CVP Analysis Gujarati Medium

 

Marginal and Absorption Costing GUJARATI MEDIUM

 

Revision at Last Moment ,Taxation Salary Income

 

STATEMENT OF TAXABLE INCOME UNDER THE HEAD SALARY OF

Mr./Mrs./Ms.---------------------------------

Individual                                                                                                              A.Y. 2020-21

Indian Citizen                                                                                                        P.Y. 2010-20

Ordinary Resident                                                                                                PAN-----------

No.	Particular	Rs.	Rs.
1.	Basic Salary		-------------
2.	Dearness Allowance (DA)		-------------
3.	Entertainment Allowance (EA)		-------------
4.	City  Compensatory Allowance (CCA)		-------------
5.	Medical Allowance (MA)		-------------
6.	Education Allowance (Ed.A)	-------------
	Less: Tax free (exempt) (100x12x2)	-------------	-------------
7.	Hostel Allowance	-------------
8.	Less:  Tax free (exempt) (300x12x2) House Rent Allowance (HRA) Less:  Tax free (exempt)  (Note – 1)	------------- ------------- -------------	-------------   -------------
9.	Tribal area Allowance	-------------
	Less:  Tax free (exempt) (200x12)	-------------	-------------
10.	Transport Allowance	-------------
	Less: Exempt (3200x12)	-------------	------------
11.	Employer’s Contribution to Recognized Provident Fund	-------------
	Less:  Tax free (exempt) 12% of  Salary	-------------	-------------
12.	Interest deposited in Recognized Provident Fund	-------------
	Less:  Tax free (exempt) Up to 9.5%	-------------	-------------
13.	Bonus		-------------
14.	Commission		-------------
15.	Gratuity (Received)	-------------
	Less:  Tax free (exempt) (Note  - 2)	-------------	-------------
16.	Leave Salary received during the service		-------------
17.	Un-commuted Pension		-------------
18.	Commuted Pension	-------------
	Less:  Tax free (exempt) (Note – 3)	-------------	-------------
19.	Rent Free Accommodation (Note – 4)		-------------
20.	Domestic servant provided by employer (Note -5)		-------------
21.	Education facilities in Employer’s institution	-------------
	Less:  Tax free (exempt) up to 12000 per child	-------------	------------
22.	Medical facilities provided by employer	-------------
	Less:  Tax free (exempt) up to 15000 Note - 6)	-------------	-------------
23.	Motor Car facilities (Only specified employee) (Note – 7)		------------
24.	Transfer of movable asset (Note – 8 )
25.	Use of movable assets (Taxable 10% p.a. of original cost)
	Gross salary		------------
	Less: Deduction: Standard deduction	50000
	Entertainment  Allowance Deduction (Only for Govt. employee)	-------------
	Professional Tax paid	-------------	-------------
	Taxable Salary		-------------

 

Note – 1

House Rent Allowance:

Minimum of the following is exempt

1. Actual HRA Received
2. Actual rent paid  -  10% of salary
3. 50% of salary (If house situated in Delhi, Mumbai, Kolkata and Chennai)

OR

      40% of salary (If house situated in any other city)

Salary = Basic Salary + DA (If it is taken into consideration for retirement benefit and commission on sale made by employee)

Note - 2

Gratuity:

Gratuity under 1972	Other
Minimum of the following is exempt	Minimum of the following is exempt
1. Actual Amount Received                   --------	1. Actual Amount Received                    --------
2. Maximum amount                     `  20,00,000	2. Maximum amount                      `  20,00,000
3. Last month salary x 15/26 x Completed year of service (More than 6 month = 1 year and Less than 6 month ignore)	Avg.10 month salary x ½ x Completed year of service (month ignore)
Salary = Basic salary only	Salary = Basic Salary + DA ( If it is taken into consideration for retirement benefit and commission on sale made by employee)

Note – 3

Commuted pension:

1. If gratuity received 1/3  of the total pension is exempt
2. If gratuity not received ½ pension is exempt

After receiving commuted pension monthly pension is reduce up to the percentage of commuted pension.

Note – 4

Rent Free Accommodation:

Salary as per BABC

B = Basic Salary

A = All taxable Allowance except DA

B = Bonus

C = Commission

(DA is including in salary if it is taken into consideration for retirement benefit.)

1. Value of Unfurnished house:

If the accommodation (House) is owned by employer.

• 7.5% of salary if house is situated in a city having population less than 10 lakhs.
• 10% of salary if house is situated in a city having population more than 10 lakhs and less than 25 lakhs.
• 15% of salary if house is situated in a city having population more than 25 lakhs.

      If the accommodation (House) is not owned by employer. (Rented house)

·        The actual amount of rent paid by the employer or 15% of salary which is less.

