Calculation of tax in the case of an employee below age of sixty years of a private company in Mumbai who was provided accommodation in a flat at concessional rate for ten months and in a hotel for two months
Example 5
For Assessment Year 2018-19
Illustrating valuation of perquisite and calculation of tax in the case of an employee below age of sixty years of a private company in Mumbai who was provided accommodation in a flat at concessional rate for ten months and in a hotel for two months (With valid PAN furnished to employer).
|
S.No. |
Particulars |
Rupees |
|
1 |
Salary |
7,00,000 |
|
2 |
Bonus |
1,40,000 |
|
3 |
Free gas, electricity, water etc. (Actual bills paid by company) |
40,000 |
|
4(a) |
Flat at concessional rate (for ten month). @ Rs.36000/month |
3,60, 000 |
|
4(b |
Hotel rent paid by employer (for two month) |
1,00,000 |
|
4(c) |
Rent recovered from employee. |
60,000 |
|
4(d) |
Cost of furniture. |
2,00,000 |
|
5 |
Subscription to Unit Linked Insurance Plan |
50,000 |
|
6 |
Life Insurance Premium |
10,000 |
|
7 |
Contribution to recognized P.F. |
42,000 |
COMPUTATION OF TOTAL INCOME AND TAX PAID THEREON:
|
S.No. |
Particulars |
Rupees |
|
1 |
Salary |
7,00,000 |
|
2 |
Bonus |
1,40,000 |
|
3 |
Total Salary(1+2) for Valuation of Perquisites |
8,40,000 |
|
Valuation of perquisites |
|
|
|
4(a) |
Perquisite for flat: Lower of (15% of salary for 10 months=Rs.1,05,000/-) and (actual rent paid= Rs 3,60,000) i.e. Rs. 1,05,000 |
1,38,600 |
|
4(b) |
Perquisite for hotel : Lower of (24% of salary of 2 months=Rs 33,600) and (actual payment= Rs 1,00,000) i.e. Rs 33,600 |
|
|
4(c) |
Perquisites for furniture(Rs.2,00,000) @ 10% of cost Rs. 20,000 |
|
|
4(c)(i) |
Total of [4(a)+(b)+(c)] (1,05,000+ 33,600+ 20,000)Rs.158,600 Less: rent recovered (-)Rs. 60,000 = Rs. 98,600 |
|
|
4(d) |
Add Perquisite for free gas, electricity, water etc. Rs.40,000 (+) Rs 98,600 [4(c)(i)] = Rs1,38,600 Total perquisites |
|
|
5 |
Gross Total Income (Rs.8,40,000+ 1,38,600) |
9,78,600 |
|
6 |
Gross Total Income |
9,78,600 |
|
7 |
Less: Deduction U/s 80C: (i). Provident Fund (80C) :42,000 (ii). LIC (80C) |
|
|
|
:10,000 (iii). Subscription to Unit Linked Insurance Plan(80C) :50,000/- Total = 1,02,000 Restricted to Rs 1,02,000 u/s 80C |
1,02,000 |
|
8 |
Total Income |
8,76,600 |
|
9 |
Tax Payable |
87,820 |
|
10 |
Add: |
|
|
|
(i). Education Cess @2% |
1756 |
|
|
(ii). Secondary and Higher Education Cess @1% |
878 |
|
11 |
Total Income Tax payable |
90,454 |
|
12 |
Rounded off to |
90,450 |
Source: https://www.incometaxindia.gov.in