off 30,000 p.m. The employer is paying H.R.A.

of~ 8,000 p.m. but the actual rent paid by him (employee) is f 12,000 p.m. He is also getting 2%
Commission on turnover achieved by him and turnover is f 50,00,000.
Calculate his Gross Salary.
Q.No.7
Compute Gross Salary from information given below for each situation separately :
(1) Salary @ , 30,000 p.m.
(ii) D.A. @ , 6,000 p.m.
(iii) C.C.A. @ f 1,000 p.m.
(M House Rent Allowance@, 8,000 p.m.
(v) Commission on turnover achieved by him is, 40,000.
Situation (a) living in own house _
(b) Living in rented house at Delhi and D.A. enters into pay for retirement benef_its and rent paid
is f 7,000 p.m. -
(c) Living in rented house at Chandigarh and D.A. does not enter into pay for retirement benefits and rent
paid ls f 10,000 p.m. · - -
Q.No.8
at DelhJ submits the following information about his salary
·'
Mr. Jaideep wt:to is workiog, with+~\,cornpaoy
income for the previous: year :202J-2i>:_,- - -- - -
f
Salary , .,> .. . 28,000 p.m.
Dearness allowanc;e ;:c;:d>':,;z· · 10,000 p.m.
Bonus . < > .· < < > . ·• .. . 28,000
His employer paid him f JO,OOOp:!1),t ~~-~¥,ou~~-:rtlMf'€11.lowanpErUpto30-'11;.2021 and it was raised to f 12,000
p.m. from 1-12:-20,2,1. He Jived 'A'ittf'hi~'. pat~{'lfs'."i11:' a: ·hou~,own~d by his father and no rent was paid by him.
From 1-12~2021 he shifted to -a rentedt hbusefa'hd.>pc,tid f :15,000 p.m. as rent.
Compute his Gross Salary for the ass~ssrnent:year 2022-23 Jf his salary is due_on last date of month.
ILLUSTRATION 15
Mr. Ramesh Swain is employed at Hyderabad at a Basic Salary oft 25,000 p.m. and he is also
getting following allowances :
t
1. Dearness Allowance 2,000 p.m.
2. Lunch Allowance 1,000 p.m.
3. Servant Allowance (He is paying t 1,200 p.m. to a servant) 1,000 p.m.
4. Transport Allowance 2,000 p.tµ.
5. Educati_o n Allowance @ 200 p.m. per chil4 for three children.
6. Hostel Allowance to one child 500 p.m.
7. Conveyance Allowance (He does not spend anything) 800 p.m.
.
8. Overtime Allowance 2,000 p.m.
9. Officiating Allowance 2,000 p.m.
10. Cash Allowance 1,200 p.m.
11. Entertainment Allowance 2,000 p.m.
12. Medical Allowance 800 p.m.
13. City Compensatory Allowance 600 p.m.
14. House Rent Allowance 5,000 p.m.
. ~ e is having a family house at the place of his posting but he is living in a rented house and
1s paying a rent of f 7,000 p.m. Find out his Gross salary :
(A ) If he does not opts to be taxed u/s 115BAC i.e. under new slab rates;
(B) If he opts to be taxed u/s 115BAC.
ILLUSTRATION 5
Calculate the taxable amount of annual accretion to R.P.F. if following information is provided
by assessee :
(i)Pay @ ? 40,000 p.m.
(ii)Commission received by him on the basis of turnover achieved by him : , 1,36,000;
(iii)Employer's contribution to R.P.F. @ 13% of salary;
(iv) Interest credited during the year to R.P.F. :'3alance @ 12% is , 64,000.
ILLUSTRATION 20 ---
.Mr. Arup Sen has furnished following particulars :
(i) Salary @ f 25,000 p.m.
(ii) Dearness Allowance @ f 5,000 p.m. (It enters into pay for retirement benefits).
(iii) Entertainment Allowance @ f . 600 p.m.
(iv) Bonus f 16,000
(v) Cost of furnishing · f 1,20,000.
Calculate the value of rent-free house if :
Case I. Mr. Arup Sen is Govt. employee and rent of house fixed by Govt. is f 2,500 p.m.
Case II. Mr. Arup Sen is working in a semi-Govt. · undertaking at Chennai [Population more
than 25 lakhs] and Fair Rental Value of the house is f 8,000 p.m .
Case III. Mr. Arup Sen is working in private sector at Chandigarh [population below 10 Iakhs]
and rent of the house hired by employer is f 6,000 p.m. He is also provided with
hired refrigerator whose hire charges off 600 p.m. are paid by employer.
Case IV. Mr. Arup Sen is working in pri ~ate sector at Delhi [Population above 25 lakhs] and
actual rent of the house not owned by employer is f 6,000 p.m. Rent charged by
employer is only f 3,000 p,m.
ILLUSTRATION 24
Mr. Jai, a manager with a company was transferred to Bangalore where he stayed in a hotel free
of rent. His salary particulars are : f
Salary (p.m.) 25,000
D.A. (p.m.) 5,000
Conveyance allowance (p.m.) 1,000
Actual expenditure incurred for employment · (p.m.) 600
City Compensatory allowance (p.m.) 1,000
Calculate the value of rent free accommodation if he stayed in a hotel for
(a) 14 days and actual bill is f 6,600
(b) 38 days and actual bill is f 30,950
a.No. 10
Mr. R is working with Reliance Industries Ltd. at Ahmadabad [Population above 25' lakhsJ-. The particulars
of his salary income are as under - : - ,
Salary · 30,000 p.m.
D.A. [Treated as part of salary for calculation of Provident Fund] 5,000. p.m.
Bonus [Out of which f 15,000 is gratuitous] 25,000
Commission 2,00,000
Employee's and Employer's contribution to' ARF '[Each] -a,ooo p.m.
The employer has provided a rent free · hous~. -Ca.I.cul ate the value of the
perquisite of rent free house if :
(a) House is owned by employer and its FRV i{ i 4$~0.00 p.a.
(b) House is hired by employer at f 4,00C[ p.i_Q1i
Q.No. 11
Compute the value of benefit of house for each situation separately from particulars given below :
(a) Salary f 25,000 p.m. [Due on last d~y ofthe month],
(b) Dearness allowance 100% of sarary •15.0o/.o enters].
(c) Bonus f 20,000 which includes gratuitous bonus off 10,000
(o) Conveyance allowance@ f 1;000 p,m.
(e) Entertainment allowance @ f '500 p.m.
 (f) Arrears of salary for the previous year 2020-21 : t 6,000 .
(g) Cost of furnishing is f 2,00,000 and a hired air-conditioner is providedfor6 months every year and rent paid
in respect of such air conditioner is f 1,000 p.m. .· , · .
Situation (1) Employee is a Govt. employee· and rental value of the house is f 2,500 p.m.
Situation ( ii) Employee is working with Pb. Govt. at Chandjgarh [population below 1O lakhs].
House is owned by the Govt. and its rentaJ value fixed by state,, govt. is , 2,000 p.m.
The house was provided with •effect from _1-5-2021.
Situation (iii) Employee is working in a Public·ticl~company .at Delhi · [Population above 25 lakhs] and rent
paid by company is f 8,000 p.m. :Employee pays ,, 3000 p:rn. as rent.
ILLUSTRATION 16
_. From the following information, explain the treatment of the following medical benefits received
by Mr. X, an employee having monthly salary of f 60,000.
(1) Received f 500 p.m. as medical allowance.
(2) During the year Mr. X met with an accident and his employer made the following payments :
(a) Directly paid to a private specialist doctor's hospital ? 20,000.
(b) Reimbursed medical expenditure incurred by employee in an approved hospital
? 50,000 for a non-notified disease.
(3) Employee was referred to a specialist doctor in London and employer met the following
expenses in this connection.
(i) Expenses on travelling of the employee and one attendant ? 60,000.
(ii) Operation fees of the specialist doctor ? 50,000.
(iii) Expenses on medicines and hospitalization ? 80,000.
Reserve Bank of India permitted an expenditure of ·1,00,000.
(4) During the year employer also reimbursed the following expenses incurred on the medical
treatment of members of employee's family.
(a) On the medical treatment of employee's grandfather, who is dependent on him
f 6,000.
(b) On the medical treatment of wife of the employee~ 5,000.
(c) On the medical treatment of empioyee's brother who is dependent on him, 3,000.
Treatment in all the three cases was got from an approved hospital.
(5) During the year employer got the medical insurance of all the important employees and paid
a premium of, 5,000 on each employee's policy. _
ILLUSTRATION 48
_. From the particulars given below compute the salary income of Mrs. Swati for the year ending
on 31-3-2022 :
f
1. Net salary received after deduction of the following 1,50,000
Income tax deducted at source 6,000
Own contribution to RPF 20,000
Rent of residential house provided 4,000
2. Profit Bonus 24,000
3. Entertainment Allowance 12,000 p.a.
4. She went on tour for official purposes and received travelling allowance 6,000
5. She was ill and was treated in a private hospital. Medical bills reimbursed 12,000
6. She was provided with rent free house owned by the company at
Patna [Population 20 lakhs] company also provided a gardener to
maintain this house. Salary of gardener paid by the company 500 p.m.
