3. INCOME UNDER THE HEAD “SALARIE: TO 17) Heads of Income (14). Sokiovars — S14 64 5-55. Me ae ay 04 - 56-6 Weg. BF 27 OS “56-5 ees Bone evr foi ei Section 14A: Expense for incomes not forming part af total income is mot ‘allowed is eduction, Points related to salary income: 1. Emgplayse and employer relationship is must. "Any salary, bonus, commission of remuneration received by an assessee be taxable under the head Salaries but under the head from a firm in which he is a partner shall not PGBP Salary surrendered to the Central Gavernment under the Surrender of salary: Voluntary Surrender of Salary Act is exempted from tax forall employers. 3, Place of Avcrual: Salary is deemed to accrue or arise at a place where rendered. The exception to this is that, in case of Indian citizen rendering se Indian Government outside India the salaryis deemed to accrue & thus taxable in India though perquisite and allowances received outside India are exempted u/s 1007). 4. Foregoing of Salary: It is treated as application and is taxable. ed in foreign currency: It fs converted into Indian rupee on the th 5, Salary due or reeei “Telegraphic ‘Transfer baiying rate on the specified date which is last day of the mor previous tothe month in which salary is due or is pale or is paid in advance. cil aA shat ct ee2 Busts of Charge: (18) The following income shall he charyewbte wy Incestne tax senior ete head “Salaries” (ay Any salary dy from an employer ara fetiner empla yer te A.B egee in the peviany year, wheiher paid in that previous yeae or net (b) Any salary paid or alluwed to him in the previous year hy or cm bch of an emphuyer ‘oF former employer though nut. die do tbal ote ious year fe) Any arrears of salary paid or allowed uy him in the previews year by on behalf of an employer or a former employer if net charged te Income tax in any previews year Basis of Accounting: (145) Ax per section 145, for income tax purposes only one af the following two methods of accounting can be followed by the avsessee (i) Mercantile; (ii) Cash System The provision of section 145 does net apply to salary head ie, salary is taxed on due or receipt basis whichever is earlier. If the salary is payable on monthly basis, it becomes due at the end of the month and is thus taxed on due basis. If the salary becomes due on the first day of the next month, then it becomes taxable when it becomes due. Arrears of Salary: Arrears will be taxed in the year in which these arrears are paid or allowed to the employee. Bonus: It js taxed on receipt basis, — -—— Anauity: it is a yearly grant and is treated @s salary. Annuity received from a present employer is to be taxed as salary. If received from a formes coployer then it is taxed a Refit in Laaloeadary, Question |: Compute the basic salary for the assessment year 2025-26 given that Mr 00 on Ream joined the service in the grade of 13.200 - 300 - 15,800 — 40 61.06.2017a Question 2: Ram joined a service on 1.8.2020 in the grade af — 12,000 ~ 300 -13,800 ~ 400 - 17,800 and his salary was fixed at 13,500 from the date of joining. Compute his basic salary for the assessment year 2025-26. Question 3: Ram is an employee of XYZ Lid. He is getting a salary of — 40.000 p.m, which is “due” on the last day of the month but is paid on the 7th of next month. Salary for which months will be txable for assessment year 2025-262 Question 4: What if in the above question the salary becomes due on the Ist of next month and is paid on the 7th of the next month. Salary for which months will be taxable for assessment year 2025-267 Section 17 (1): Inclusive definition of ‘Salary’ ‘Treatment of various incames to be included in gross salary: (1) Gratuity (2) Pension (3) Leave Salary (4) Retrenchment Compensation (5) VRS (1) Death-cum-Retirement Gratuity: Ii is a payment made by the employer to an employee in appreciation of the past services rendered by the employee. If received by the employee at the time of his retirement then it js taxed as, ‘Income under the head Salaries’. If received by the legal heir of the deceased employee then it is taxed as Income from other sources, Gratuity received during the period of service is filly nab Employees for the purpose of exemption of gratuity c wi Tar eS “1 Govt, Emplayees & Employees Covered Other Employees Employees of Local under the Payment ‘Authority Of Gratuity Act, 19724 A. Government Employees and Employees of Local Authority: Fully Exempted. Gratuity to Defense Service Members is fully exempt, LOULO31) B, Employees covered under the Payment of Gratuity Act 19722 The gratuity is payable to an employee on the termination of his employment after he has served continuously for $ years or more. The least of the following shall be exempted from tax. WOU Oni, (a) Gratuity actually received. (b) 15 days” salary for every completed year of service of part thercof im excess of six months. is) ~ 20,00.000 Gratuity received in excess of the above amount shall be included in the gross salary Note: 1 Salary for the above purpose: It is the last drawn salary of the employee. It includes Basic Salary and Deamess Allowance but does not include any bonus, commission overtime wages and any other allowances. Note: 2 Completed year of service: It is to be rounded off if it has more than 6 months otherwise ignore the menth part. 15-day salary Monthly Salary * 15 = Number of completed years of service i Question S Rohan retires on 4.1.2024 after serving MNS Ltd. for a period of 16 years land 11 months. At the time of retirement, his basies salary was — 44,000 p.m. and he was ‘also entitled to Deamess Allowance of — 8,000 p.m, On his retirement, he received 6,00,000 as gratuity, Compute the amount of gratuity exempt from tax and the amount to bbe included _gross salary. He is covered under the Payment of Gratuity Act, Question 6; Anupam retired trom his service en 17.11.2023 and received — 21,20.000 as gratuity, Anupam joined the service on 16.2005, At the time of retirement his basic salary was [40,000 pn. and deariess allowance 70,000 p.m. (60% of which was part of salary). ‘Compute the amount rotuity exempt from tax and the amount to be ingluded in gross salary. He is covered under the Payment of GratuityC. Employees not covered under the Payment af Gratuity Act, 1972: The least of the following shall be exempted from tax U/S 10 (10,(iii) (a) Gratuity Received, (b) Half month’s average salary for every completed year of service. (e) 20,00.000 Note 1: Salary for the above purpose includes Basic Salary + DA (if the term of ‘employment so provides) + Commission (if received as a fixed percentage of turnover achieved) Average salary is to be calculated on the basis of the average of the salary for 10 months immediately preecding the month in which such event occurs. Ignore the month in which the employee retires and calculate the salary for the preceding 10 months and find the average, / Lahy 10. months salary * completed