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

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.

Provide

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.

 

 

Replies (2)

My answer is as below:-

a) Rs. 3.50 lacs shall be disallowed from salary u/s 40A read with Sec 36(1)(iva) &

b) Total Income of Mr. X will be Rs. 2,55,200

a. Amt disallowed Rs 5.6L{14L act cont.-10%*(70L+14L DA)} b. Rs 2,55,200

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