Salary incom tex: ILLUSTRATION 13
Mr. Afsar`s annual income is Rs. 2,40,000. His organization additionally offers him clinical allowance Rs. 5,000 according to month. