Annexure I

For assessment year 2001-2002

Example 1

Calculation of income-tax in the case of an employee having
gross salary income

    (i)  upto Rs. 1,00,000.

   (ii)  More than Rs. 1,00,000 but less than Rs. 5,00,000 and

  (iii)  Exceeding Rs. 5,00,000

Particulars

(Rupees)

(i)

(Rupees)

(ii)

(Rupees)

(iii)

Gross Salary Income

1,00,000

5,00,000

6,00,000

(including allowances)

 

 

 

Contribution to G.P.F.

10,000

20,000

30,000

C.G.E.I.S.

920

LIC Premium Paid

5,000

5,000

10,000

C.T.D.

2,500

36,000

N.S.C.

2,000

5,000

P.P.F.

5,000

Contribution to Mutual Fund

10,000

 

Computation of total income and tax payable thereon

1.

Gross Salary

1,00,000

 

5,00,000

 

6,00,000

 

2.

Less : Standard deduction under section 16

25,000

 

20,000

 

Nil

 

 

Taxable Income

75,000

 

4,80,000

 

6,00,000

 

 

Tax thereon

4,000

 

1,18,000

 

1,54,000

 

 

Less : Tax rebate under section 88 (20% on Rs. ......)

 

 

 

 

 

 

 

GPF

10,000

 

20,000

 

30,000

 

 

CGEIS

920

 

 

 

 

LIC Premium Paid

5,000

 

5,000

 

10,000

 

 

C.T.D.

 

2,500

 

36,000

 

 

N.S.C.

2,000

 

5,000

 

 

 

P.P.F.

 

5,000

 

 

 

Mutual

 

10,000

 

 

 

 

17,920

 

47,500

 

76,000

 

 

 

i.e. 3,584

3,584

i.e. 9,500

9,500

Restricted

12,000

 

 

 

 

 

 

to 12,000

 

 

Income-tax payable

 

416

 

1,08,500

 

1,42,000

 

Add : Surcharge

@ 10%

42

@ 15%

16,275

@ 15%

21,300

 

Total Tax Payable

 

458

 

1,24,775

 

1,63,300

Note : Where a person makes investment as per section 88(2)(i) to 88(2)(xv) the qualifying amount is Rs. 60,000. However whereas further investment of Rs. 20,000 and above is made in the shares, debentures or units of Mutual Funds as per section 88(2)(xvi) and (xvii) the qualifying amount becomes Rs. 80,000 and a maximum rebate of Rs. 16,000 (20% of 80,000) is allowable.

Example 2

Calculation of income-tax in the case of assessee
having handi­capped dependent

 

Particulars

(Rupees)

1.

Gross salary

3,20,000

2.

Amount spent on treatment of dependent who is handicapped

7,000

3.

Amount paid to LIC with regard to annuity for the maintenance of handicapped dependent

40,000

4.

G.P.F. contribution

25,000

5.

LIP paid

10,000

Computation of Tax

 

 

1.

Gross Salary

 

3,20,000

2.

Less : Standard deduction

 

20,000

 

 

 

3,00,000

 

Less : Deduction under section 80DD(1)

 

 

 

(Restricted to Rs. 40,000 only)

 

40,000

 

Taxable Income

 

2,60,000

 

 

Rs.

 

 

Income-tax thereon

 

52,000

 

Rebate under section 88

 

 

 

GPF

25,000

 

 

LIP

10,000

 

 

Total

35,000

 

Particulars

 

Rebate @ 20% on Rs. 35,000

 

7,000

 

Tax payable

 

45,000

 

Add : Surcharge @ 15%

 

6,750

 

Total Tax payable

 

51,750

 

Example 3

Calculation of income-tax in the case of an employee where Medi­cal
Treatment expenditure was borne by the employer

 

Particulars

(Rupees)

1.

Gross salary

3,00,000

2.

Medical reimbursement by employer on the treatment of self and dependent family member

30,000

3.

Contribution to GPF

20,000

4.

LIP

20,000

5.

