Example 1
For Assessment Year 2013-14
(A) Calculation of Income tax in the case of an employee below the age of sixty years and having gross salary income of:
(i) Rs. 1,50,000/-,
(ii) Rs.2,00,000/-,
(iii) Rs.5,00,000/-,
(iv) Rs. 10,00,000/-and
(v) Rs.20,00,000/-.
(B) What will be the amount of TDS in case of above employees, if PAN is not submitted by them to their DDOs/Offices:
| Particulars | Rupees (i) | Rupees (ii) | Rupees (iii) | Rupees (iv) | Rupees(v) |
| Gross Salary Income (including allowances) | 1,50,000 | 2,00,000 | 5,00,000 | 10,00,000 | 20,00,000 |
| Contribution of G.P.F. | 10,000 | 45,000 | 50,000 | 1,00,000 | 1,00,000 |
Computation of Total Income and tax payable thereon
| Particulars | Rupees (i) | Rupees (ii) | Rupees (iii) | Rupees (iv) | Rupees (v) |
| Gross Salary | 1,50,000 | 2,00,000 | 5,00,000 | 10,00,000 | 20,00,000 |
| Less: Deduction U/s 80C | 10,000 | 45,000 | 50,000 | 1,00,000 | 1,00,000 |
| Taxable Income | 1,40,000 | 1,55,000 | 4,50,000 | 9,00,000 | 19,00,000 |
| (A) Tax thereon | Nil | Nil | 25,000 | 1,10,000 | 4,00,000 |
| Add:
(i) Education Cess @ 2%. (ii) Secondary and Higher Education Cess @1% |
Nil
Nil |
Nil
Nil |
500
2200 |
250
1100 |
8000
4000 |
| Total tax payable | Nil | Nil | 25,750 | 1,13,300 | 4,12,000 |
| (B) TDS under sec. 206AA in case where PAN is not furnished by the employee | Nil | Nil | 90,000 | 1,80,000 | 4,12,000 |
Example 2
For Assessment Year 2013-14
Calculation of Income Tax in the case of an employee below the age of sixty years having a handicapped dependent ( With valid PAN furnished to employer).
| S.No. | Particulars | Rupees |
| 1 | Gross Salary | 3,20,000 |
| 2 | Amount spent on treatment of a dependant, being person with disability (but not severe disability) | 7000 |
| 3 | Amount paid to LIC with regard to annuity for the maintenance of a dependant, being person with disability( but not severe disability) | 50,000 |
| 4 | GPF Contribution 25,000 | |
| 5 | LIP Paid | 10,000 |
Computation of Tax
| S.No. | Particulars | Rupees |
| 1 Gross Salary | 3,20,000 | |
| Less: Deduction U/s 80DD (Restricted to Rs.50,000/- only) | 50,000 | |
| 2 Taxable income | 2,70,000 | |
| Less: Deduction U/s 80C (i) GPF Rs.25,000/-
(ii) LIP Rs. 10,000/- = Rs.35,000/- |
35,000 | |
| 3 | Total Income | 2,35,000 |
| 4 | Income Tax thereon/payable | 3,500 |
| Add:
(i). Education Cess @2% (ii). Secondary and Higher Education Cess @1% |
70
35 |
|
| 5 | Total Income Tax payable | 3,605 |
| 6 | Rounded off to | 3,610 |
Example 3
For Assessment Year 2013-14
Calculation of Income Tax in the case of an employee below age of sixty years where medical treatment expenditure was borne by the employer ( With valid PAN furnished to employer).
| S.No. | Articulars | Rupees |
| 1 | Gross Salary | 3,00,000 |
| 2 | Medical Reimbursement by employer on the treatment of self and dependent family member | 30,000 |
| 3 | Contribution of GPF | 20,000 |
| 4 | LIC Premium | 20,000 |
| 5 | Repayment of House Building Advance | 25,000 |
| 6 | Tuition fees for two children | 60,000 |
| 7 | Investment in Unit-Linked Insurance Plan | 20,000 |
Computation of Tax
| S.No. | Particulars | Rupees | |
| 1 | Gross Salary | 3,00,000 | |
| Add: Perquisite in respect of reimbursement of Medical Expenses In excess of Rs. 15,000/- in view of Section 17(2)(v) | 15,000 | ||
| 2 | Taxable income | 3,15,000 | |
| Less: Deduction U/s 80C | |||
| (i) GPF | Rs. 20,000/- | ||
| (ii) LIC | Rs. 20,000/- | ||
| (iii) Repayment of House Building Advance | Rs.25,000/- | ||
| (iv) Tuition fees for two children | Rs. 60,000/- | ||
| (v) Investment in Unit-Linked Insurance Plan | Rs. 20,000/- | ||
| Total =Rs. 1,45,000/- | |||
| Restricted to Rs. 1,00,000/- | 1,00,000 | ||
| 3 | Total Income | 2,15,000 | |
| 4 | Income Tax thereon/payable | 1,500 | |
| Add:
(i). Education Cess @2% (ii). Secondary and Higher Education Cess @1% |
30
15 |
||
| 5 | Total Income Tax payable | 1,545 | |
| 6 | Rounded off to | 1,550 |
Example 4
For Assessment Year 2013-14
Illustrative calculation of House Rent Allowance U/s 10 (13A)in respect of residential accommodation situated in Delhi in case of an employee below the age of sixty years (With valid PAN furnished to employer).
