Income tax Calculation Example 4 for Salary Employees 2023-24

Example 4 

For Assessment Year 2023-24

Illustrative calculation of House Rent Allowance U/s 10 (13A) in respect of residential accommodation situated in Delhi in case of an employee below the age of sixty years (With valid PAN furnished to employer).

S.No.	Particulars	Rupees
1	Salary	3.50,000
2	Dearness Allowance	2,00,000
3	House Rent Allowance	1,40,000
4	House rent paid	1,44,000
5	General Provident Fund	36,000
6	Life Insurance Premium	4,000
7	Subscription to Unit-Linked Insurance Plan	50,000

Computation of total income and tax payable thereon

S.No.	Particulars	Rupees
I	Salary + Dearness Allowance + House Rent Allowance 3,50,000+2,00,000+1,40,000 = 6,90,000	7.40,000
2	Total Salary Income	7,40,000
3	Less: Standard deduction u/s 16(ia)	50,000
4	Less: House Rent allowance exempt U/s 10(13A): least ta (a).Actual amount of HRA received= 1,40,000 (b).Expenditure of rent in excess of 10% of salary (including D.A. presuming that D.A. is taken for retirement benefit) (1,44,000-55,000) 89,000 (c).50% of Salary(Basic+ DA) – 2,75,000 [Bombay/Kolkata/Delhi/Chennai] or 40% of salary (Basic + DA) in case of other cities	89
	Gross Total Income	601,000
	Less: Deduction U/s 80C (i)GPF Rs.36,000/- (ii)LIC Rs. 4,000 (iii)Investment in Unit-Linked Insurance Plan Rs.50,000/- Total =Rs.90.000/-	90
5	Total Income	5,11,000
	Tax payable	14700
	Add: Health & Education Cess @ 4%.	588
	Total Income Tax pay able	15288
	Rounded off to	15290

or Aadhaar number, as the case may be. # It may be noted that tax liability may not be the same in case the taxpayer opts for concessional tax regime under section 115BAC of the Act.