Repayment of House Building Advance

25,000

6.

Investment in infrastructure Bond under section 88(xvi)

20,000

Computation of Tax

Gross Salary

 

3,00,000

Add : Perquisite in respect of reimbursement of Medical Expenses in excess of Rs. 15,000 in view of section 17(2)(v)

 

15,000

 

 

3,15,000

Less : Standard deduction

 

20,000

Taxable income

 

2,95,000

Tax thereon

 

62,500

Rebate under section 88

 

 

GPF

20,000

 

LIC

20,000

 

Repayment of House Building

20,000

 

Advance (Maximum) Investment in Infrastructural Bonds under section 88(xvi)

20,000

 

Total

80,000

 

Rebate @ 20% on Rs. 80,000

 

16,000

Tax payable

 

46,500

Add : Surcharge @ 15%

 

6,975

Total Tax payable

 

53,475

Notes : Repayment of house building advance is restricted to Rs. 20,000 under section 88(xv) of Income-tax Act, 1961.

(ii) Total qualifying amount for rebate is Rs. 60,000 only (excluding the investments made in infrastructure bonds etc. as per section 88(2)(xvi) and (xvii) of the Act.)

Example 4

Illustrating calculation of house rent allowance under section 10(13A) in respect of residential accommodation situated in Delhi

 

Particulars

 

(Rupees)

1.

Salary

 

49,500

2.

Dearness Allowance

 

43,680

3.

House Rent allowance

 

9,600

4.

C.C.A.

 

1,200

5.

House rent paid

 

18,000

6.

General Provident Fund

 

24,000

7.

Life Insurance Premium

 

2,500

8.

Cumulative Time Deposit

 

2,400

9.

Contribution to Mutual Fund

 

12,000

 

Computation of Total Income and tax payable  thereon for Assessment year 2001-2002

 

 

 

 

 

 

1.

Salary + D.A. + C.C.A.

 

94,380

 

House rent allowance

 

9,600

2.

Total Salary Income

 

1,03,980

3.

Less : House Rent allowance exempt under section 10(13A): Least of

 

 

 

  (a)  Actual amount of HRA received = 9,600

 

 

 

  (b)  Expenditure on rent in excess of 10% of salary (including D.A. as presumed that D.A. is taken for retirement benefit) (18000 — 9,318=8,682)

 

8,682

 

   (c)  40% of Salary (+Basic) Rs. 46,590

 

95,298

 

Less : Standard deduction under section 16(i) @ 33.33% or 25,000 whichever is less

 

25,000

 

Total Income (rounded off)

 

70,300

 

Tax on Total Income

 

3,060

 

Rebate under section 88

Rs.

 

 

GPF

24,000

 

 

LIP

2,500

 

 

CTD

2,400

 

 

Contribution to Mutual Fund

10,000

 

 

39,900 @ 20%

7,980

 

Tax on Total Income

 

3,060

 

Less : Tax rebate restricted to

 

3,060

 

Tax payable

 

Nil

Note: Tax rebate is restricted to tax on total income.

Example 5

Illustrating valuation of perquisites and calculation of tax in the
case of an employee of a private company, posted at Delhi

 

Particulars

(Rupees)

1.

Salary

1,08,000

2.

Bonus

12,000

3.

Free gas, electricity, water etc. (actual bills paid by Company)

6,000

4.

Furnished flat provided to the employee for which actual rent paid by the Company

78,000

5.

Rent received from the employee

12,000

6.

Furniture at cost (including television, fridge, washing machine and air-conditioner)

50,000

7.

Subscription to Mutual Fund [Section 88(2)(xvii)]

12,000

8.

Life Insurance Premium

3,000

9.

Subscription to NSC (VIII) Issue

18,000

10.

Contribution to Recognised PF

24,000

11.

Contribution to Infrastructure bonds under section 88(2)(xvi)

15,000

Computation of total income and tax payable thereon

1.

Salary

 

1,08,000

 

2.

Bonus

 

12,000

 

3.

