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Lecture - 10: Computation of Income Under The Head Salaries

The document discusses the computation of income under the head salaries. It covers various components of salary that are taxable including wages, allowances, perquisites, and profits in lieu of salary. It provides details on the tax treatment of certain perquisites such as rent free accommodation and use of motor cars owned by the employer or employee. Certain perquisites are fully taxable, partially taxable, or exempted depending on the employee category and use for official or personal purposes.

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Harjot Singh
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55 views

Lecture - 10: Computation of Income Under The Head Salaries

The document discusses the computation of income under the head salaries. It covers various components of salary that are taxable including wages, allowances, perquisites, and profits in lieu of salary. It provides details on the tax treatment of certain perquisites such as rent free accommodation and use of motor cars owned by the employer or employee. Certain perquisites are fully taxable, partially taxable, or exempted depending on the employee category and use for official or personal purposes.

Uploaded by

Harjot Singh
Copyright
© © All Rights Reserved
Available Formats
Download as PPTX, PDF, TXT or read online on Scribd
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LECTURE - 10

Computation of income under the head salaries


Learning Outcomes

Recognize the features of


taxable salary income
Income Tax refunds: CBDT issues Rs 70,120
cr between April 1 and Sept 6
MCQ From last lecture…..!!!!
Poll Time
Q1) Mr. Harry, a judge in District court is receiving House
Rent Allowance of Rs 10,000 pm from the government of
India. Comment upon its taxability

A) Fully Taxable

B) Fully Exempted

C) Partially Taxable

D) None of these is correct


Q1) Mr. Harry, a judge in District court is receiving House
Rent Allowance of Rs 10,000 pm from the government of
India. Comment upon its taxability

A) Fully Taxable

B) Fully Exempted

C) Partially Taxable

D) None of these is correct


Let’s start with today’s topic
Salary

Profits in lieu
Wages Allowances Perquisites
of salary

Less

Standard Entertainment Tax on


deduction allowance Employment
(3) Perquisites

Per4quisites

Taxable for
Exempted for all Taxable for all
specified
employees employees
employees
Exempted for all Employees
Exempted for all Employees
Exempted for all Employees
Fully Taxable for all employees
Fully Taxable for all employees
Fully Taxable for all employees
Value of rent free accommodation a house owned by employer in case of non- Govt.
employees with above 25 lakhs population is...........................

A) 10% of employees salary

B) 15% of employees salary

C) 7.5% of employee salary

D) 20% of employees salary


Value of rent free accommodation a house owned by employer in case of non- Govt.
employees with above 25 lakhs population is...........................

A) 10% of employees salary

B) 15% of employees salary

C) 7.5% of employee salary

D) 20% of employees salary


Fully Taxable for all employees (Motor car)
Circumstances Car Owned By Employer Car Owned By Employee
Cubic Capacity <1.6 Liters CC >1.6 Liters CC <1.6 Liters >1.6 Liters
CC CC
Used completely for official Nil Nil Nil Nil
duties
Used completely for personal Actual amount of Actual amount of Actual Actual
purposes expenses + actual expenses + actual amount amount
salary of chauffer salary of chauffer
+ 10% normal + 10% normal
wear and tear wear and tear
Fully Taxable for all employees (Motor car)
Circumstances Car Owned By Employer Car Owned By Employee
Cubic Capacity <1.6 Liters >1.6 Liters <1.6 Liters CC >1.6 Liters CC
CC CC
Used partly for personal and 1800 pm + 900 2400 pm + Actual expense – Actual expense –
official purposes (running pm (if chauffer 900 pm (if (1800 pm + 900 (2400 pm + 900
expenses met by employer) is provided) chauffer is pm (if chauffer is pm (if chauffer is
provided) provided)) provided))
Used partly for personal and 600 pm + 900 900 pm + Nil Nil
official purposes (running pm (if chauffer 900 pm (if
expenses are met by employee is provided) chauffer is
himself) provided)
1) Official Purposes:
2) Personal Purposes
3) Partly Official and Partly Personal
1) Official Purposes:
2) Personal Purposes
3) Partly Official and Partly Personal
1) Official Purposes:
2) Personal Purposes
3) Partly Official and Partly Personal

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