Vijay, an Indian Citizen, was living in Delhi since 1972, he left for France on 1st August, 2017 and comes back on 2nd April, 2022. On the same day he joined BGH Industries Ltd., Delhi as a Chief Mechanic. He went to Chi

CS Executive · Tax Laws and Practice · PYQS · December 2023
Vijay, an Indian Citizen, was living in Delhi since 1972, he left for France on 1st August, 2017 and comes back on 2nd April, 2022. On the same day he joined BGH Industries Ltd., Delhi as a Chief Mechanic. He went to China for 15 days during the year in the month of July 2022. He furnishes following details for the previous year 2022-23 about his salary income: Basic Salary: ₹1,22,000 p.m. Dearness allowance (eligible for retirement benefits): ₹60,000 p.m. Fixed medical allowance: ₹5,000 p.m. House rent allowance: ₹25,000 p.m. Transport allowance: ₹2,000 p.m. Bonus: 2 months basic salary + DA Club membership fee reimbursed by employer: ₹14,000 p.a. Residence telephone bill paid by employer: ₹22,000 p.a. Contribution of employer to recognized provident fund: 15% of basic salary + DA Two children of Vijay study in the school run by the company. The cost of education in the similar school for the year would be ₹1,24,000 and the employee paid ₹50,000 to the school by way of fee. Compute income from salary of Vijay for the assessment year 2023-24, on the assumption that he has opted the scheme of section 115BAC.

Answer & Explanation:

Computation of Income from Salary of Mr. Vijay for AY 2023-24 Particulars Amount (₹) Basic Salary (₹1,22,000 x 12) 14,64,000 Dearness Allowance (₹60,000 x 12) 7,20,000 Fixed Medical Allowance (fully taxable) 60,000 House Rent Allowance covered u/s 10(13A) not eligible for exemption under the new scheme 3,00,000 Transport Allowance covered u/s 10(14) not eligible for exemption 24,000 Bonus (2 month basic salary + DA) (2 x (₹1,22,000 + ₹60,000)) 3,64,000 Club membership fee reimbursement (not exempt) [assumed for private purpose of employee] 14,000 Residence Telephone bill (mobile / telephone facility exempt perquisites) [Rule 3] Nil Concessional education (taxable as perquisites) (₹1,24,000 - ₹50,000) 74,000 Employer's contribution to PF beyond 12% (taxable) (15% - 12% = 3% of (₹14,64,000 + ₹7,20,000)) 65,520 Gross Salary 30,85,520 Less: Standard Deduction u/s 16(1) (Not applicable for AY 2023-24 under section 115BAC) Nil Taxable Income from Salary 30,85,520 Taxable Income from Salary [round off] 30,85,500

Topics: Income Tax

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