Income from head salary

taxable salary will be

2,40,000 + 3,000+21,600 -100*2*12-40,000 = 2,22200

@ Pranav 

the taxable part of Children Education Allowance is?

restricted to 2,000 for 2 children not 2,400?

yes we can also calculate eduction allowance exemption by 3000/3/12*2*12

A). Basic Salary ( 20,000 ×12 ) = Rs. 2,40,000
B).Children Education Allowance = Rs. 3,000
Less : Exempted u/s 10(14)
Rs. 100 p.m. per child upto 2 children = (2,400)

Taxable CEA =. Rs. 600

C). Transport Allowance (Fully Taxable) = Rs.21,600
( 1,800 × 12 = 21,600; deduction u/s 10(14) of Rs. 1,600 withdrawn by Finance Act 2018 ).

GROSS SALARY = Rs. 2,62,200
( A+B+C)

Less : Standard Deduction U/s 16(ia) = 40,000

NET SALARY = Rs. 2,22,200/-

NOTE:

1). Children Education Allowance is Exempted upto Rs. 100 p.m. per child upto a maximum of 2 children. Hence exemption u/s 10(14) will be restricted for 2 children only i.e. Rs. 100×12×2 = Rs. 2,400/-

Understood ???

I also had the same amount of taxable part of Children education allowance(CEA) i.e 600.

but most of us restricted the exempted part to 2,000 being the CEA received lower than exemption allowed if taken 1,000  for each children( which is not mentioned in the question)

Still, thank you very much @ Shivam for you time and nice presentation.

 

Yes you can assume that the CEA received for each children is Rs. 1,000. Then you can restrict the Exemption available u/s 10(14) to Rs. 2000 ( i.e. Rs. 1000 per child upto to maximum of 2 ) since exemption cannot exceed income.

Both the methods are correct. Now it is upon you which assumption you go for since the question is silent regarding the same.

Always mention your assumption in the form of foot note to your answer.

Warm Regards.

Great, thanks a lot