2. Value of furnished house.

Value as decided in above 1                                                                         ------------

+10% of furniture provided by employer p.a.                                              ------------

+ Rent paid by employer for rented furniture if provided                            ------------

    Value of furnished house                                                                          ------------

Less: amount deducted from employee’s salary for this perquisite             ------------

Taxable value of house                                                                                 ------------

 

Note – 5

Domestic servants (Sweeper, watchman, and any other household servant):

·        For Specified employee fully taxable.

·        Gardner facility is taxable if rent free house provided by employer is not owned by employer and if rent free house is not provided by employer. If rent free house provided by employer is owned by the employer than Gardner facility is exempt in the hand of employee.

Note – 6

Medical facilities:

·        Free medical facilities provided to an employee or any member of his family in any hospital maintained by the employer is completely exempt.

·        Medical reimbursement by the employer, of expenditure actually incurred by the employee in any private hospital is exempt upto 15000 in a year.

·        However, a bill in excess of Rs.15000 prepared in employer’s name is taxable for specified employees only.

 

Note – 7

Motor car facilities:

·        It is taxable in case of only those specified employees whose employers are not liable to fringe benefit tax (FBT).

·        If the car is used only for official purposes nothing is taxable.

·        If the car is owned or hire by employee.

If the car is used only for private purposes: Actual expenses incurred by the Employer                                           ---------- Less: Amount recovered from Employee                                           ---------- Taxable value                                     ---------- Negative amount ignored

If the car is partly used for official purposes and partly for private purposes: Actual expenses incurred by the Employer                                       ---------- Standard amount                            --------- Taxable value                                ---------- Negative amount ignored

Standard amount means: `1800 per month where the cubic capacity of the engine does not exceed 1.6 liters or `2400 per month if cubic capacity exceeds 1.6 liters. + `900 p.m. if chauffeur (driver) is provided.

·        If the car is owned or hire by employer.

If the car is used only for private purposes: Expenditure incurred by the employer in the form of wear and tears (@10%p.a. of Cost of Car) Or hire charges payable + Chauffeur’s (driver) salary if payable by the employer Less amount recovered from employee. Negative amount ignored.

If the car is partly used for official purposes and partly for private purposes:   Cubic capacity of engine   Maintenance and running expenses: Met or reimbursed by employer Met by employee himself 1.6 liters (1600 C.C.) Or Less `1800 p.m. (+ `900 p.m. if chauffeur is provided ) `600 p.m. (+ `900 p.m. if chauffeur is provided ) More than 1.6 liters (1600C.C.) `2400 p.m. (+ `900 p.m. if chauffeur is provided ) `900 p.m. (+`900 p.m. if chauffeur is provided ) Nothing is deductible in respect of any amount recovered from employee.

 

 

 

Specified Employee:

(1)     An employee of a company who is also a director (whether full time or part time) in it.

(2)     An employee of a company who has a substantial interest in the company.

(3)     An employee whose salary income is more than ` 50,000

Note: As the limit of monetary salary is only ` 50,000 per annum (i.e. ` 4,167 per month) almost all employees drawing more than ` 4,167 become specified employees so this provision has become redundant.

                                                                                                                                                   

Note – 8:

Transfer of movable asset:

            The value of benefit arising to the employee from the transfer of any movable asset owned by the employer is to determine as under:

Original cost of the employer                                                                                         ---------

 Less depreciation at specified rate for each completed year of its use                ---------

 Less: Transfer price (Sale value)                                                                                   ---------

Taxable Value                                                                                                              ---------

Specified rate of Depreciation:

• Computers and electronic items: @ 50% P.a. as per WDV method
• Motor Cars: @ 20% P.a. as per WDV method
• Any other assets: @ 10% p.a. as per SLM method

Note: Electronic items includes Data storage equipments, Degital diaries and Printers’ does not include domestic appliance like washing machine, hot plate, microvave oven etc.

 

Deduction under section 80 C

·        Maximum limit of deduction Rs.150000 allowed from the total gross income of an assessee.

1.      Premium paid by the assessee for insurance on his own life or on the life of his wife or any child. Upto 20% of the policy value. (LIP)

2.      Employee’s contribution to Statutory Provident fund. (SPF)

3.      Employee’s contribution to Public Provident fund. (PPF)

4.      Employee’s contribution to Recognised Provident fund. (RPF)

5.      Contribution towards Unit linked Insurance Plan. (ULIP)

6.      Contribution towards LIC Mutual Fund of LIC.

7.      Contribution towards Approved Superannuation Fund.

8.      Investment in Post Office National Savings Certificates (PONSC) Series VIII

9.      Contribution towards units of notified mutual fund (UTI).

10.  Investment in NABARD.

11.  Amount deposited in 5 yrs. Time Deposit Scheme in post office.

12.  Amount deposited under senior citizens savings scheme.

13.  Any sum invested in equity shares and debentures of a public company, engaged in infrastructure including power sector.

14.  Contribution in the notified annuity scheme of LIC e.g. New Jeevan Dhara, New Jeevan Akshay, I  II   III.

15.  Repayment of housing loan.   

16.  Tuition fee for the education of his child.