Questions.

Q.1. Mr. X is in receipt of following allowances from his employer.

1) Conveyance allowance Rs. 600 p.m. and he spent Rs 5,000 for the year
2) Transport Allowance Rs. 2,200 p.m.
3) Uniform Allowance Rs 5,000 p.a. and he spent Rs. 4,000 in a year
4) Education and Hostel Allowance Rs. 450 p.m. for 3 child.
Calculate the Total taxable amount of allowances.

Q.2. S is entitled to a basic salary of Rs. 50,000 per month and dearness allowance of
Rs. 10,000 per month, 40% of which forms part of retirement benefits. He is also
entitled to HRA of Rs. 20,000 per month. He actually pays Rs. 20,000 per month as
rent for a house in Delhi. Compute the taxable HRA.

Q.3. Mr. R is entitled to a basic salary of Rs. 5,000 per month and dearness allowance
of Rs. 1,000 per month (40% of which do not form part of retirement benefits). He is
also entitled to HRA of Rs. 2500 p.m. He actually pays Rs. 3000 p.m. rent for a house
in Indore. Compute taxable HRA.

Q.4. What would be the taxable HRA in Q.3 if Mr. R is staying in Mumbai, instead of
Indore?

Q.5. Mr. Akshay retired from service w.e.f. 1-11-2018 after serving for 18 years and 9
months. At the time of retirement he was entitled to the following remuneration:
a) Basic Salary Rs. 35,000 per month
b) Dearness allowance @20% of salary (60% of which forms part of salary for
retirement benefits)
On retirement, he received a sum of Rs. 6, 00,000 as gratuity. He was entitled to a
pension of Rs. 17,500 per month w.e.f. 1-11-2018; from 1-1-2019 he got 60% of his
pension commuted and received a sum of Rs. 750,000 as commuted pension.
Compute his gross salary for assessment year 2019-20.

Q.6. Calculate the amount of taxable Gratuity, if Mr. Akshay is covered under the
Payment of Gratuity Act.
Q.7. What will be the taxable amount of Gratuity in Q.5, if Mr. Akshay is a
Government employee?

Q.8. ABC Ltd. has advanced a Concessional loan of Rs. 400,000 to Mr. Shah @ 4% p.a.
for purchase of a car on 1-5-2018. Mr. Shah has been regularly repaying the loan in
installments of Rs. 20,000 p.m. at the end of each month. Compute the value of
perquisite on account of interest assuming the interest charged by SBI is 10% p.a.

Q.9. Mr. Jaju had been working with T Ltd. in a tribal area since 1-10-2004. He was
entitled to the following emoluments:
1) Basic salary with effect from 1-1-2018 Rs. 6000 per month
2) Dearness Allowance 40% of basic salary (50% forms part of retirement benefit)
3) Medical allowance Rs. 500 per month (entire amount is spent on his own medical
treatment)
4) Entertainment allowance Rs. 400 per month
5) Children education allowance Rs. 40 per month per child for three children
6) Hostel expenditure allowance Rs. 100 per month per child for three children
7) Tribal area allowance Rs. 300 per month
8) Uniform allowance Rs. 250 per month (He spends Rs. 1500 on purchase and
maintenance of uniform)
9) House rent allowance Rs. 750 per month. He pays Rs. 1000 per month as rent
10) He contributes Rs. 900 per month to a recognized provident fund to which his
employer contributes an equal amount.
11) He retired from his job on 1-1-2019 and shifted to Pune. He was entitled to the
following benefits at the time of his retirement:
a. Gratuity Rs. 115,000
b. Pension from 1-1-2019 Rs. 2000 per month
c. Payment from recognized provident fund Rs. 300,000
d. Encashment of earned leave for 150 days Rs. 36,000. He was entitled to 40 days
leave for every completed year of service.
e. He got 50% of his pension commuted in lump sum w.e.f. 1-3-2019 and received Rs.
120,000 as commuted pension.
Compute his income from salary for the assessment year 2019-20 and also his
taxable income if he made the following payments during the previous year:
a) Professional tax Rs. 500
b) Life Insurance Premium of Rs. 15,000 on his life policy of Rs. 100,000
c) Deposit in PPF account Rs. 50,000

Q.10. Calculate the taxable income in the above problem, if Mr. Jaju is covered under
The Payment of Gratuities Act and his place of residence is Mumbai.

Q.11. Calculate the taxable income in the Q9, if Mr. Jaju is a Government employee
and the contribution is made to Statutory Provident Fund.

Q.12. Ms. Madhuri is a post graduate in Management. She got placed in Wipro Ltd.
on 1-5-2018 at Delhi and was entitled to the following emoluments:
1) Basic salary Rs. 5000 p.m.
2) Dearness allowance (forming a part of salary) 20% of basic salary
3) Entertainment allowance Rs. 500 p.m.
4) Commission @ 2% on sales of Rs. 500,000 achieved by Ms. Madhuri in the relevant
previous year.
5) Rent-free unfurnished accommodation in Delhi which is owned by the employer
and whose fair rental value is Rs. 48,000 p.a.
6) Motor-car (1.4 litre engine capacity) with driver, which he uses partly for official
and partly for personal purposes.
7) The monthly expenses incurred by Ms. Madhuri on gas and electricity were Rs.
500 which were reimbursed by the employer
8) Reimbursement of educational expenses of his two children which amounted to
Rs. 350 p.m.
9) On 1-2-2019, her husband fell ill and the employer reimbursed the expenditure of
medical treatment amounting to Rs. 17,500
10) A watchman, a sweeper, a cook and a gardener have been provided to whom the
company pays a salary of Rs. 400 p.m. each
11) Loan of Rs. 100,000 @8% p.a. for construction of his house was given by the
company. (SBI rate of interest is 7% p.a.)

Q.13. Calculate the taxable income in above problem, if interest charged by company
is 5%, the loan amount is still outstanding and nothing has been repaid by her, Ms.
Madhuri is residing in a city with population above 10 lakhs but less than 25 lakhs.

Q.14. Ms. Vinita (age 35 years) joined a company on 1-6-2018 and was paid the
following emoluments and allowed perquisites as under:
1) Basic pay Rs. 30,000 per month.
2) DA Rs. 12,000 per month
3) Bonus Rs. 60,000 per annum
4) Furnished accommodation in Delhi owned by employer and provided free of cost.
5) Value of furniture is Rs. 300,000
6) Motor car owned by the company (with engine capacity less than 1.6 litres) along
with chauffeur for official and personal use.
7) Sweeper salary paid by company Rs. 1000 per month
8) Watchman salary paid by company Rs. 1000 per month
9) Education facility provided free of cost to 3 children of employee. The school is
owned and maintained by the company
10) Interest free loan of Rs. 500,000 given on 1-12-2018 for purchase of a house. One
installment of Rs. 50,000 was paid on 1-3-2019. Assume SBI rate to be 8% p.a.
11) One loan of Rs. 40,000 was provided for purchase of Computer @7% p.a. on 1-
12019. No repayment was done during the year. Assume SBI rate to be 10% p.a.
12) Rs. 10,000 was spent on the treatment of Ms. Vinita’s Husband in a hospital
maintained by the employer.
13) Rs. 5000 paid by the company on treatment of the child of assesse in a govt.
hospital.
14) Rs. 150,000 spent on medical treatment of employee outside India. (Expenditure
is permitted by RBI)
15) The company has provided a laptop to Ms. Vinita for personal use.
16) A watch worth Rs. 8000 was gifted to Ms. Vinita by the company.
Calculate the gross salary and taxable income of Ms. Vinita.