Ramesh working in ABC Pvt. Ltd draws the following amount by way of salary for the previous year ended 31st March, 2024: (i) Basic salary ₹ 1,25,000 per month. (ii) Commission on sales @ 2% on sale made by him, Commissio

Computation of Income from Salary of Mr. Ramesh for the Assessment Year 2024-25 Particulars Amount (₹) Amount (₹) Basic salary (₹ 1,25,000 x 12) 15,00,000 Commission on sales 40,000 Employer's contribution to recognized provident fund 3,00,000 Less: Exempt @ 12% of Salary and commission (₹ 15,40,000 x 12%) (Note 1) (1,84,800) 1,15,200 Employer's contribution to National Pension Fund 1,00,000 Employer's contribution to Superannuation Fund As per sec 17(2)(vii) of the Income tax Act, 1961, Employer contribution to Recognised Provident Fund + Approved Superannuation fund + Notified Pension scheme in excess of ₹ 7.5 lakhs per annum is deemed as perquisite. Since total of all three does not exceed ₹ 7.5 lakh, no perquisites is deemed u/s 17(2)(vii) of the Act. Nil Interest free Loan Facility (₹ 15,00,000 x 9.5% x 10/12) 1,18,750 Less: Interest recovered from employee (₹ 15,00,000 x 6% x 10/12) (75,000) 43,750 Gross salary 17,98,950 Less: Standard deduction u/s 16 (ia) (50,000) Income chargeable under the head 'Salary' 17,48,950 Note 1: It is assumed that commission is not fixed at ₹ 40,000 per annum but based on 2% of turnover. If sales commission is assumed as fixed ₹ 40,000 p.a., then it will not be included while calculating limit of 12% of salary for the purpose of computing exempt value of Employer's contribution to recognized provident fund.