Income tax Calculation Example 4 for Salary Employees 2023-24

Income tax Calculation Example 4 For Assessment Year 2023-24 – Example 4

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.ParticularsRupees
1Salary3.50,000
2Dearness Allowance2,00,000
3House Rent Allowance1,40,000
4House rent paid1,44,000
5General Provident Fund36,000
6Life Insurance Premium4,000
7Subscription to Unit-Linked Insurance Plan50,000

Computation of total income and tax payable thereon

S.No.ParticularsRupees
ISalary + Dearness Allowance + House Rent Allowance
3,50,000+2,00,000+1,40,000 = 6,90,000
7.40,000
2Total Salary Income7,40,000
3Less: Standard deduction u/s 16(ia)50,000
4Less: 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 Income601,000
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
5Total Income5,11,000
Tax payable14700
Add:
Health & Education Cess @ 4%.
588
Total Income Tax pay able15288
Rounded off to15290

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.

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