Ramamoorthy, an employee of M/s. Gopalkrishan & Co. of Chennai receives following payments during the previous year ended March 31, 2019. Particulars (₹) Basic Salary 40,000 Dearness Pay 3,000 Leave Salary 5,400 Prof

Computation of Taxable Income of Mr. Ramamoorthy for the Assessment Year 2019-20 Particulars Amounts (₹) Basic Salary 40,000 Dearness Pay 3,000 Leave Salary 5,400 Professional Tax paid by the employer 1,000 Valuation of Perquisites of house provided by the employer: 5,260 15% of Salary (₹40,000 + ₹3,000 + ₹5,400) = ₹7,260 Add: Furniture Rent paid by employer ₹1000 Less: Rent Recovered by the employer (₹3000) (₹7260 + ₹1000 - ₹3000) = ₹5,260 Gross Salary 54,660 Less: Standard Deduction u/s 16(ia) (40,000) Less: Professional Tax u/s 16(iii) (1,000) Taxable Salary 13,660 Less: Deduction u/s 80C (4,000) Total Taxable Income 9,660 Note: Donation paid to local temple is not allowed under section 80G of the Income Tax Act, 1961 assuming the temple is not Registered u/s 80G of the Income Tax Act, 1961. Assuming that the dearness pay forms a part of Salary for the purpose of computation of superannuation or retirement benefits.Alternatively Dearness allowance can also be assumed not forming part of retirement benefits, then in such a case, It will not be included in valuation of Rent Free Accommodation. In such a case Perquisite of Rent Free Accommodation shall be 15% of (₹40,000 + ₹5,400) = ₹6810 + 1,000 - 3,000 = ₹4,810. Gross salary will be = 54,210, Taxable salary will be = ₹13,210, Taxable Income = 9,210.