UNIT II - INCOME FROM SALARIES
WORKSHEET 2
SECTION A (10×3=30)
1. Compute the Basic salary of Mr.Prabhu for the Assessment year 2024-25 from the following information:
Salary received Rs.18,000
Tax Deducted at Source Rs.2,000
Own Contribution to Provident Fund Rs.3,000
2. Find out the taxable HRA of Mr. Raghu who is working in Trichy. Basic Salary Rs.3,000 p.m.
HRA Rs.700 p.m. (rent paid Rs.400 p.m.)
3. Differentitate between partially taxable of fully taxable allowances.
4.Write a short note on ‘Commutation of Pension’.
5. Mr. Sen left service after 3 years and received a refund of Rs.60,000 from provident fund on 4-6-2023.
It consists of his own contribution plus an equal contribution by his employer plus interest @12% p.a.
How would it be treated for income-tax purposes, if he was contributing to S.P.F?
6. Explain the provisions relating to Entertainment allowance.
7. Write a short note on Statutory provident fund.
8. Calculate Taxable HRA from the following:
Salary 5,000 p.m.
D.A 1,000 p.m.
HRA 800 p.m
Rent paid in New Delhi 2,000 p.m. 40% of D.A. forms part as retirement benefit.
9. State the allowances that are exempted from tax u/s10(14).
10. List the any 6 fully taxable allowance of salary.
SECTION B ( 5 X 8 = 40 Marks)
11. Explain the types of provident funds.
12. Mr. Gopal retires on 31-10-2023 after 20 years service and received Rs.48,000 as leave encashment
for 12 months. His employer allows him 11/2 months of leave for every one year of service. He has
already enchased leave for 18 months. His salary for 2022-23 was Rs.15,000 and from 1-4-2023 it was
raised to Rs.16,000 p.m. Compute the taxable amount of leave encashment.
13. Mr. R. retired on 31.12.2023 and his pension was fixed at 3,600p.m. He got 3/4 the of the pension
commuted for which he received 1,80,000 from his employers, a Ltd Co. Compute the taxable
amount of commuted value of pension if:
(a) He gets gratuity
(b) He does not get gratuity
(c) He is a Govt. employee.
14. Outline the provisions pertaining to perquisites taxable in the hands of specified employees.
15. Mr. B received Rs. 6,00,000 on his retirement on 30.9.2023 as gratuity from his employer with whom
he has served for 29 years and 7 months. Compute the taxable amount in each of the following cases
separately if his salary during calendar year 2015 was Rs.2,0000 and during 2023 was Rs.2,4000
and it is due on the 1st of every month. He had worked earlier with a company for 6 years and
received Rs 2.92,000 as gratuity which was fully exempted U/S 10 (10).
He is working in a factory at Ludhiana (Covered under the payment of Gratuity Act) He is working in a
commercial office at Delhi (Not covered under the payment of Gratuity Act.
16. Calculate House Rent Allowance u/s 10 (13A) in respect of residential accommodation situated in Delhi)
a. Salary 99,000 per annum
b. Dearness Allowances 87360 per annum
c. House Rent allowance 19,200 per annum
d. Petrol allowance. 2,400 per annum
e. House Rent Paid 36,000 per annum
f. General Provident Fund 42,000 per annum
17. Mr. P retires on 1 July 2023 after 18years of service and receives Rs 75000 as leave encashment for 15
months. His employer allows 45 days of leave for every completed yr of service. During his
service he has already enchased leave for 12 months calculate the taxable amount of leave
encashment if his salary during 1/7/2022 to 1/7/2023 was Rs. 5000 per month.
18. Mr. U retired on 31/12/2023 and his pension was fixed at Rs 3600 pm. He got 3/4ths of the pension
commuted for which he received Rs 180000 from his employer. Find out the taxable amount
of commuted pension.
a) if he does not receive gratuity.
b) if he receives gratuity.