year of service _ FZ 2x10 Note: 2 Completed year of Service: Ignore the month part. Note: 3 In the absence of any information, it is to be presumed that the employees are not covered under the Payment of Gratuity Act, 1972. Note: 4 If the employee has received gratuity in any earlier years and has claimed exemption then the limit of ~ 20,00,000 shall be reduced by the amount of ‘exemption(s) availed earlier. the individual ‘was employed with any other employer, provided he was not paid gratuity by the Note: 5 For calculating completed year of service, add the period for whi former employer. Note: 61f gratuity is received from more than one employer in the same previous year, by an employee, then the limit of — 20,00.000 would apply to the aggregate of received, grat Question 7: Mohan was employed with X Company Ltd. He retired on 21.10.2024 and received —3,60,000 as gratuity, He served the company for 26 years and 8 months. At the salary was 15,000 p.m. However, the average salary for 10 14,400 pum, He is not covered under the time of retirement months preceding the month of retirement is Payment of Gratuity Act,1972. 340000 (A) Compute the taxable gratuity.‘What amount of gratuity shall be taxable, If Mohan, earlier to his appointment with X Company Lid, had sworked for years with MN Lidl and was not entitled to gratuity from MN Lid.’ (By Question 8: Rahul retired from ABC Itd on 18.6.2024. At the time of such retirement, his basic salary was 70,000 p.m. He was also entitled to dearness allowance (@ 20% of his basic salary, 60% of the deamess allowance forms part of the salary for retirement benefits. He had worked with ABC Lid for 10 years 11 months and 15 days, He got an increment of 3.000 in his basic salary w.e.f’ 1.2.2024. At the time of his retirement, the company paid him a gratuity of — 20,00,000, Rahul was earlier employed with XYZ Company Ltd, from where he had received gratuity and had availed of an exemption af — 3,00,000. Compute the amount of exemption available out of the gratuity received from ABC Ltd. He is not covered under the Payment of Gratuity Act. Also compute his gross salary for the Jared assessment year 2025-26. {9509 Question 9: Ram joined XYZ Ltd an 1.1.2008 and retired from his job w.e.f. 1.9.24 He gets an increment in his basic salary amounting to = 2,500 every year on January 1. At the time of his retirement, he was getting basic salary of — 50,000 p.m, deamess allowance @10% of basic salary and a commission on turnover @ 1% of the total sale achieved by him, His turnover for the 12 months ending on 31.8.2024 was — 30,00,000, spread evenly over the year. He received a sum of = 8,00,000 as gratuity on the date of his retirement. Compute his gross salary for the assessment year 2025-26, (2) Pension: —_-Pension is apaymentmade by the employer after the retirement or death of the emplayee as @ reward For past services. It is normally paid ax a periodical payment on monthly basis but certain employer also allows the pension to be fully or partially commuted i.e. in liew of the pension lump sum payment is made to the employees. The treatment of these two kinds of pension is as under: is fully taxable in the hands all Uncommuted Pension: tis the periodical payment the employees, Commutation of Pension: Commutation means inter change. Many persons convert their Future right o receive pension into-a lump sim amount receivable immediately, There are wo types of employees far this purpose(1) Government Employee, Employees of Local aut corporation Members wf Defense § ity or statutory 2 Toul commuted pension is exempted, Judges of SC and HC, are texs-exempled fren tax, L/S 10 (1A) (i) (2) Other employees US 10 (OA) (ii) (ADT grata iy isalsoreceived: 1/1" ofthe pension, which he is normally entitled to receive, is exempt from tay. (B) Ut gratuity is mot received: 1/2 of the pension, which he is normally entitled to receive, is exempt from tax, Question 11; Ram retired on 15.4.2024 from MNS Ltd. He was entitled to a pension of 8.000 p.m. At the time of retirement, be got 75% of the pension commuted and received 2.40,000 as commuted pension, Compute the taxable portion of the commuted pension if- (i) Hes also entitled to gratuity. (ii) He is not entitled to gratuity. Question 12: Ram has served MNX Lid for 18 years and 9 months. He retired from service wef 111.2024, At the time of retirement, he was entitled to the following remuneration: (a) Salary 25,000 p.m. (6) Dearness Allowance @ 20% of Salary (60% of which forms part of salary for retirement benefits) On retirement, he received a sum of 6,00,000 as gratuity. He was emtitled to a pension of 12,500 p.m. wef. 111.2024, From 01.1.2025, be got 60% of his pension commuted and received a sum of | 7,50,000 as commuted pension. Compute his Gross Salary for the assessment year 2023-26. (3) Leave Salary: Encashment of leave during the tenure af service is fully taxable for all employees. Encashment of leave ctirement of the following types Employees for the purpose of exemption a (A)Government Employees: Fully exempted /S H0¢1 04.4 \(i) whether received in lump sum or superannuation(A) Other Employees: The leave encashment is exempted to the extent of the minimum of the following four. [US 1OIOAA) (i)] (Q) Leave Encashment actually received. (UN) 10 months’ ‘average salary” (Note-1) (HN) Cash Equivalent of Un-availed Leave (Note-2) (ivy Amount Specified by the Government: — 25,00,000. 10 months average salary must be calculated for 1@. months immediately preceding Pececisioe da, Salary means: Basic + DA (to the extent the term of employment so provide) + Commission on fixed percentage of tumover. Note: 2 Cash Equivalent of Un-availed leave 60 X Number of completed — Leave Ayailed X Average Salary years of service 30 Note: 3 Completed year af Service: Ignore the month part. Months are not taken into account for calculating the completed year of service. Note: 4 If Leave Encashment has been received earlier and exemption availed then the limit of ~ 25,00,000 is reduced by that amount. Note: 5 If Leave Encashment is received from more than one employer in a parti then the maximum amount not taxable shall remain — 25,00,000, Note: 6 Leave Encashment received an death shall not be taxable in the hands of the legal heirs. Note:7 300 days is the maximum number of days the leave is provided by the tax department. Question 13: Alok is employed with ABC Ltd, He retired from the company on 30.11.2024, At the time of his retirement, he received — 2,88,000 as eave salary from ABC ltd. Alok provides following information:\ bo 4 4 “0 Balary at the time of retirement (pam) is000 BE PeriodofService 0 years & 8 months fy [Leave encashment 8,000 eave availed while in service 4 months ance un availed leave at the time of retirement [16 months J6 [Average salary for the months of February, 2024 to [17,600 wember, 2024 [7 Leave entitlement — "5 month for every completed r St it