Total of Salary

 

 

1,20,000

4.

Valuation of perquisites:

 

 

 

 

 

 

Rs.

 

 

  (a)  Furnished flat at concessional rent

 

 

 

 

(please see section 17(2) of the IT Act)

 

 

 

 

@ 10% of salary including bonus

 

12,000

 

 

  (b)  Add excess of (FRV) over 60% of salary

 

 

 

 

including bonus i.e. Rs. (78,000 — 72,000=6,000)

 

6,000

 

 

   (c)  Add perquisite of the furniture (10% of

 

 

 

 

cost i.e. 10% of Rs. 50,000)

 

5,000

 

 

 

 

23,000

 

 

Less : Rent recovered by Co.

 

12,000

 

 

 

 

 

11,000

 

 

 

 

1,31,000

 

  (d)  Add : Perquisite of free gas, electricity etc.

 

 

6,000

 

Gross total Income

 

 

1,37,000

 

Less : Standard deduction under section 16(i)

 

 

20,000

 

 

 

 

1,17,000

 

Tax on Total Income of Rs. 1,17,000

 

 

12,400

 

Tax Rebate under section 88

 

 

 

 

Provident Fund

24,000

 

 

 

Subscription to NSC VIII issue

18,000

 

 

 

 

Particulars

(Rs.)

 

(Rupees)

 

LIP

3,000

 

 

 

Subscription to Mutual Fund

12,000

 

 

 

Contribution to Infrastructural Bond

15,000

 

 

 

 

72,000

 

 

 

Tax Rebate @ 20%

14,400

 

 

 

Tax on Total Income

 

12,400

 

 

Tax rebate (restricted)

 

12,400

 

 

Tax Payable

 

Nil

 

 

Example 6

Illustrating valuation of perquisite and calculation of tax in the case
of an employee of a Private Company posted at Delhi and repaying
Housing Building Loan

 

Particulars

(Rs.)

1.

Salary

1,18,000

2.

Dearness allowance

36,000

3.

House Rent Allowance

12,000

4.

Special Duties allowance

2,400

5.

Provident Fund

20,000

6.

L.I.P.

10,000

7.

Deposit in NSC VIII Issue

20,000

8.

Rent paid by the employee for

 

 

house hired by him

24,000

9.

Repayment of House Building loan

 

 

taken by the employee from LIC

12,000

10.

Subscription to eligible issue of capital

 

 

of a Co. approved under section 88(xvi)

5,000

11.

Subscription to units of mutual fund

 

 

under section 88(xvii)

15,000

 

Computation of total income and tax payable thereon

1.

Gross Salary

 

 

1,68,400

 

Less : House rent allowance exempt under

 

 

 

 

 section 10(13A)

 

 

 

 

  (a)  Actual amount of HRA received

12,000

 

 

 

  (b)  Expenditure on rent in excess of 10% of

 

 

 

 

salary (including D.A. as personal D.A.

 

 

 

 

is included for retirement benefits 8,600)

8,600

 

 

 

   (c)  50% of salary (including D.A.)

77,000

 

(-) 8,600

 

Total Salary Income

 

 

1,59,800

 

Less : Standard deduction

 

 

20,000

 

Total Taxable Income

 

 

1,39,800

 

Tax on total income

 

 

16,960

      

 

Particulars

 

 

 

 

Tax rebate under section 88

 

 

 

 

   (i)  Provident Fund

20,000

 

 

 

  (ii)  LIP

10,000

 

 

 

(iii)  NSC VIII Issue

20,000

*Restricted

 

 

  (iv)  Repayment of HBA

12,000

to Rs. 60,000

 

 

   (v)  Subscription to eligible issue of capital of a Co. approved under section 88(xvi)

5,000

 

 

 

  (vi)  Subscription to units of mutual fund under section 88(xvii)

15,000

 

 

 

 

80,000

@ 20%

16,000

 

Net Tax Payable

 

 

960

 

Add : Surcharge @ 10%

 

 

96

 

Total Tax Payable

 

 

1,056

 

Example 7

Income-tax calculation in the case of an employee whose Medical
Treatment Expenditure was borne by the employer

      

 

Particulars

(Rs.)

