AD-FREE CAclubindia and Daily Mobile Updates. Subscribe Now!

Computation of taxable salary

29 November 2019

on the basis of following information compute the taxable income of mr.x under, the head salaries for the assesment year 2019-20 -
rs.per month
Basic salary 12000
dearness allowance 12000
entertainment allowance. 300
hill area compensatory allowance 450
tribal area allowance. 350
his own contribution towards statutory provident fund 1000
employer's contribution 1000
house rent allowance. 4000
interest credited to provident fund 6500

mr.x is officer in forest department of uttar pradesh goverment. he is employed 1100 meter above the sea level. he pays house rent rs. 5000 per. month.

Reply
Follow
Share

2 Replies

Kapadia Pravin (17264 Points)
Replied 29 November 2019

Consider salary as per Form 16 alongwith annexure for break up.

Also cross check with 26AS about TDS.

debora M (BUSINESS DEVELOPMENT MANAGER) (1697 Points)
Replied 29 November 2019

It is essential to gather all the details required to file your income tax returns before computing your taxable income on salary. You will then have to calculate your total taxable income, followed by the calculation of final tax refundable or payable. To calculate the final tax, you will have to use the applicable tax rates before subtracting taxes already paid through advance tax or TCS/TDS from the tax amount due.
The income tax regulations allow individuals to derive income from five sources, viz. Income from Salary, Income from Business or Property, Income from Capital Gains, Income from House Property, and Income from Other Sources. Each income derived by an individual must fall under one of the aforementioned categories.

Following is the procedure for the calculation of taxable income on salary:

Gather your salary slips along with Form 16 for the current fiscal year and add every emolument such as basic salary, HRA, TA, DA, DA on TA, and other reimbursements and allowances that are mentioned in your Form 16 (Part B) and salary slips.
The bonus received during the financial year must be added for the income that is being calculated.
The total is your gross salary, from which you will have to deduct the exempted portion of House Rent Allowance, Transport Allowance (for which the maximum exemption is Rs.19,200 per year), Medical reimbursement (for which the maximum exemption is Rs.15,000), and all other reimbursements provided the actual bills in respect of the expenses incurred.
The result is your net income from salary.