| S.No. | Particulars | Rupees |
| 1 | Salary | 2,50,000 |
| 2 | Dearness Allowance | 1,00,000 |
| 3 | House Rent Allowance | 1,40,000 |
| 4 | House rent paid | 1,44,000 |
| 5 | General Provident Fund | 36,000 |
| 6 | Life Insurance Premium | 4,000 |
| 7 | Subscription to Unit-Linked Insurance Plan | 50,000 |
Computation of total income and tax payable thereon
| S.No. | Particulars | Rupees |
| 1 | Salary + Dearness Allowance + House Rent Allowance 2,50,000+1,00,000+1,40,000 = 4,90,000 | 4,90,000 |
| 2 | Total Salary Income | 4,90,000 |
| 3 | Less: House Rent allowance exempt U/s 10(13A):
Least of: (a) Actual amount of HRA received= 1,40,000 (b) Expenditure of rent in excess of 10% of salary (including D.A. presuming that D.A. is taken for retirement benefit) (1,44,000-35,000) = 1,09,000 (c) 50% of Salary(Basic+ DA) = 1,75,000 |
1,09,000 |
| Gross Total Income | 3,81,000 | |
| Less: Deduction U/s 80C
(i) GPF Rs. 36,000/- (ii) LIC Rs. 4,000/- (iii) Investment in Unit-Linked Insurance Plan Rs. 50,000/- Total =Rs.90,000/- |
90,000 | |
| 3 | Total Income | 2,91,000 |
| Tax payable on total income | 9,100 | |
| Add:
(i). Education Cess @2% (ii). Secondary and Higher Education Cess @1% |
182
91 |
|
| Total Income Tax payable | 9,373 | |
| Rounded off to | 9370 |
Example 5
For Assessment Year 2013-14
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. 3,60,000 | 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 |
| 8 | Investment in long term infrastructure bonds (80CCF) | 20,000 |
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(l+2) for Valuation of Perquisites | 8,40,000 |
| Valuation of perquisites | ||
| 4(a) | Perq. for flat: Lower of (15% of salary for 10 mnths.=Rs. 1,05,000/-) and (actual rent paid= Rs 3,60,000) Rs. 1,05,000 1,38,600 | Rs l,38,600 |
| 4(b) | Perq for hotel : Lower of (24% of salary of 2 mths.=Rs 33,600) and (actual payment= Rs 1,00,000) Rs. 33,600 | |
| 4(c) | Perquisites for furniture(Rs.2,00,000) @ 10% of cost 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
perq. for free gas, electricity, water etc. Rs.40,000 (+) Rs 98,600 [4(c)(i)] = Rs l,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 & 80CCF:
(i). Provident Fund (80C) :42,000 (ii) LIC (80C) :10,000 (iii) Subscription to Unit Linked Insurance Plan(80C) :50,000/- (iv) Investment in Infrastructure Bond(80CCF) :20,000 Total = 1,22,000 Restricted to Rs 1,00,000 u/s 80C and Rs 20,000 u/s 80CCF |
1,20,000 |
| 8 | Total Income | 8,58,600 |
| 9 | Tax Payable | 1,01,720 |
| 10 | Add:
(i) Education Cess @2% (ii) Secondary and Higher Education Cess @1% |
2,034
1,017 |
| 11 | Total Income Tax payable | 1,04,771 |
| 12 | Rounded off to | 1,04,770 |
Example 6
For Assessment Year 2013-14
Illustrating Valuation of perquisite and calculation of tax in the case of an employee below the age of 60 years of a Private Company posted at Delhi and repaying House Building Loan ( With valid PAN furnished to employer)
| S.No. | Particulars | Rupees |
| 1 | Salary | 3,00,000 |
| 2 | Dearness Allowance | 1,00,000 |
| 3 | House Rent Allowance | 1,80,000 |
| 4 | Special Duties Allowance | 12,000 |
| 5 | Provident Fund | 60,000 |
| 6 | LIP | 10,000 |
| 7 | Deposit in NSC VIII issue | 30,000 |
