Imp for ca final [salary income & deduction u/s 36(1)(iva)]

Arvind Sharma (ACA) (1432 Points)

23 April 2012  

Dear All,

Please provide the solution for the following query:-

X Ltd. contributes 20% of basic salary to the account of each employee under a pension scheme specified u/s 80CCD. Total salary debited to profit and loss account is Rs. 70 lacs. The company also has policy to pay dearness allowance @ 40%, 50% of which form part of retirement benefit. Mr. A, an employee, received Rs. 20,000 pm as basic salary.


a) Deduction available to X Ltd. and

b) Total Income of Mr. A, if Mr. A also contributes 20% of his basic salary to the scheme and has other investment by Rs. 80,000 eligible for 80C deduction.