of servi ‘Compute the amount of taxable leave encashment, ‘Question 14: Ram has worked with MN Lid for 24 years é 4 months. He retired w.c.f. | 1.2.2025, He submits the following information: Basic Salary (at the time of retirement) — 25,000 p.m. Deamess Allowance 100% of Basic Salary (40% of which forms part of salary for retirement benefits). — ‘Last increment 2,500 w.ef 1.7.2024 His pension was determined at 15,000 p.m. He got 50% of the pension commuted w-c.f. 1.3.2025 and received a sum af 3,00,000 as commuted pension. In addition to this. he received a gratuity of 6,00,000 and leave encashient amounting — 2,80,000 on account of accumulated leave of 240 days. He was entitled to-40 days leave for every year of service. ‘Compute his Gross Salary for assessment year 2025-26 assuming that he is not covered under Payment of Gratuity Act. (4) Retrenchment Compensation [10 (10B)] [Any compensation received by a workman under the Industrial Dispute Act. 1947 at the the extent of the least of the following time of the retrenchment is exempt from tax amounts {a) Actual amount of compensation, (b) Specified amount; 5.00.00 (e) An amount calculated in accordance with section 25F of the Industral Dispute Act. j10. This amount is equal to 15 days average pay for every completed year of service or part thereof in excess of 6 months. Salary: Hf monthly ~ Last three calendar months, [weekly — wages of last four weeks, If wages of last twelve days (3) Compensation received on Voluntary Retirement [10(10C) Rule 2B] oF the fallowing on voluntary The compensation received by the employees retirement under the golden handshake scheme is exempt L/S 10,(10C). The employees are of the following undertakings: Government, Public Sect Companies, Any other Company, Local Authority, Universities and IIT It applies to an employee. who has worked 10 years or attained 40 years of age. This point shall not be applicable for the employees of Public Sector Companies if the separation is under Voluntary Separation Scheme. Exemptions from VRS is available only for once Quantum of Exemption: ‘The least of the following is exempted fa) Actual compensation received. (bi ——_-3,00,000 (c)Lastdrawn salary X 3 X completed year of service (4) Lastdrawn salary X Remaining month of service Salary: Basie + DA (If forming part of salary for retirement benefit) + Commission on turnover. Question 15: Ram received voluntary retirement compensation of — 7,00,000 after 30 years 4 months of service he still has 6 years of service left at the time of voluntary retirement he was drat ip basic salary 20,000 per month deamess allowance which forms part of pay $000 per momh compute his taxable voluntary retirement compensation. Allowances: Allowunce is a fined monctary amount paid by the employee to the employee Hf Meeting sine particular expenses, personal or for the performance 0 Vhere are different types af allowances: (A) Bully 5 duties, able £3) Fully Exemy (C) Paniatty Exempted 4D) Special Allowances (A) Fully Taxable Atlowanees: They fo part of Gross Salary, [DOMILG ST WINE]ee UDAY (2) City compensatory allowance (CCA) 1) Mestival allowance: Fully taxable irrespective of whether any amount has heen spent on meitical treatment or not (4) Lunch / Tiffin Atlowance (8) Overtime Allowance (6) Servant Allo (7) Warden Allowance. (8 Interim Al wane (9) Now Practicing Allowance. (10) Transport Allowance (11) Entertainment Atlowance (12) Any other cash allowance (B) Fully Exempted in Certain Cases: They don't form part of gross salary, (2) Indian citizen, serving Indian government outside India, Allowance & perquisite exempted, (2) Allowance to High Court Judges. Sumptuary allowance given to HC/SC Judges (3) Allowance to employees of UNO received from UNO. (©) Partially Exempted: The amount not exempted forms part of Gross salary. House Rent Allowance: [10 (13 A)] It is given by the employer to the employee to with rent of the accommodation, which the employee meet the expense in connect might have to take. It is exempt to the extent of the minimum of the following, (a) Actual HRA received in respect of the period during which the employee ‘occupies the rented accommodation during previous year, the salary for the relevant period. (b) Excess of rent paid over 10% [Rent paid — 10% of salary tial house is situated at Delhi, Mumbai, Kolkama (e) 50% of salary ifthe resi & Chennai or 40% of salary if rented somewhere else Salary: Basic + DA (if forming part of salary fr retirement benefit) + commissions if on fixed percentage on turnover achieveda ommodation is taken and ly forthe period whee. accommodation is rent is being paid. Exemption is denies assesset lives in his own house, oF ima house jon is denied ifthe ig paid. Exempt does noe have to pay any’ rent or pays reat which dues not exceed 10% af his For which he does not have 10 salary, [fan individual opts to be taxed u/s 11SRAC, then no exemption from HRA is allowed. it i of 25 and deamess Question 16: Mr. Ram is employed with a basic salary of 28,000 p.m, allowance of $,000 pam,, 40% of which forms part of retirement benefits. He is also entitled to HRA of — 10,000 p.m. He actually pays 10,000 p.m. as rent for a house in Delhi, Compute the taxable HRA. ‘Question 16: Mr, Rahul is employed as the Finance Manager of ABC Ltd at Delhi, The partcalars of his salary for the previous year 2024-25 (Basie Satary 30,000 p.m. Gi) Deamess Allowance 10,000 p.m, (Forming pant of basic salary) Gi) Conveyance A tlowance for personal purpose 5.000 pum. (0) Commission @ 2% of the tumover aehieved which was 2,50,000 during the ‘previous year und the same was evenly spread. 5,000 (v) House Rent Allowance 15,000 p.m: ‘The actuel rent paid for his accommodation in Noida is 10,000 p.m till 31.12.2024, From 01.01.2025 the rent was increased to 20.000 p.m. Compute the taxable HRA ‘Question 17: Mr, ‘Shyam is ‘Working in Z Lid. on a basic salary of 60,000 Pm, deamess ‘lewance of 2% of basic salary. 70% of the dearess allowance is included in salary for Tetement benefits, The company gives him HRA of 30,000 pam, 2eus amounting 0 80.000. Shyam was staying with his Parents till 31.10.2024, From 11.2006, hetakes an accommodation on rent in Dethi and pays the Accommodation, ‘Compute his gross salary for the o (8) does Wot Opt 10 be taxed (by 25,000 p.m. as rent for sessment year 2025-25. if Shyam, under section | 13 BAC Omsto Be aked under section 115 BAC _>.