| 8 | Rent Paid by the employee for house hired by her | 1,20,000 |
| 9 | Repayment of House Building Loan (Principal) | 60,000 |
| 10 | Tuition Fees for three children (Rs. 10,000 per child) | 30,000 |
Computation of total income and tax payable thereon
| S.No. | Particulars | Rupees |
| 1 | Gross Salary (Basic+DA+HRA+SDA) | 5,92,000 |
| Less: House rent allowance exempt U/s 10 (13A)
Least of: (a). Actual amount of HRA received. :Rs. 1,80,000 (b). Expenditure on rent in excess of 10% of salary (Including D.A.)assuming D.A. is including for retirement benefits (1,20,000- 40,000) :Rs. 80,000 (c). 50% of salary (including D.A) : Rs. 2,00,000 |
80,000 | |
| 2 | Gross Total Taxable Income 5,12,000 | |
| Less: Deduction U/s 80C
(i). Provident Fund : 60,000 (ii). LIP : 10,000 (iii). NSC VIII Issue : 30,000 (iv). Repayment of HBA : 60,000 (v). Tuition Fees (Restricted to two children) : 20,000 Total : 1,80,000 Restricted to 1,00,000 |
1,00,000 | |
| Total Income | 4,12,000 | |
| Income Tax thereon/payable | 21,200 | |
| Add:
(i) Education Cess @ 2% (ii) Secondary and Higher Education Cess @ 1% |
424
212 |
|
| Total Income Tax payable | 21836 | |
| Rounded off to | 21840 |
Example 7
For Assessment Year 2013-14
A. Calculation of Income tax in the case of a retired employee above the age of sixty years but below the age of 80 years and having gross pension of:
i. Rs. 4,50,000/-,
ii. Rs. 8,00,000/-,
B. What will be the amount of TDS in case of above employees, if PAN is not submitted by them to their DDOs/Offices:
| Particulars | Rupees (i) | Rupees (ii) |
| Gross Pension | 4,50,000 | 8,00,000 |
| Contribution of P.P.F. | 70,000 | 70,000 |
Computation of Total Income and tax payable thereon
| Particulars | Rupees (i) | Rupees (ii) |
| Gross Pension | 4,50,000 | 8,00,000 |
| Less: Deduction u/s 80C | 70,000 | 70,000 |
| Taxable Income | 3,80,000 | 7,30,000 |
| Tax thereon | 13,000 | 71,000 |
| Add:
(i) Education Cess @ 2%. (ii) Secondary and Higher Education Cess @ 1% |
260
130 |
1420
710 |
| Total tax payable | 13,390 | 73,130 |
| TDS under sec. 206AA in case where PAN is not furnished by the employee | 26,000 | 1,46,000 |
Example 8
For Assessment Year 2013-14
A. Calculation of Income tax in the case of a retired employee above the age of 80 years and having gross pension of:
iii. Rs. 4,50,000/-,
iv. Rs. 8,00,000/-,
B. What will be the amount of TDS in case of above employees, if PAN is not submitted by them to their DDOs/Offices:
| Particulars | Rupees (i) | Rupees (ii) |
| Gross Pension | 4,50,000 | 8,00,000 |
| Contribution of P.P.F. | 70,000 | 70,000 |
Computation of Total Income and tax payable thereon
| Particulars | Rupees (i) | Rupees (ii) |
| Gross Pension | 4,50,000 | 8,00,000 |
| Less: Deduction U/s 80C | 70,000 | 70,000 |
| Taxable Income | 3,80,000 | 7,30,000 |
| Tax thereon | Nil | 46,000 |
| Add:
(i) Education Cess @ 2%. (ii) Secondary and Higher Education Cess @ 1% |
920
460 |
|
| Total tax payable | Nil | 47,380 |
| TDS under sec. 206AA in case where PAN is not furnished by the employee | Nil | 1,46,000 |
MORE DETAILS VISIT- law.incometaxindia.gov.in-Circular Page
Circular No. 8/2012, dated 5-10-2012
dharamdas says
WHETHER TOTAL AMOUNT OF CHILDREN EDUCATION ALLOWANCE EXEMPT FROM INCOME TAX OR OTHERWISE