Can somebody plz help me with this question. It's from the chapter Salaries:
Q} Mr Arvind is working in Indian Railways and apart frm basic salary, he is paid the following allowances:
Entertainment allowance: Rs 1200 p.m
Uniform allowance Rs 800 p.m. Actual amount spent Rs 500 p.m.
Conveyance allowance Rs 2000 p.m. Spent for office purposes Rs 1200 p.m.
Special allowance to meet personal expenses while on duty Rs 5000 p.m.
Education and hostel expenditure allowance Rs 500 p.m. He has 2 children studying in school by staying in hostel.
Determine the taxable amount of the above allowances.
Answer given is Rs 40600. what i want to know is mainly the edu allowance part. u/s 10(14) it is given that education allowance would be exempt upto Rs100 per child per month for a max of 2 children and hostel allowance exemptwill be upto Rs 300 pm per child upto a max of 2 children. so it should be
EDu allowance recd: 500 x 2 children x 12 m = 12000
less: exempt u/s 10(14): (100 + 300) x 2 x 12 = (9600)
2400
But they have taken the entire 12000 as exempt otherwise the answer doesn't come to 40600. plz tell me if i m going wrong somewhere or is there some error in the final answer given. the entire soln that i got is:
Ent allowance 1200 x 12 : 14400
(-) exempt (least of):
1) Rs 5000
2) 1/5 of sal (not given)
3) Actual amt recd (5000) 9400
Uniform allowance – 800 x 12 : 9600
(-) exempt to the extent spent = (6000) 3600
Conveyance 2000 x 12 : 24000
- exempt 1200 x 12: (14400) 9600
Special allowance 5000 x 12 = 60000
(-) least of 60000 x 70% = 42000
Or
6000 x 12 = 72000 (42000) 18000
Edu n hostel allowance 500 x 2 x 12 = 12000
(-) exempt: 400 x 2 x 12 (9600) 2400
43000
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