7. The electricity and water bill of the above house paid by the company 1,200 p.m.
8. She was provided with a car of 1.2 It. CC which was used partly for
personal and partly for employment purposes.
9. The company contributed f 24,000 towards RPF.
I0. She has taken interest free loan of 12,000 against salary during the year repayable in 6
equal monthly instalments starting from August, 2021.
ILLUSTRATION 49
Mr. A an employee of Ranchi [Population 15 lakhs] based company provides the following
particulars of his salary income :
f
(i) Basic Salary 12,000 p.m.
(ii) Profit Bonus 12,000
(iii) Commission on turnover achieved by Mr. A 42,000
(iv) Entertainment allowance 2,000 p.m.
(v) Club facility 6,000
(vi) Transport allowance 1,800 p.m.
(vii) Free use of car of more than 1.6 lt. capac;ity for both personal and
employment purposes ; expenses are met by employer.
(viii) Rent free house provided by employer. Lease rent paid by employer 6,000 p.m.
(ix) Free education facility for three children of the employee :
[Bills issued in the name of employer] 22,500
(x) Gas, water and electricity bills issued in the name of employee but
paid by employer 16,800
Compute income under the head salary for the assessment year 2022-23.
ILLUSTRATION 54
From the particular given below, compute salary income of Mr. Imran.
Salary @ 40,000 p.m. 4,80,000
Bonus equal to one month's salary 40,000
Entertainment allowance @ 5,000 p.m. 60,000
Free gas and water supply 5,000
He is provided with a rent free accommodation in Delhi owned by the employer the F.R.V. of
which is 10,000 p.m. (Population of Delhi is above 25 lakhs).
He is provided with the facility of a 18 cubic capacity car which he uses both for private and
official purposes.
He has engaged a domestic servant @ 1000 p.m. and his salary is being paid by his employer.
He is provided the facility of a free lunch in the office during lunch break valued at I 00 per
day for 250 days in the previous year.
The employer is maintaining a holiday home at Shimla and employee stayed there for IO days
free of cost. Its cost to the employer shall be f 10,000. .
ILLUSTRATION 58
From the particulars given below calculate salary income of Mr. Jadav for the assessment year
2022-23 :
(i) Basic pay : f 15,000 p.m. [Due on last day of month]
(ii) D.A. 60% of salary [50% of D.A. forms part of salary from 1.1.2022]
(iii) Bonus Basic salary for one month;
(iv) Commission f 66,000
(v) Leave encashment f 20,000. It relates to encashment of current year's leave
(vi) He bas engaged an helper at f 1,200 p.m. and his employer pays him f 1,500 p.m. on this
account
(vii) Medical Bills for f 50,000 were reimbursed in following manner:
(a) from a notified hospital in respect of a notified disease 12,000
(b) from a private nursing home 38,000
(viii) Personal Mobile telephone bill of employee paid by employer 15,000
(ix) He has employed a cook for his perrnnal use at f 1,000 p.m. and his employer has
reimbursed such salary.
(x) On 1-12-2021 he has taken a loan off 6,00,000 from his employer to purchase a car. Rate
of interest is 7.25% p.a. Repayment of loan @ f 5,000 p.m. is to start after 4 months from
the date of taking of loan. Prescribed rate of interest by SBI as on 1-4-2021 is assumed to
be 9.25%.
(xi) He and his employer contribute f 3,000 p.m. each towards RPF.
(xii) Interest credited on the accumulated balance of RPF @ 10% is f 20,000.
(xiii) He received f 20,000 as leave travel concession but has not travelled anywhere.
(xiv) He has been provided with free use of a car of 1.8 It. C.C. Car is used for employment
purposes only.
(xv) He has been provided with a rent free house hired by employer at f 20,000 p.m.
Mr. Jadav is posted at Nagpur, population of which is 18 lakhs. On 10th March, he was
transferred to Bhopal while his family stays at Nagpur. He joined his duty on 12 March at Bhopal and
stayed in a hotel for 10 days and hotel tariff off 1,500 per day was paid by employer.
ILLUSTRA'TION 60
Mr. Sarangi, an employee of a public limited company at Cuttack, received the following
emoluments for the previous year 2021-22.

