Mr.

Ayush, a Software Engineer Indian Resident aged 60 , working in a private Construction Company in Bangalore on a basic pay scale of Rs
2014.He also sits in his own consulting office in the evening. From the following, compute the tax liability for Mr. Rahul for the AY 20-21, as
Rahul Retired on 31st December 2019.

Particulars
1 DA
2 Contribution by him and employer to Statutory Provident Fund
3 Interest credited to SPF at 4.25%
4 City compensatory allowance
5 Entertainment allowance
6 Overtime allowance
7 Medical allowance
8 Children education allowance for 2 children (Rs 200 for tuition fees and Rs 300 for Hostel expenditure)
9 Uniform allowance
10 Provided with leased furnished house
11 Watchman and gardener were also provided at a monthly salary of
12 Provided with car of 1.5cc for official and personal use with driver.
13 Company has provided free lunch for 300 days
14 Gift in kind
15 Free Recreational Facilities
16 Free training courses
17 Laptop provided for official use
18 Mobile Bill paid
19 Encashment of earned leave
20 Gratuity received
21 Provident Fund withdrawn
22 Company sold a car to Mr Rahul at Rs.250000.The car was purchased on 15th dec 2016 at 550000
23 He, along with his family consisting of 3 children made one week tour to different places in India under LTC.
24 Club bill reimbursed by the company (personal use)
25 Life insurance paid by the company
26 Professional tax deducted from salary
 The details of Mr Rahul's flat are as follows:

Particulars Amount
Date of completion 3/31/2017
Fair rent 120000
Actual rent received 90000
Municipal value 100000
Standard rent NA
Municipal tax 13250
Interest on loan for purchase
2015– 16 19200
2016 – 17 50800
2017 – 18 50250
2018 – 19 49800
2019 – 20 48600

Following are the details of receipts and payment of Mr.Rahul for AY 20-21

Receipts Amt. Payment Amt.

Balance b/d 31000 Rent of office 60000
Consultation Fees 108500 Electricty & Water bills 11800
Site Visit Fees 10500 Purchase of books 13250
Commission on sale of properties 55000 Equipments 13000
Dividend 11500 Income tax 10000
Any other professional receipt 9750 Salary to staff 27500
Life insurance premium 13500
Interest on loans 13500
Office Expenses 10000

Balance c/d 53700

226250 226250
 Other information :
1 Depreciate equipments @ 7.5% books @ 20%.
2 Loan was taken for professional use.
 a basic pay scale of Rs 30,000 - 1500 – 34500 - 2000 - 38500 with effect from 1 st January
ul for the AY 20-21, assuming that salary becomes due on the last day of the month. Mr.
2019.

Amount
20% of Basic Pay
12% each of his salary
Rs. 21000
Rs. 1750 per month
Rs. 1000 per month
1500 per month
1000 per month
Rs.500per month
Rs.1500 per month
Annual Rent= Rs.90000 , cost of furnishing = Rs 125000
Rs.3000 each
Driver salary= Rs. 12500 All expenses met by employer
Rs 50 per day
3,000 pa
Rs 5000
Rs 10000
Rs.25000
Rs 9000
Rs. 20,000
Rs. 186500
Rs. 50000

Paid by company Rs 95000

Rs. 15000
Rs. 5000/month
Rs. 24000 for the year
 Amount
3/31/2017
120000
90000
100000
NA
13250

19200
50800
50250
49800
48600
 Computation of Total Income of Dr. Rahu
Sl.No

3
4

5
 Computation of Total Income of Dr. Rahul for AY 20-21
Particulars
INCOME FROM SALARY
Basic Pay
DA @ 40% of basic pay (as per terms of employment)
Company contribution to SPF - exempted
Interest credited to SPF - exempted
Allowances
City compensatory allowance = 1750 x 12
Entertainment allowance = 1000 x 12
Overtime allowance = 1500 x 12
Medical allowance = 1000 x 12