19.Mr. Abdullah is an employee of MN Ltd. He received Rs.68.000 as gratuity. He is covered by Payment
of Gratuity Act 1972. He retired on 15th July 2023 after rendering service of 36 years and 9 months.
At the time of retirement his monthly basic salary was 3,200 and DA (forming part) was 1.000.
Calculate exempted gratuity
SECTION C (1×15=30)
20. Mr. Raman an employee of a private company in Chennai.He supllies you the following particulars of
his income:
a) Basic salary Rs.20,000 p.m
b) D.A 50% of salary (50% of D.A enters his pay for service benefits)
c) Marriage Allowance
d) Education Allowance Rs.270 p.m (Allowance@ Rs. 90 p.m per child)
e) Bonus one month salary
f) Entertainment Allowance Rs.1200 p.m
He and his employer contribute @ 16% of salary to RPF separately. During 2023-2024, he had received
two months basic salary as advance which was included in the income of the previous year 2023-24. He is
provided rent fee house owned by the employer. He also received a fixed medical allowance of 300 p.m.
Amount spent on medicine 4,500 during the year. Calculate his salary income for the assessment year 2024-
2025.
21. Compute the salary of MR. R who is working as a sales manager
Salary-25600 per month
DA-600 per month
Entertainment allowance-600 per month
CCA-200 per month
Bonus-6000
Employer's and his contribution to RPF-48000
Interest credited on accumulated balance of fund @ 10%-28000
During the year he is provided with an unfurnished house for which employer charges Rs 400 per month.
The municipal value of the house being Rs 12000 per annum. Population is above 25 lakhs.
He is also provided with a 1.8 litre car with a driver which he uses for both official and personal purposes.
Its expenses of running and maintenance Rs 2000 are met by the employer.
During the yr he contributed Rs 4000 in ULIP and purchased NSC VIII issue worth Rs 12000 in the pr yr..
interest accrued on NSC VIII issue purchased earlier was 4800 He also received Rs 18470 as bank interest
during the pr yr. compute his income for the pr.yr.
22. Mr. A was working as a sales manager drawing a salary of Rs 50000 p/m in Bangalore. He was receiving
the following emoluments: Salary falls due on the 1 day of every month
CCA Rs 9600 p.m.
HRA 12000 p.m. He stays in his own house.
Travelling allowance 28000 he spent only Rs 25000 on travel. He retired from
Service on 31 Jan 2023.
He received gratuity of Rs. 924800 for serving 34 years in this company. His pension was fixed at Rs.
24000 p/in he gets 3/4th of his pension commuted for a lump sum of Rs. 1020000.
Leave encashment Rs. 250000 being 5 months' salary received on 31.1.23. He was allowed one month leave
for every year of service. No of months of leave not utilized 5 months. Compute the taxable salary for the
assessment year.
23. Following are the particulars of Mr. A's salary income. Compute his salary income for the Assessment
Year 2022-23.
Salary (Basic) Rs.60,000 p.m.
DA-50% of salary (50% of D.A. forms part of Salary)
Bonus-one month's basic salary
Leave Travel Concession equal to one month's basic salary (given once in two years)
Conveyance allowance Rs.4,000p.m.
House Rent allowance Rs.12,000p.m. Mr. A is paying Rs.15,000p.m. as rent
Entertainment Allowance Rs.2,000p.m.
Education allowance @ Rs.500p.m. per child.
Two children of Mr. A are studying in a school, and he is paying a monthly
tuition fees of Rs.1,800p.m.for both children.
Helper allowance Rs.2,000 p.m.
Uniform allowance Rs.5,000 pa
Conveyance allowance is given to Mr. A to meet petrol expenses of his car which he uses to come to
office and go back to his residence. It is also observed that he spends 50% of the entertainment allowance
on visitors coming to meet in connection with his business/job duties.