(z) Basic salary @ f 30,000 p.m. 3,60,00()

(ii) D.A. as per terms of employment f 3,000 p.m. 36,00o
(iii) Bonus equal to 1 month's salary 33,00o
(iv) Commission 60,000
(v) Advance salary 66,000
(vz) Employee's contribution in recognised Provident Fund 48,000
(vii) Employer's contribution in Recognised Provident Fund 48,000
(viiz) Special allowance @ f 2000 p.m. 24,000
(ix) House rent allowance received @ f 10,000 p.m. 1,20,000
(x) Rent paid by him @ f 12,000 p.m. 1,44,000
(xi) Entertainment allowance f 3,000 p.m. 36,000
(He spends the whole amount while performing his official duties)
(xii) During the year employer has provided him a Honda city car of 1600 cc capacity with
chauffeur which he uses for his personal purposes. Employer's expenditure of the running
and maintenance of the car including salary of the driver is 1,20,000 during the year. Cost
of the car is 7 ,50,000.
(xiii) Interest credited to his recognised provident fund @ 12% is f 30,000.
(xiv) Employer company has provided him free club facility which costed the company f 24,000
and free lunch for 300 days cost being f 150 per day.
(xv) During the previous year he has been provided a interest free loan off 18,000 to purchase
a rooter cycle. In November 2021 his father fell ill (disease specified under Rule 3A) and
he again got interest free loan of f 50,000 from his employer for the medical treatment of
his father.
Find out his Salary Income for the Assessment Year 2022-23.
Q. No. 32
Shri Sukhwasi is Secretary to Hamesha Nuk5-an Ltd., at Pune [Population 20 lakhs] and for the
period between 1-4-2021 and 31-3-2022 has received ,t~!,,following salary and other payments from his
company. ,.,
f
(q Salary @ 48,000 p.m.

~::=::iw::~nce . ,;.~{/~:t/:i'> .. : 12,: P~:

(it) Dearness allowance , @ 10,000 p.m.

(v) ,Commission on sales achieved by h!m: ,::\~:;,2;l';, : :':,:\-, -' ' · 24,000
(VI) RenHree accommodation of a buildjogjf~r~isb~:d))n'~f)ich' employer pays municipal
tax Qn' ? _60,000 per annuni and 'f6mitur~-1~iu~tii ~,,1:~20~000. ,
(vit) Medical
-:' '
bills
.,, '
reimbursed
.
by company'
(Jre~trilen~ tijk~n,frotp private ,'hospital) ;. f 12,000
. . .·",' ·<: .' ,., ;-, ·. :' . '·'<-,_~,
!/ '

(viii'J He i~ provided with a car of 1.81!, capa~i1Y-~hi~hJs,partlyl1sed:for personal and,partly 'for employment
purposes. During the year corppany in'6qrr,~_,f 44,000 on maintenance of car. Normal depreciation of
J u
car :is 30,QOO,,and driver's salary is:? t?J>90 p~a''. was agreed by the Assessing Officer that 40% of
the ,time ear ;s used for personal purposes.- - ; ,
(ix) ~1,~r :1b(rrl's ~(,a9,~eement hispiofessional tax oft 2,000 was paia by the employer. _
, (x) Ourir19 'th~ :y~afhe, travelled in connection With his job and was paid t 16,000 as travelling allowance
, ,and -~ 12,-qoo ;as ~ally allowance.
(xfJ He a~ ,hifo'''.empl?yer ~ohtnbuted , 90,000 P:a. (each) to RPF. - ._ "_ _
(xii) During the ;Ye~r;he,paid t 6,450 as life, insurance premium to insure the life of his major' son.
~mpute his mgo,m,e, ~.mder the head salaries and qualifying amount for ,deduction_ u/s 800.
a. No. 34 . . .
Mr Ghosh is the Chamnan of lnd~an Tobacco co., Ltd., Kolkata [Population above 25 lakhs]. His salary and
other particulars for the year ending 31-3-2022 are as follows :

salary . 60,000 p.m.