1.

Gross Annual Salary

1,95,000

2.

Medical Expenditure directly paid by employer to private practitioner

25,000

3.

Medical Expenditure directly paid to hospital approved by Chief Commissioner of Income-tax

50,000

4.

Reimbursement of medical expenses incurred by the employee in a hospital approved by Chief Commissioner

10,000

5.

Expenditure on Travelling abroad (including that of attendent)

1,00,000

6.

Expenditure incurred on stay and treatment abroad

1,50,000

7.

Out of (6) amount permitted by Reserve Bank of India

1,00,000

8.

Contribution to PF

12,000

9.

LIC Premium paid

5,000

10.

Contribution to PPF

3,000

11.

Purchase of NSC (VIII)

10,000

12.

Repayment of Principal of HBA*

12,000

13.

Subscription to UTI’s MEP

8,000

Computation of total income and tax payable thereon

Gross Salary

 

1,95,000

Add

 

 

-

Medical expenditure directly paid by Employer to a private practitioner is not to be added as perquisite only to the extent of Rs. 15,000 in view of proviso (v) to sub-clause (v) of clause (2) of section 17. Hence the balance to be added back as perquisite.

 

10,000

-

Medical expenditure directly paid by employer to a hospital approved by Chief Commissioner and reimbursement of such expendi­ture in respect of any ailment as prescribed in Notification No. 9107, dated 7-10-1992 is exempt under section 17(2)(v)(ii). Hence, there will be no perquisite in respect of amounts of Rs. 50,000 and Rs.10,000 as mentioned in item No. 3 and item No. 4 respec­tively.

 

 

-

Expenditure on travelling for the purpose of treatment abroad (including expenditure on travelling and of one attendent). This is not to be available in this case as assessee’s gross total income exceeds Rs. 2 lakh. (Salary Rs. 1,95,000 + Rs. 15,000 the perquisite in respect of treatment from private practitioner). Hence the same is to be added back in view of condition (B) to sub-clause (vi) of clause (2) of section 17.

 

1,00,000

-

Medical Expenditure on treatment abroad is to be exempt only to the extent approved by RBI. Hence out of Rs. 1.5 lakhs spent only Rs. 1 lakh to be exempt and the balance of Rs. 50,000 are liable to be added back. In view of condition (A) to sub-clause (vi) of clause (2) of section 17

 

50,000

 

Gross Total Income

 

3,55,000

 

Less : Standard Deduction

 

20,000

 

Net Taxable Income

 

3,35,000

 

Tax thereon

 

74,500

 

Rebate under section 88

 

 

 

 

Rs.

 

 

P.F.

12,000

 

 

L.I.C.

5,000

 

 

P.P.F.

3,000

 

 

N.S.C.

10,000

 

 

U.T.I.(MEP)

8,000

 

 

H.B.A.

 

12,000

 

 

Total

50,000

 

Admissible @ 20%

 

10,000

Tax payable

 

64,500

Add : Surcharge @ 15%

 

9,675

Total Tax Payable

 

74,175

Note : *In respect of repayment of loans taken for the purchase or construction of a new residential house property the construction of which does not get completed by the end of the financial year 2001-2002, no tax rebate in respect of these items shall be admissible to the employees.

Example 8

Income-tax calculation in the case of an employee who claims loss
under the head “Income from house property”

 

Particulars

(Rs.)

1.

Gross Salary

4,00,000

2.

Housing Loan repaid (principal)

30,000

3.

Interest payable on housing loan (Loan taken after 1-4-1999)

90,000

4.

Donation paid to National Children’s Fund

5,000

5.

N.S.C. purchased

10,000

6.

G.P.F.

20,000

 

 

Computation of taxable Income and Tax thereon

(Rs.)

1.

Salary Income

 

 

 

Gross Salary

 

4,00,000

 

Less : Standard deduction

 

20,000

 

Taxable Salary

 

3,80,000

2.