(Dy Spectul Attowane These ure of te types: received and (ouet spent whichever ts ke exe rapt Out specified whichever is levi-—-exempted (1) Allowance Exempted to the extent of expenses [TBCHAU] 10¢14yiy Allowance — (minus) expense is taxable, If the expense incurred is more than the allowanee then the entire allowance is exempted. Im other words, allowance oF expense whichever is less is exempted Uy Travelling Allowance, [I is for cost of travel on tour] (2) Daily Allos Ke. GQ) Conveyance Allowance, (4) Helper Allowance: (3) Academic (6) Unitorm Allowance Not fan employee opts for IISBAC then only TDC is allowed, (2) Exempted to the extent of amount received or the limit specified whichever ts ess: 10(1.4)G) (1) Children education Allowances: - 100 p.m. per child up to a maxitnum of 2 children (2) Hostel Expenditure Allowances: 300 p.m. per child up to amaximum of 2 children. (G) ‘Transport Allowance: For transport between house and office blind orhandicapped then 3200 p.m. Transport allowance is for the purpose of if the employee is commuting between office and residence. lowance is allowed. Note: If an employee opts for LISBAC then only Transpor ‘Allowance where exemption is allowed up to certain percentage of amount 3) ‘allowance is provided to meet received: Employee engaged in transport business then if inure during his duty performed in the course of running of such transport personal exp jowance of 10,000 p.m. whichever is such a int of exemption shall be 70% the anthe following allowances from his enn Question 1: Mr: Mohan jy in 180 daring the previous year 2024-24: during the prevhons year foe a) Conveyance allowance tHe p.m. he opens 5.008 official purposes. atfice me {) Tranopotsllrwane 2.200 pun. dor comeing tom eestence to fice and back. He spends 1.400 p.m, during the 363 ¢e) Uniform allowance $,000 ps He spends 4,000 on the purchase and maintenance oF uniform. (4) Education and Hostel Expenditure allowance 450 per month per child for 3 children Personal assistant allowance 10,000 pan. He engaged tl official work and paid him salary of 15pm. for 9 months. Personal assistant spends 60F% of his time for official work of Mohan, Compute how much of the f ihe personal svsistunt for above allowances are twaable if R: (i) does not opt to be taxed under section | [SBAC (ii) opts to be taxed under section 11 518AC Deduction from Salaries: Seetion 16: From the gross salary, the following wo deductions are allowed ws 16 (1) Standard Deduction: |164ia)] Standard Deduction shall be the least of the following: (i) Gross Salary (ii) 50,00N 75,000(115 BAC) 2) Entertalameat Allowance [16(i)I: The deduction under this is allowed only 10 sly the entire the Government employees. sllowance is added to the gross salary and then deduction on secount of entrainment allowance is allowed to the least of th following. (The actunt amount received (10) 20% of Salary {Basic} in soo ‘Question 1% Rau, an employee ofthe Cena and is emiitled tor NYSFIMERL, wets, 30,000 as basic salary ‘Compute the deduction under eM allowance. 1,500 pam. os entertinmen a teen allowance. 0% 16 fom gros salary in respect oe, Mena 1 ben Con (hy11) Professional Tax {16(4ii9| (eamplesymeat Vax) Gover can charue professional tax on professional emphayed A dedhclien is the ex caf umcaiet paid as professional tax is allowed (1 empl ¢ fs paying. on behalf of the employec, then firsily it ts added wp in the gross salary nd then n deduction by allowed {YA PERSON OPTS TO BE TAXED UNDER SECTION 118 BAC THEN NO DEDUCTION US bagi), US 1o(iiiy Guesion 19: RK shes you the following information for the previous year 2024-25 asic sanary 15,000 p.m, Dearness allowance (60% of which is part of salary) 6,000 p.m. Entertainment allowance 11.300 pan House rent allowance 6,000 pum. Actual rent paid for a house in Delhi 7,000 pum. Education allowance for 3 children 200 pum. per child I ransport allowance for commuting from residence to utfice and back 2.400 pam, (Le spends 1.400 pum, for such purpose) Medical allowance (He spends §,000 for his medical treatment) 1,000 pam, Lune allowance (Hesxpends 2,000 for his lunch in the office) 200 p. Compute taxable salary of R for the assessment yeur 2025-26, if R: (a) does not opt to be taxed under section 115 BAC (h) opts to be taxed under section 115 BAC Provident Fund: A Provident fund is a welfare scheme for the benefit of the employees. The various types of Provident funds are as follows: (1) SPF, (2) RPF, (3) URPF, (4) PPF ry Provident Fund: For GovtJ/Semi Govt, employees, University/Tducational (1) Stat Institution, (2) Recognized Provident Fund: These ure approved by Provident Fund Commisstaner and Commissioner af Income Tax. (3) Unrecognized Provident Fund; May or may nl be approved by Provident Fund Commissioner but not appraved by Commissioner of Income Taxame. hich 0 i, whet (1) Pte ne pl Provident Fund Act Any member ania a 1 ‘contrite to ths ent 1 0 er yee ‘maximuin for claiming dedwetion nes fc the Foon ideo Funds he exertion foe the hover (a) Employee (my Ene! (cb laterest on Employee's cemtritution {d) Interest on Pimployer's contribution 18 for Ineume-Tax Purposes Fronimeni of Provident F (0) Eitployee’s contribution exempied in all, Deductions | jms 1/8 BOC is rot allomesd OC is abs available: ty URPE Ded (11) Interest aw emplayes s contribution exempted in SP other source when received in lump sum. In care of REY the & PPP, Inthe case of UKM taxable ws Income from he extent of 9 5% pa interew isexempled A111) Employer's eontaibutians bs fully exempted in SPY tm RIPE uy ‘exempted. tn URE lump sum amount when received is fully unable CAV) Interest on employer's contribution. (a} Exempt in SPF (tb) In RPE exempt upto 9:58 pa. (¢) In URPE taxable when rexeivedt iv hain ser Salary forthe above purpose: I includes Basic Salary * (04 (if the term of eamployment i provide) + Comiission (if received as fixed percentage of turnover achieved Al the time of retirenvent the accumulated payment received from (a) PPP & SPF is exempt ws 10(11) (by RPI exempt wis 10412) But we.f 1.04.2021 ifthe amount invested is greater than >. 50,060 the -_ x then interest on ‘mou greaier than 2.50.000 shall not be exempted Ifthe ads neck Hot contributing then 250.000 shall be replaced by $9, where employer is » 5.00.00, Question 20: Compute incom ute ICOM Under the head salary for 4 2025-26 from the following incemation, F Raju for the assessment yeat If Raju (a) does not opt to be taxed ed under section 1 5 ion LSBAC section 11 5BAC (b) © HD to be taiwed under(oy Basie Salary époam.§ bane (a) TA. included ak Salary fi retirement bemetits (7m) Aina (iii) Ow commbstion lowans recognised prowichent und (qu mH (is) Fimployer’s contribution towants recergrised proveibent ian (p.m 9 aKa (OP Imerest on RPP LIS (pa) 101) Mowse Rent Allowance 7,200 (p.m trent pair hose at Dethi (10) Medial Allowance (pm ) vii) Professional tay paid hy Ral 00 ‘Question 21: Compute income under the head salary of Mr. Shyam, He provide the owing information for the year ending 31.19.2025 ©) Salary 6.000 p.m (08) Emertainment Allowance 1300 p.m. He retired from service wie.F 11.2024 after 26 years of completed service and recerved 1 pension of 3000 p.m and gratuity of 91,000, fs) He reseived $1,500 from un recognised provident fund of which he was a member (this constitutes employee's contribution 20.000, employer's contribution ‘26.000, imierest on eciploy e's contribution 5,750, interest on employer's contribution aai He is not covered under the Payment of Gratuity Act. Further, assume that Mr, Shyam: 12) does nat opt to be taxed under section 11 SBAC tb) opts to he taxed under section 1ISBAC December 31. 