Children education allowance = 500 x 12 x 2 = 12000

Less: exempted = 400 x 12 x 2 = 9600
Uniform allowance = 1500 x 12 (fully exempt if expense incurred)
Perquisites
Rent free furnished house:
15% of salary = 346500 + 138600 +21000+12000+18000+12000+2400 = 550500 x 15/100 = 82575
Add: 10% of the cost of furnishing = 125000 x 10/100 = 12500
Watchman's salary = 3000 x 12
Garderner's salary - 3000X12
Motor car of 1.5cc used for official and personal use
1800 + 900 x 12
Free lunch for 300 days = 50-50*300
Gift in kind
Free Recreational Facilities
Free Training Courses
Club bill paid by the company
Life Insurance paid by the company (10000*12)
Laptop provided for official use
Mobile Bill paid
Leave encashment
Sale of car at concessional amount
Cost on 15th December 2015 =550000
Less depreciation at 10% per annum on WDV basis
In 16-17 for 6 months = 550000 x 10/100 x 6/12 = 27500
=522500
Depreciation in 17-18 @ 10% = 52250
= 470250
Depreciation in 18-19 @ 10% = 70537.5
WDV as on 1st April 2019 = 399712.5
Less selling price = 250000
Leave travel concession - for 5 members including 3 children = 120000
Less: exemption only for 2 children = 95000 x 4/5 = 76000
Provident fund withdrawn
Gratuity Received

Other Items
Gross Salary
Deductions U/S 16
Standard deduction U/S 16 (i)

Professional tax paid U/S 16 (iii)

Income from salary

INCOME FROM HOUSE PROPERTY

Particulars

Gross annual value

Less: Municipal tax
Net annual value
Less: Deduction U/S 24
Standard deduction @ 30% NAV
Interest on loan 19-20 48600
Add: 1/5 of pre-construction int.(100000/5) 20000

Profit on Income from house property

INCOME FROM PROFESSION

Professional Receipts

Consultation fee
Visiting fee
Sale of medicine
Any other professional receipt
Total Professional Receipts

Professional expenses.

Rent of office
Electricity and water charges
Depreciation on books = 13250 x 20/100
Depreciation on equipment = 13000 x 7.5/100
Salary to staff
Interest on loan
Office expenses
Life insurance premium
Total Professional Expenses
Income from profession (183750-129925)

INCOME OF DR. RAHUL

Income from Salary
Profit on Income from House Property
Income from Profession
Total Income

Tax Liability of Dr. Rahul

Tax Slabs
upto 2.5lakh NIL
2.5L - 5L 5%
5L-10L 20%
Above 10L 30%
Total
Add: Cess @ 4%
TAX LIABILITY
Amount

346500
138600
0
0

21000
12000
18000
12000

2400
0

95075
36000
36000

32400
0
0
Exempted
Exempted
15000
120000
Exempted
Exempted
20000

149712.5
149712.5

44000
Exempted
Exempted

0
1098687.5

50000
1048687.5
4800
1043887.5

Amount

120000
13250
106750

--

68600 Note: 2lakhs is the limit for interest deduction in self occupied
house.
38150

Amount

108500
10500
55000
9750
183750

Amount

60000
11800
2650
975
27500
8500
5000
 13500
129925
53825

Amount
1,043,888
38,150
53,825
1,135,863

Amount
Nil
12,500
100,000
283,287
395787
15831.48
411618.48
t deduction in self occupied
 Working notes

Calculation of Basic Pay for the PY 19- 20. Salary becomes due on the last day of the month.

1-1-2014 to 31-12-2014 = 30,000

1-1-2015 to 31-12-2015 = 31,500
1-1-2016 to 31-12-2016 = 33,000
1-1-2017 to 31-12-2017 = 69,000
1-1-2018 to 31-12-2018 = 36,500
1-1-2019 to 31-12-2019 = 38,500.

April 2019’s salary , due on 30th April, to December 2019’s salary due on 31st December 2019, for 9 mo
January 2020’s salary to March salary due on 31st march 2020 for 3 months at Rs 82000 each.
41000
38500 x 9 = 346500
= 346500

Calculation of GAV for IFHP

a Municipal Value 100000

b Fair Rent 120000
c Actual Rent 90000

d Higher of a,b,c 120000

 of the month.

December 2019, for 9 months at Rs 77000 each.