Rajiv Gupta, aged 45, is employed as a Finance Manager in XYZ Pvt. Ltd., in Mumbai. During the financial year 2025-26, he received the following emoluments: Particulars Amount (i) Basic Salary ₹80,000 p.m. (ii) Dearness

Computation of Taxable Salary of Mr. Rajiv Gupta for A.Y. 2026-27 (Under the Old Tax Regime - Not opting for Section 115BAC) Particulars Amount (₹) Basic Salary (₹80,000 x 12 months) 9,60,000 Dearness Allowance (DA) [40% of ₹9,60,000 (Forms part)] 3,84,000 Taxable House Rent Allowance (HRA) (Working Note 1) 74,400 Bonus (Fully Taxable) 1,00,000 Entertainment Allowance (₹5,000 x 12 months (Fully Taxable for private employees) 60,000 Employer's Contribution to RPF [Working Note 2] 40,320 Interest on RPF [Working Note 3] 12,000 Perquisite: Motor Car (>1,800 x 12) (Working Note 4)] 21,600 Gross Salary 16,52,320 Less: Deduction's u/s 16 (i) Standard Deduction [₹50,000 under old regime] (50,000) (ii) Entertainment Allowance [Not allowed for private sector employees] Nil Income from Salary / Taxable Salary 16,02,320 Working Notes Exemption of HRA u/s 10(13A) "Salary" for HRA = Basic + DA (if forming part) = ₹9,60,000 + ₹3,84,000 = ₹13,44,000. The least of the following is exempt: Actual HRA Received: ₹30,000 * 12 = ₹3,60,000 Rent Paid minus 10% of Salary: (₹35,000 * 12) - (10% of ₹13,44,000) = ₹4,20,000 - ₹1,34,400 = ₹2,85,600 50% of Salary (Mumbai): 50% of ₹13,44,000 = ₹6,72,000 Exempt HRA = ₹2,85,600. Taxable HRA = ₹3,60,000 - ₹2,85,600 = ₹74,400. Employer's Contribution to RPF Contribution in excess of 12% of Salary is taxable. Actual Contribution: 15% of (Basic + DA) = 15% of ₹13,44,000 = ₹2,01,600 Exempt Limit: 12% of (Basic + DA) = 12% of ₹13,44,000 = ₹1,61,280 Taxable Amount: ₹2,01,600 - ₹1,61,280 = ₹40,320 Interest Credited to RPF Interest in excess of 9.5% per annum is taxable. Interest Credited (11%): = ₹88,000 Exempt Interest (9.5%): (₹88,000 / 11 * 9.5%) = ₹76,000 Taxable Amount: ₹88,000 - ₹76,000 = ₹12,000 Motor Car Perquisite Value Since the car is owned by the employer, used for both (personal and official) purposes, and expenses of running and maintenance are met by the employer, the taxable value of perquisites for a car with engine capacity up to 1.6 litres is ₹1,800 per month.