2028 alter 25 years af service. Question 22: Me. A retired fram service « Hie receives a lump sum payment from the Uncrecognised Provident fund —6,00,000. Out J the amount received from the Un-recognised Provident fund the emp! wan 2.20.00) and the interest diere on 50,000, the employees contribution was the amount @ 60,000, What is the taxable portion 2.$0,000 and the inicrest there od Pr fund in the hands af Me. A for the assessment received from the un-recogn year 2025-26 Will your answer be any different if the fund mentioned above, way a recognised Pr fundweome for imited. He gives the details of 2025-26, 8000 23: Me Ram ie woking in XV ‘ sxsment yea gross salary for the assessment > ‘Question the previous year 2024-25. Compute his mice (50% for el FResic salary: 10.000 p.m, Dearess allowance (50% 8 F —- mover during the year in, Commission asa perce tia ‘ ‘oon, Cun contrion to RF 20.000. Employer com uti 1 PF account at the rate 13% per aren nent benctits) 50.00.08, over 0.1% tu ye of turnover wo ‘bonus 40,000, gratuity RPF 20% oFbasie salary’, Ierest acerued in the FI employer eaatibution | 13,060 spmcited Employee; An employee stall be «specified employes, if he falls under any of the folowing tee categories: (a) Heisa Dietorofa Company: or ¢. beneficial owner of (6) He fas w substantial intrest i the cosy equity shares caring not les than 20% of the voting power © income under the heud salaries (from one oe more employers) 1... Salary less deduction UWS 1 exeeeds 80,0000 Salary forthe nbove includes all inxalvle monctary payments; it alw includes taxable monetary penquisites. Question 24: Mahan is working in two companies AIC Ltd.and 7V Company Ltd, 7 paniculars of his income fot the previous yea 24 are as under nriculars ABC Tid fasie Salaey a0 ‘ication allowance for one child Feiwbarsement of elecichy bas ——— Medical allowance | Pinvlvers ‘contribution to recognised provident fond aluc of reat-thee atcommodation aken By the feitiployer on rent F Determine whether Mohan ism specitiod “employe ithe is neither a diese mara Substaatial sharcholdst of either ABC Lid. or 2V Ld Porguisites; Perdulsies ore the benelis in addition to non Salary to whieh the ent. ean be in cash or ia hi ‘OF In momey‘or money's Worth andt also in amenit provided by the enypheyers ts the cnpluyre whether five of vost oF al ae. aional rate. Perqnisite will be taxable only (Fas For Income tas purpose, perquisites imay be divided into three catepirion (AY Penquisites taxable in the hands of all ete ww Vasable oniy in the hands of specified growp (C) Tax thee perquisites, employees (AY Perquisites 0 able in the hunds of all the ermploy.ees: (AYE Rent free accommodation (finishes unfurnished provided hy the employer to ths employee, (2) Any concessions inthe matter of ent in respect of the _aegommodation (fumished/untumished) provided by the employer to the employee. (3 Any gum paid by the employer in discharging the monstary obligation ef the employee Which otherise would have been payable by the employer, aye Any sum payable by the employer whether dirsetly or Uhrough fund (oer than PF. Approved Superannuation fund or Deposit linked Insurance fund) tet an assurance on the life of the assessed or to effect a contract for annulty (s\:. Specified securities or sweat equity shares allotid or transfered by the employer to the assesses. ey Cootribution by the employer to the RPF, National Pension Scheme. Approved superannuation fund in respect oF assesse tothe extent itexceeds 7 50,000 (7), Annual accretion to the above fund (8); The value of any other fringe benefits or units as may be pressribe (142); Valuation of Rent fee accommodation or aecommodation provided at a concessional rate: ‘Accommodation can be of two types (a) Furnished, Ab) Unfinished ln any situntion find the value of unumished accommedstion and thea for furnished accommodation add 10% pa ofthe cost of furiture + ire charges fap Accommodation cas be rent. fice or at # concessional Fent If the employer reesives any rent froth the employee, then deduct that amount [rom the calculated value fesovernment: (a) Accommodation provided by the Gove! ro the license fee determined by the BOVErMment as rq, is equal to s () Unturnishe by the rent actually paid by the employee: as iFit is unfurnished and add 10% OF the soy te the value of i me « any amount pid or payable by the empl. (1D Burnished: Cal ‘of furniture and hire charges if any less for such furni (b) Accommodation provided by any other employer. (1) The accommodation is owned by the employer For P.Y 2024-2 ALY 2025-26 ~ Population ofthe city > 40 Lakh | 18 lakh < Population of the city < 40 lakh 10% of salary in respect of period during | which the said accommodation was | 7-5 % of Salary in respect of period seep byt eign during which the said accommodation | Was occupied by the employee Population of the city < 15 Lakh $%% of salary in respect of period during | which the said accommodation was | ‘occupied by the employee everis lower oF 10% of salary whic For furnished hous *Same tule. Add 10% pa or “PAOF the cost of {uriture + Hire Charges ifam lary = Basic + DA sommission + allowance (tay, 10" retirement tp RA ¥ emoluments from one ar mi st hi “hall not include Employe®NEW: A.¥ 2024-25 onwards Where the accommodation is awned by the employer and the same accommudat continued to be provided to the xame-employee for more than onc previous ‘The valuation of residential accommodation shall be the least of the following (a) Value computed as per rule for the current year (oy Enevious year value _*_Clfof the current year Cl of the first year in which the accommodation was initially provided. (c) The accommodation is provided by the employer (Government or other) in a hot The value of the accommedation shall be (i) 24% of salary paid or payable for the previous year, oF (ii) Actual eharges paid or payable to such hotel Whichever is lower, for the period during which such accommodation is provided. ‘The rule (c) is not applicable i.e. there will no perquisites value if the following © conditions are fulfilled a (ii) ‘The accommoda ion is net provided for period exceeding 13 days and on is provided in connection with the transfer af the employee {4} The accommodation provided by the employer shall be tax free perquisites if the accommodation is provided to an employce working at mining site or an onshore oil exploration site, a dam site of a power generation site. (e) Ion transfer, the employee is provided with accommodation at the new place of posting while retaining the accommodation at the other place, the value of perquisite shall determined with reference to only one such accommodation which has the lower value