Q.1. Mr. A has been employed with PQR Ltd. since 1.5.2004. He retired from his service w.e.f 1.12.2020. The particulars of his income from PQR Ltd. are given below:
Basic salary 6,000 p.m., since 1.1.2020
Dearness Allowance(60% is part of salary for retirement benefits) 1,000 p.m.
Commission 2,000 p.m.
He was provided with rent-free accommodation in Delhi by the company which it had taken on a rent of Rs. 6,000 p.m. He contributed 15% of his salary to a Recognised Provident Fund to which his employer contributed an equal amount.
Besides the above, he received Rs. 70,000 as gratuity, Rs. 24,000 for 120 days leave standing to his credit and Rs. 1,20,000 from Recognised Provident Fund. He was covered under Payment of Gratuity Act and was entitled to 35 days leave for each completed year of service. He was also entitled to pension of Rs. 3000 p.m. w.e.f 1.12.2020. He got 60% of pension commuted w.e.f 1.2.2021 and received a sum of Rs. 1,20,000 as commuted pension.
W.e.f 1.2.2021 he took employment with Y Ltd. on the following terms:
Basic salary 10,000 p.m.
DA (not forming part of salary for retirement benefits) 1,000 p.m.
HRA Rs. 4,000 p.m.
He has been paying rent to his former employer @ Rs. 6,000 p.m. w.e.f 1.12.2020 as he did not vacate the house till date. He invested Rs. 2,400 in National Savings Certificates (VIII Issue) and Rs. 1500 in Public Provident Fund A/C. He paid Rs. 4,000 towards Life Insurance Premium on a policy issued on 5.4.2020 for a sum assured for Rs. 30,000. Compute his Total Income and Tax Liability for the Assessment Year 2021-22.
CAclubindia
