Income tax Calculation Example 5 for Salary Employees 2023-24 – Example 5
Example 5
For Assessment Year 2023-24
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 concessions 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 conccssional 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 |
COMUTATION 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 (Cities having population>25 lalch as per 2001 census) 15% of salary for 10 months=Rs.1,05,000/- |
1,38,600 |
| 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 @ 10% of cost (10% of Rs. 2,00,000) Rs. 20,000 | |
| 4(c)(i) | Total of 14(a)1-(b)+(c)I (1,05,000+ 33,600+ 20,000) = Rs.158,600 Less: rent recovered: (-)Rs. 60,000 =Rs.98,600 |
|
| 4(d) | Add: Perquisite for frec gas, electricity, water etc. Rs.40,000 (+) Rs 98,600 (4(c)(i)] = Rs1,38,600 Total perquisites |
|
| 5 | Gross Total Income (Rs.8,40,000H- 1,38,600) | 9,78,600 |
| 6 | Less: Standard deduction u/s 16(ia) | 50,000 |
| 7 | Gross I Mal Income | 9.28.600 |
| 8 | Less: Deduction Us 80C: (i). Provident Fund (80C) : 42,000 (ii)LIC (80C) : 10,000 (iii)Subscription to Unit Linked Insurance Plan(80C): 50,000/- Total =102,000 Restricted to Rs 1.02.000 tits SW |
1.112,000 |
| 9 | Total Income | 8.26,600 |
| 10 | Tax Payable | 77,820 |
| II | Add: Health & Education Cess @ 4%. |
3113 |
| 12 | Total Income Tax payable | 80,933 |
or Aadhaar number, as the case may be.
It may be noted that tax liability may not be the same in case the taxpayer opts for concessional tax regime under section 115BAC of the Act.A40