for a period nat exceeding %) days and thereafter the value of perquisite shall be charged for both such accommodation. Question 25: R furnishes following particulars of his remuneration for the previous year 2024-25 Basic salary 24,000 p.m. Dearness allowance 2,000 p.m, (40% of which forms part of salary for retirement benefits Lunch Allowance 400 p.m.seco RE RE rE Te Medical Allowance |,(10 pan. City Compensatory: Allowance 600 p.m. -Childeow Laueation Atlowanee (per child for 2¢hlidren) 5 He is provides! with a rent-free accommodation in Dethi, The cast ofthe furniture provided 2,004,000 and two air conditioners, which have been taken-on hire by the company, 360 pm. have also been provided in the aecommadation. The hire charges of each air conditioner is 4.000 pa ‘Compute the value of the rent-free accommodation if the accommod: w provided hy: (i) The Government and the walue of the ace ammodation as per Government niles is Reserve Bank of India and the accommodation has been taken on reat by RBI at 10,000 p.m. {XYZ Lid, and the accommodation has been taken on rett by the company at (0,000 p.m. 1,000 p.m. (ii) (it (>) What will be the valuation if the employee opts to be taxed under section |15BAC. ‘Question 26: Mr. Rohit is working in XYZ: Ltd as a manager. His salary details for the financial year 2024-25 is as follows Salary 20.000 p.m. Bonus 38,400, Conveyance Allowance (70% spent on official duties) 4,000 p.m. Medical Allowance 1,000 p.m. Employer's contribution to recognised provident ‘nd 20% of Salary. He has been provided witha rent-free accommodation in Noida whose Population in 20 lakhs, (2) Compute the value of the rent-free accommodation to be included in the salary income of Mr. Rohit for the assessment year 2025- 26, ift (@) the accommodation is owned by the company; (Gi) the accommodation has been taken on rent by the company at 14,000 p.m, (©) What wail be the valuation ifthe eraployee opts to be taxed under section 11SBAC ‘Question 27: Anupam submits following information regarding his salary income for the year 2024.25, Basic salary 15,000 p.m D-A. (orming part of salary) 40% oF basic salary, CCA 300 p.m.ide with 4 rent-thee unnturiished accomadation which is owned hy He is pro smnphover, The fair sertal vais use is 24,000 pa, Compute the prc having population assuming accommodation is provided im a c HO cons Jakhs as per 2001 census (Ay not exceeding 19 lakhs as per 4B) exceeding 10 Iakhs but not exceed (©) exwceding 25 lakhs (hy What will be the valuation ifthe employee opts to be taxed under seeti ‘Question 28: In the above question ifthe house is not owned by the employer but was 1ISBAC taken on rental 24,000 p.a. Compute the value of rent-free wevommodation, if he= fa) does not opt to be taved under section 1 1SBAC (i) opts to be taxed under section | 1SBAC Question 29: M submits the following information regarding his salary income which he gets from ABC Company Led Basic Salary 40,000 p.m. CCA 800 p.m. Children Education Allowance 400 p.m. (for 3 children), Reimbursement of Medical Exp. 25,000 He was entitled to HRA of — 16,000 p.m. from 1.4.2024 to 31.8.2024. He was paying 3 rent of — 17,000 p.m. for a house in Delhi. We. 1.9.2024 he was provided with an accomodation by the company for which the company was paying the rent of — 15,000 p.m, The company charged him — 3,000 p.m. as rent for the accommodation. Compute the gross salary of M for assessment year 2025-26. Assume M: (a) docs not opt to be taxed under section 115 BAC (by opts to be taxed under section 115 BAC (3) Valuation of monetary obligation of the employee discharged by the employer: Wherever any monetary obligation of the emplayec is discharged by the employer, which otherwise would have been payable by the employee, itis considered as a perquisite and is The value of these perquisites is the actual taxable in the hands of all employees: expenditure incurred by the employer in this regard. Exception: Expenses on telephone, including a mobile phone actually incurred on behalf of the employee by the employer shall be exempted24 (4) Valuagons of Life Insurance Premium / Deferred annuity premium payable ctual expenditure incurred whether paid or not shall PE taxable in + The bhi eeeler deduction U/S 80C on the hands of the employee, The employee shall be eligible te ofpreminm paid secom ies or sweat equity shares: The value of any specified (8) Value of specified seeurit the employer allotted or transferred directly or indirectly by security ar sweet equity shares P taxable perquisite in the free of cost of at a concessional rate 10 the assessee shall be & hands of the assessee, “The value shall be the fair market the date on which the option is exercised. value of the security or sweat equity shares on ‘Valuation method for the FMY as on the date of exercise of option: (AIF Shares are listed on Recognised stock exchange: FMV = Average of the opening & closing price of the shares on that date on the said stock exchange (By 1 Shares are listed on more than one Recognised stock exchan} FMV = Average of the opening & closing price of the shares on that date on the stock exchange which records the highest volume of trading in such shares (C)If no trading in shares on Recognised Stock ‘exchange: (8) The closing price of the shares on a date closest to the date of exercise of the option. I trading on multiple RSE, closing, price shall be of the RSE where the highest volume of trading in such shares took place ‘Closing Price: ce of ing Price: The price of the last settlement, If both Sale & Buy pei : Muy Prices are quoted then ‘Opening Price: The prix & w Price: The price ofthe first settlement. If both Sal - ale & Buy prices are quoted then the date of the exercising o ot ed ervising of the option days cartier than th tan the date of exercis ising000 shalt he a taxable perauistte In the hands of the (9) Conteibation above |) 7 employee ITM NH: The as ‘employer te the account of tne assessee in the following: ais of contribution made by the int oF aggregate Of an ta) RPE tb) National Pension Schenve (NPS) (6) Approved Superannuation fund the amount excords 7,580,000 per year (7) Annual accretion to the above fund: 742Kviiay: Annual accretion by: way of interest, dividend or any other amount of similar nature during the P.Y' to the balance atthe credit of RPF/INPS/ASAF to the extent it relates to the employer's contribution which is included in total income in any previous year under section 1T(2K9ii) Rule 38 for calculating Annual Aceretion TR=(PC)2* R+ ¢PCL + TRIP Where, ‘TP = Taxable perquisite w's 17(2)(viia) for the current P.Y PC = Amount * 7,50,000 contributed to RPF/NPSIASAF in the current P.Y taxable as perquisite w’s 17(2Mvii) PC] “Amount > 7,50,000 contributed to RPF/NPS/ASAF in the P-Y preceding the ‘current P.Y but on or after 1.04.2020 taxable as perquisite v's 17(2)¥i TP = Aggregate TP u/s 17(2)(viia} for years preceding the current P.Y ‘but on or after 1.04.2020 R= UFave 1 = Income accrued in aggregate into RPF/NPS/ASAF in the current P.Y Favg.