Tax Book 2023

Chapter 30 Solved Past Papers Income Tax Numericals of ICMAP Stage IV - (2003 to 2018)

Flying allowance Rs. 15,000/-

Entertainment allowance Rs. 500/-

Property Income

Mr. A. B. Malik owns a house which is on rent @ Rs. 5,000 per month.

Investment / contribution during the year.

Medical allowance @ 5,000/- No free medical facility of hospitalization or re-imbursement of

medical charges is provided by the employer.

Accommodation is provided by the employer. Mr. A. B. Malik is entitled to house rent allowance @

60% of the minimum of pay scale, had the accommodation not been provided.

A 800cc vehicle is provided by the employer partly for official and partly for private use. The cost of

the vehicle to the employer is Rs. 450,000/-

Conceptual Approach to Taxes _____809

Investment in shares Rs. 50,000.

Solution

Mr. A.B. Malik

Computation of taxable income and tax liability

For the tax year 2023

INCOME FROM SALARY U/S 12: Rs. Rs.

Basic salary (Rs. 19,500 x 12 months) 234,000

Dearness allowance (Rs. 1,500 x 12 months) 18,000

Special relief allowance (Rs. 270,000 x 15%) 35,100

Entertainment allowance 6,000

Medical allowance (Rs. 5,000 x 12 months) 60,000

Less: Exempt upto 10% of basic salary U/C 139 23,400 36,600

Accommodation:

Higher of 60% or 45% of MTS [(Rs. 15,000 x 12) x15%] 108,000

Conveyance (450,000 x 5%) U/R 5 22,500

Mr. A. B. Malik also obtained the concessional loan amounting to Rs. 1,500,000/- from the

employer, mark-up rate of which is 4% per annum (Assume that the benchmark rate for the tax

year, 2023 is 10% per annum).

Higher of 60% or 45% of MTS [(Rs. 15,000 x 12) x15%] 108,000

Conveyance (450,000 x 5%) U/R 5 22,500

Concessional loan from employer

Interest at benchmark rate of 10% 150,000

Less actual interest at 4% 60,000 90,000

550,200

Flying allowance (Note 1) 180,000 180,000

Conceptual Approach to Taxes _____809