O.A. (not considered for retirement benefits.) 10,000 p.m.
Bonus for the year 72,000
Arrears of earlier year's bonus . _ 10,000
commission on profits for 2021-22. 80,000
Advance salary for April 2022 drawn in March 2022 60,000
Employer's contribution to recognised provident fund 14% of salary
Profession tax paid by the company · 2,000 P.A.
Income tax paid by the company 15,000 p.m.
Electricity bills· for the year paid by the ·comJ)any _ 8,000
Fees for attending board meetings of other compani~s. _ _ 13,000
The company has provided Mr. Ghosh a_. big _car (1 ~8-It: e,apacity) ·which is used by him both for official and
personal purposes. The entire running and mainten~nce cost amounting· to ? 45,000 for the year has been
met by the company. His ·two children are studying. in Doon School Dehradun the education expenses during
the year being~ 40,000 fully met by the company. / ·· -
He has also been given a spacious bu.ngalow free 6frent. The company owns the bungalow. The fair rental
value of the bungalow is f 18,000 p.m .. _· ·
There is a swimming pool inside the bungalow compound the maintenance cost of which comes to t 20,000
for this year. The company met it. _ ·
The garden inside tbe compm.ii1d wall is maintained by the company. ·r he gardener is paid a salary of
f 1,000 p.a. The maintenance cost came to _~ 6,000 during the year.
The chairman has also been provided with a security·and a sweeper whose salaries ammounting respectively
to' 1,600 p.m. and? 1,600 p.m. have been paid by the company.
The entire bungalow is richly furnished with furniture costing f 4,50,000
~~termine salary income and also the perquisite value of the rent-free bungalow in th~ h~nd~ o! Mr. Ghosh.
Q . No. 35
From the particulars given,. below compute his salary income :
(1) Basic Salary , 25,000 p.m.
(ii) Dearness Allowance, 5,000 .P-~- (f a.ooo p.m. enters into pay for s.e rvice benefits).
 (ii~ Bonus t 20,000.
(iVJ Salary in lieu of past accumuJated le.ave.f 15;000~
(VJ Entertainment allowance t 1,5()0 p~ni . . ., . . . •., ·. •· ~.· ·.. .. •
( v~ Reimbursement of Conveyance expencJ.iture .inci.Jrre~-in performance of duties f 1,500 p.rn. ·
( vii) Furnished House at Concessional renf of>f >:3,000 p;m. in Chennai fPopulation above 25 lakhs] Fair
Rental Value t 6,500 p.m~ · Cq$t of furnlture·f '. 3,50,000. Salary of gardener t 1.000 p.a.
( viii) Club bill paid by employer t ·7,200 p.aS I . · . .
( iX) Contribution by employee and employ~r,'1~ f={.p;,=~.:::.13% (each)' of sEJ,tary.
(XJ Reimbursement of Medical Exper\~ 10.Jr~Sp~9tpftreafmeht bf a"notified disease t 20,000 (Hospital is
an approved one}. . · · < <- . . ··· :·;.·•.• > ..·.···•·
.s. ..,· ·
(x1) Life Insurance Premium (Paid b1: ,ehiplby~),
own life = 20~0@,p.a> · · · •· · ·
wife's life = 15,000 p)a/
major son = 12,_0 00 p.a.
(xii) ELSS deposit f 20,000.
(xiii) Contribution to Public P.F. t 24,000 p.a.
ILLUSTRATION 34
Mr. Babu retired on 30- 11-2021 from a coal mine after putting a service of 28 years and IO
m onths. At the time of his retirement he was getting a salary of t 16,000 p.m. and he use to get an
increment of t 500 p.m. on 1st April every year. His D.A. was t 2,000 p.m. Gratuity received
t 3,40,000. Find out his taxable gratuity, if he is covered under Gratuity Act, 1972.
ILLUSTRATI ON 35
Mr. Damodar retired on 15-6-2021 from a manufacturing company after putting service of 30
years and 7 months. He received a Gratuity of t 3,60,000. Basic salary of Mr. Damodar was
20,000 p.m_ during 2020 and~ 22,000 p.m. during 2021. He was also getting D.A. @ 5,000 p.m.
which was increased from ~ 4,000 on 1-4-2021. 50% of D.A. is presumed to enter into salary for
computation of all retirement benefits but 100% of D .A. is part of basic salary for calculation of .
pension benefits. Compute his taxable gratuity, if he is not covered under Payment of Gratuity Act,
1972.
ILLUSTRATION 36 •
Mr. Vivek retired on 21st October, 2021 [on completion of 60 years of age] after putting 32
years, 7 months and 21 days service. He is a MBA and was promoted to the post of a Marketing
Manager on 1st March 2021. Other particulars of his salary and allowances etc. are as follows.
1. Basic salary f 40,000 p.m. His salary was f 30,000 p.m. upto his promotions as a Marketing
Manager.
2. Dearness Allowance @ 20% of his salary and 50% of it enters into salary for computation
of retirement benefits.
3. Fixed commission f 2000 p.m.
4. He is also entitled to get a commission on the turnover achieved by him and total amount
of commission received during the last 10 months (prior to the month of retirement) is
f 1,02,000.
5. Bonus f 20,000
6. His salary falls due on 1st day of each month.
7. He received f 4,50,000 as gratuity.
Find out Mr. Vivek's taxable amount of gratuity.