= Opening and closing fund value of RPF/NPS/ASAF average. Question 30: Mr. Ram isappointed as a CFO of ABC limited in Mumbai from 1:9.2022, His basic salary is 600,000 per month, he is paid 8% as deamess allowance, He contributes 10% of his pay and DA towards his recognised Provident fund and the company contributes the same amount. The accumulated balance in recognised Provident find as on 14.2023, 313.2024 and 31.3.2025 is $0,35,000, 71,46,700 and 94,57.700 respectively. Compute the the hands of Mr, Ram under section 17(2)(vii) and perquisite value chargeable to tax 17(2X vii) for the assessment year 2024-25 and assessment year 2025-26.ee Ms tenet 7 walue ef any other fringe (8) Valuation of fringe benefits ar amenities: 1h ah amenity us may’ be prescribed shall he taxah sin care ef a rene. IF the ie sf all cetpheyens. HF th Lhe tnxnble perquisites fC hated tems he pseisl® mplayer receives any sur fom the employer the i shall — value. be made to emnpleryee oF nad Lanne: This foun e rest free or concess x ee . be The perquisite value shall be interest CSI charged per annum by SBI, as an the first day: ofthe relevant PY, the interest ‘ ‘onthe basis of maxim outstanding momthy balance as ecced Py the interes S Maximum outstanding monthly balance means the aggregate outstanding balance i a las feach month. “ eae petty and does not exceeds 20,000 it is exempted. Where the loan is for medical treatment in respect of disenses specified in rule 34 it 15 p07 taxable Members: (1) Spouse, (2) Children & Their spouses, (3) Parents, (4) Dependents ‘Servants, Question 31; MNS Lid. has advanced an interest-free loan of 5.000444) to Shri Sewn for purchase of car on! 5.2024. Som has been regularly repaying the Joan in instalments of 20,000 p.m. al the end of each month, ‘Compute the value of perquisite om account of interest assuming the interest charged bry SBI is 10%ep.a (Question 32: Take the above question and calculate the perquisite value if thu being regularly repaid on the Ist of next month instead of the end of the rm he loan is nth tb) Value of free meals, a ay and snacks Tenor snacks during office hour — nil Free meats r Hs and non-alcoholic beverages during working hours Provided in a remote area oF an offshore installation, ni (Mh Free meals und non-alcoholic beverages. d working oy arking hours provided in Pt 50 nil per meal, Any excess amuount ¢ sid nt above ‘S shatt tre | (IV) Any other case Aug amount creer at MOMCHEE OF token 1 hetow 5 shall be wrable perquisites, 1 (©) Value of 3 MW in agureyate th eived - in cash then full vate(a) Expensesan Credit Card.: AD) When wholly & exclusively for of 9 purposes ~ nil (IN) Otherwise — the amount paid, fe) Club membership & expenses incurred int a club - same as (d) {Use of moveable assets: By the employee or any member of his household W) Laptops and computer — Ni {1D Others — 10% of actual cost oF hire charges for the period of use. (2) Transfer of any moveable assets: 1, Computers & Electronic tems: {Actual Cost ~ $0% on WY) 2 Motor Cars: (Actual Cost - 20% on WDV) 3. Any other asset (Actual Cost ~ 10%0n SLM). Forall the above three, each completed year when it is put to use shall be taken (h) The valve of any other benefit or amenity, service, right or privilege provided by the employer shall be determined an the basis of cost to the employer under an arm's Jength transaction as reduced by the employee's contribution, if any. However, nothing contained in this item shall apply to the expenses on telephones including a mobile phone actually incurred on behalf of the employee by the employer, (B) _Perquisites taxable in the hands of specified employees: When the employer provides the perquisites inthe form of facility (other than the rent free accommodation of at a concessional rate or fFinge benefits or amenities as may be prescribed) to the employee, such facility will be perauisite only for specified employees If the perquisites are provided in money whether by way ef reimbursement of expenses incurred by the employce for such facilities of by way of payment on behalf of employee, these perquisites shall be taxeble in case of all employees. |. Valuations of motorear when. the owner ofthe car is employer: {ay Use: Wholly official: The emplayer meets expenses, No pergu tes in the hands of employee. (b) Use: Private expenses met by the employer (whatever is the wap ‘of the car)28 inal Cost + Sala Perquisite value = Running & Maintenance Expenses + 107 Pit of Original Co: ry ‘af Chauffer if any penses met by the Employer. [Full] fey Use: Private & Official. Perquisite value = (0) Ifengine capacity of the ear s 1.614 = 1800 p.m + 900 p.m [If Driver] (UD Hfengine capacity of the ear > 1.6 Lt = 2400 p.m + 900 p.m [If Driver] (a) Uses Private & Official. For the private use entire (Full) cost of running and maintenance paid wholly by employee. Perquisite value = 600 p.m +900 p.m [If Driver] 900 p.m +900 p.m [ If Driver] (I) Ifengine eapacity of the ear € 1.6 Lt (I If engine capacity ofthe car > 1.6 Lt more then one car is provided to the employee — treat as if one car is wholly for private use and the other is for partly private and partly official and find the perquisite value. Change the order and then find the perquisite value again. The condition that suits the assessee the most is to be opted. 2. Valuations of motorcar when the owner of the car is employee: These will be taxable for both specified and general employees as these amounts 10 reimbursement of expenses. fa) Use: Wholly Official. Expenses met by the employer, No Perquisites. (by Use: Partly private partly official, Expenses met by the Employer. Perquisite ry £ 1.6L = Actual Expenditure on running and maintenances + Driver salary [If any] — (1800/2700) (1) Mfcapacity > 1.6 Lt = Actual Expenditure on running and maintenances + Driver salary [IF any] ~ (2400/3300) w (<) the employee owns any other aylomotive conveyance and use it for official & Private purpose & expenses are met by the employer, then the perquisite value shall be: Actual Expenditure ~ 960 p.m , Question 33: Raj i ion 38: Raju is employed with a yearly salary of —2,50.000. Compute the Perquisite value ofthe car forthe assessment year 2023-24 in following situat on:{the running ard maintenanes expenses amounting to (i) The caris owned by Raju {601.000 during the previous year are met hy the employer, The "Car istmed ) fe persional bene it of Rajee (b) only forofficial duties (e) For personal benefit and for official use The employer owns the car costing $,00,000. 1.5 litre. engine eubic capacity he car is provided cxchisively for the personal benefit of Raju, The expenses incurred an the car are $2,000 iid) The employer provides a car (hetow 1.6 IL) along with a driver to Raju partly for official and partly for personal purpose. The expenses incurred by the company are: (a) running and maintenance expenses 32,000 (b> driver's salary 36,000 ix) Incase (ii) the employer maintains a Jog book and it is established than 40% of the total running of the ear is for persona use of Raju and 60% for official duties. 