Salaries
Section A
1. What are the different forms of salary ? (2017)
2. Write a short note on “Commutation of pension”? (2022)
3. Mr.Sen left service after 3 years and received a refund of
Rs. 60,000 from provident fund on 4-6-2023. It consists of his
own contribution plus an equal contribution by his employer
plus interest @12% p.a. How will it be treated for income tax
purposes , if he was contributing to S.P.F ? (2022)
4. X,a resident of Ajmer, receives Rs.48,000 as basic salary
during the previous year 2023-24. In addition, he gets Rs.4,800
as dearness allowance forming part of basic salary, 7%
commission on sales made by him(sales made by X during the
relevant previous year is Rs.86,000) and Rs.6,000 as HRA. He
however pays Rs.5,800 as house rent. Determine the quantum
of HRA exempt from tax. (2017)
Section B
5. Explain the various allowances generally paid to employees.
(2017)
6. Define the term perquisite and how they are treated for
income tax purposes ? (2022)
7. Mr. Sharma retires on 30.09.2023 after 20 years of service
and received 96,000 as leave encashment for 12 months. His
employer allows him 1½ months leave for every one year of
service. He has already encashed leave for 18 months. His
salary for 2023-24 was 6,000 per month and from 01.04.2023 it
was raised to 8,000 per month. Compute the taxable amount of
leave encashment. (2017)
8. Mr.Jitender is in receipt of annual salary of Rs.2,00,000. He is
provided with furnished accommodation at Gurgaon
(Population is 11Lakhs) for which the employer pays a rent of
Rs.4,000 per month and deducts Rs.1,000 per month from
employer salary. The cost of furnishing of the residence
amounts to Rs.30,000. Calculate the value of perquisite if the
house is occupied for 9 months only. (2022)
9. Analyse the Gross salary for A.Y.2024-25 if a) He is a Govt.
employee b) He is a non govt. Employee entitled to gratuity
c) He is a non govt. Employee not entitled to gratuity
Vivek retired on 31st October, 2024. He was entitled to a
pension of Rs.4,000p.m. At the time of retirement, he got % of
the pension commuted and received Rs.4,00,000. He was in
receipt of basic salary of Rs.10,000p.m. D.A Rs.5,000 p.m.
Entertainment allowance (EA) Rs.1,000p.m. (2021)
Section C
10. Mr. Raman is an employee of a private company in Chennai.
He supplies you the following particulars of his income.
(a) Basic salary Rs.20,000 p.m.
(b) DA 50% of salary (50% of D.A enters into pay for service
benefits)
(c) Marriage allowance Rs.600 p.m.
(d) Education allowance Rs.270 p.m. (Allowance @ Rs.90 p.m.
per child)
(e) Bonus one month salary.
(f) Entertainment allowance Rs. 1,200 p.m.
He and his employer contribute @ 16% of salary to RPF
separately. During 2023-2024, he had received two months
basic salary as advance which war included in the income of the
previous year 2023-24. He is provided rent for house owned by
the employer. He also received a fixed medical allowance of
Rs.300 p.m. Amount spent on medicine Rs. 4,500 during the
year. Calculate his salary income for the assessment year
2024-25. (2022)
11. Following are the particulars of Mr.A salary income.
Compute his salary income for the AY 2024-25.
Salary (Basic) - Rs.60,000 p.m
D. A - 50% of salary (50% of DA forms a part of salary)
Bonus - one month’s basic salary.
Leave Travel commission - equal one month’s basic salary
(given once in two years)
Conveyance allowance Rs.4,000 p.m.
House Rent allowance Rs.12,000 p.m.
Mr.A is paying Rs.15,000 p.m. as rent.
Entertainment Allowance Rs.2,000 p.m.
Education allowance @Rs. 500 p.m. per child,
Two children of Mr.A are studying in a school and he is paying a
amount of tuition fee of Rs. 1,800 per month for both children.
Helper allowance Rs .2,000 p.m.
Uniform allowance Rs.5,000 p.a.
Conveyance allowance is given to Mr.A to meet petrol
expenses of his vehicle which he uses to come to office and go
back to his residence. It is observed that he spends 50% of the
entertainment allowance on vehicle coming to meet in
connection with his business/job duties. (2022)