Income from house property

Rs.

 

 

Annual value

Nil

 

 

Interest payable on loan under section 24

90,000

 

 

Loss from house property

 

(-) 90,000

 

Gross Total Income

 

2,90,000

 

Less : Deduction under section 80G

 

 

 

50% of Rs. 5,000

 

2,500

 

Net Taxable Income

 

2,87,500

 

Tax thereon

 

41,250

 

Less : Rebate under section 88

 

 

 

G.P.F.

20,000

 

 

N.S.C.

10,000

 

 

Housing Loan repaid (maximum)

20,000

 

 

Total

50,000

 

 

Rebate @ 20% of Rs. 50,000

 

10,000

 

Tax payable

 

31,250

 

Add : Surcharge @ 15%

 

4,688

 

Total Tax payable

 

35,938

 

Example 9

Income-tax calculation in the case of a women assessee who
is less than age of 65 years

Particulars

 

(Rs.)

Gross Salary

 

1,20,000

G.P.F.

 

10,000

N.S.C. purchased

 

10,000

Computation of Taxable Income and Tax thereon

 

 

Gross Salary

 

1,20,000

Less : Standard deduction under section 16(i)

 

20,000

Taxable Income

 

1,00,000

Tax thereon

 

9,000

Less : Rebate under section 88

Rs.

 

G.P.F.

10,000

 

N.S.C.

10,000

 

Total

20,000

 

Rebate under section 88 @ 20% of Rs. 20,000

4,000

 

Rebate under section 88C (Being women)

5,000

 

Total Rebate

9,000

9,000

Tax payable

 

Nil

Note : In the case of a women assessee who is of 65 years’ age or more, she will be entitled to rebate only under section 88B of the Act meant for senior citizens and not under section 88C of the Act.

Annexure II

Form for sending particulars of income under section 192(2B) for
the year ending 31st March, 2000

1.

Name and address of the employee

 

2.

Permanent Account Number

 

3.

Residential status

 

4.

Particulars of income under any head of income other than “Salaries” (not being a loss under any such head other than the loss under the head “Income from house property”) received in the financial year

 

   (i)  Income from house property

.....……….

 

(in case of loss, enclose computation thereof)

 

 

  (ii)  Profits and gains of business or profession

.....……….

 

(iii)  Capital gains

.....……….

 

  (iv)  Income from other sources

 

 

   (a)   Dividends

 

 

   (b)   Interest

 

 

   (c)  Other incomes (specify)

 

 

Total

.....……….

5.

Aggregate of sub-items (i) to (iv) of item 4

 

6.

Tax deducted at source (enclose certificates) issued under section 203

 

 

Place ........................................

 

Date .........................................

...................................

 

Signature of the employee

 

Verification

I,................…………………………………………………………………………….....……..........................., do hereby declare that what is stated above is true to the best of my knowledge and belief.

Verified today, the.......... day of..... 2000.

Place ........................................

 

Date .........................................

...................................

 

Signature of the employee

Annexure III

Form No. 16 : Certificate under section 203 of the Income-tax Act, 1961 for tax deducted at source from income chargeable under the head “Salaries” - See [1991] 55 Taxman 21 (St.).

Annexure IV

Rule 2BB : Insertion of rule 2BB - Income-tax (Eighth Amendment) Rules, 1995 - See [1995] 81 Taxman 18 (St.).

Annexure V

Rule 2BB : Amendment in the Table of sub-rule (2) of rule 2BB - Income-tax (Third Amendment) Rules, 2000 - See [2000] 109 Taxman 421 (St.).

Annexure VI

Rule 2BB : Amendment in rule 2BB - Income-tax (Seventh Amendment) Rules, 1998 - See [1998] 98 Taxman 31 (St.).

Annexure VII

Form No. 10BA : Declaration to be filed by the assessee claiming deduction under section 80GG - Income-tax (Nineteenth Amendment) Rules, 1998 - See [1998] 100 Taxman 110 (St.).