48) The employer provides a car (above 1.6 It.) ta Raju which is used for official work and is also used by Raju for commuting from his residence to office and back vip Raju is provided with 2 ears to be used for official and personal work and the {following information is available from the company's records: | Car Car, exceeding 1.6 It. below 1.6 Cos of the car a; 600,000 400,000 | Running and maintenance 0.800 8.000 Salary of driver Too 7000 (3) Value of services of a sweeper, & gardener, a watchman or personal attendant; The value shall be the actual cost to the employer. (4) Supply of gas, Electric energy or water: If produced by the employer itself then manufacturing cost per unit, In other case —actual cost paid / payable. (5) Free or concessional educational facilities {a) Ifthe school is of the employer then employee's children Nil up to 1000 p.m. per child, Ifthe cast of education is greater than 1000 p.m then full amount shall0 no renretion on the number of children, Employer visite Ce ie shall be the actual cost. household member's perquisite value ions due to employer — same as above. (b) In Other instit (c) In any other case — amount of expenditure. (6) Free or concessional joumey given to the transport employees and their family members: (a) Foremployce of an airline or the railways: Nil (b) In the case of any other employee: Value at which such benefit is offered by such employer to the public (C) Tax Free Perquisites: (1) Medical facility: Employee or house member reccives medical treatment in employer maintained hospital facility (2) (a) Loan Amount < 20,000 exempted. (b) Loan for medical treatment of specified diseases also exempted. (3) Perquisites provided outside India by the Government to an Indian citizen, (4) Tax paid by the employer on non-monetary perquisites of the employee shall be exempt in the hands of the employee, (5) Privilege pass to Railway and Air Line Staff are exempted. Treatment of Medical Facil (Ay In (1) Employers hospital: employeehouse member ireatment fully tax-free. (1) Any sum paid by the employer:ne (B) Outside India: Exempt (Expenses on medical treatment of the employees or his house member subject to RBI permissions, (ID) Expenses on stay abroad + one attendant subject to RBI Permission. (II) ‘Travel expenses of the patient + one attendant If Gross total income excluding travel perquisites $ 200,000 then exempt Family for the purpose of medical facility is = Spouse and children (Any type) Parents, brothers and sisters (Dependent wholly or mainly on the employee). Question 34; Compute the taxable value of the perquisite in respect of medical facilities availed of by Mr. Ram from his employer in the following situations: (a) the employer reimburse the following medical expenses: ) teatmentof Ram by his family physician 4,200 (Gi) reatmentof M~ Ram in a private nursing home 10,600 (ii) treatment of Ram's mother (dependent upon him) — 1,200 by a private doctor (iv) reatment of Ram's brother (not dependent upon him) 1400 (v) treatment of Ram's grandfather (dependent upon him) ~ 1,500 (b) ‘Theemployer pays an insurance premium of — 3,000 under a health insurance scheme (on the health of Ram. (c) The employer maintains a hospital for the employees where they and their family ‘members are provided free treatment. The expenses on treatment of Ram and his family members during the previous year 2022-23 were as under: [@iteaiment of Ram's major son (dependent upon him) «| 2,200 | 3200 ima | jvweatmentofMrs.Ram 8,000 '"7e) treatment of Ram 's widowed sister (dependent upon him) 7100 7500 ‘(i treatment of Ram's handicapped nephew (d) Expenses on cancer treatment of married daughter of RAM at Tata Memorial Hospital, Mumbai (an approved hospital for this purpose) paid by the cmployer 500,000 and reimbursement of expenses for medical treatment ‘of himself amounting to 20,000.R fol jde India were paid ing expenses on treatment of Ranr's major son outside I ty (c)The Following e the employer. , as [ Te ae permitted by © | RBI ‘Actual medical expenses Expenses on stay abroad of Ram's son and bruther \Wwho accompanied the patient ‘Travelling expenses of Ram's son and Ram's brother 65,000 45,000 | 7,20,000 Profits in Liew of Salary: These are received by the employers in lieu of oF in addition 40 salary ar wapes. These include the following 17(3) (1) Terminal Compensation: Any sum paid at ot in comnextion With the termination of the ‘employment or modification of the tern of the employment by the employer or exSS ———_————e 33 jon Fund means a Approved Superannuation Fund: Approved — Supcrann superannuation fund which hay been and continues 10 be approved by the Chicf Commissioner of Income-tax Tax treatment (1) Employees contribution emails deductions ws 80C. (2) Employers contribution is exempt up to 7.50.00) per year per employee. Any amount above this shall he taxable in the hands of the employee. hands of the employee. 10(13) (3) Any payment from the fund shall be exempt in rig; Fully taxable in the hands of employee. Salary In Lieu OF notic ‘Treatment of Leave travel Concession: [10(5)] ‘The employee shall receive exemption in respect of the value of travel concession ‘or assistance for himself and his family in connection with his proceeding. (a) On leave to any place in India. (>) To any place in India after retirement from service or afier the termination of his service, The exemption is allowed subject to: (1) Journey by Air: Shortest Distance economy fare of the National Carrier, (Jf) Other than air: maximum exemption air-conditioned first-class rail fare if the places are connected by Rail, Exemption: i. Any two journeys in a block of four calendar year starting from 86-89, fi, It is available for two children. iii, A journey can be carried forward to the first year of the next block. iv. Not more than 2 surviving children after 01, 10.98. ¥. For children born before 1.10.98 the restrictive rule not applicable and also multiple birth after 1° child Question 35: Mr. D went on a holiday on 25.12.2022 to Dethi with his wie and three children (one son - aye 5 years; twin daughters - age 3 years), They went by flight (economy class) and the total cost of tickets reimbursed by hisemployer was 60,000 ( 45,000 for adults and 15,000 for the three minor children), Compute the amount of LTC exempt,Question 36: In the above question, will there be a shildren the twins were 5 years and the son 3 years old? Discuss Monetary Limit Journey Performed By ae ’ Economy Fare Of National Carrier ' Rail Service Is Av . AC First Class fare -eo , Recognised Public Transport System Exist No Recognised Public: Tra Ist Class or Deluxe c lass Fare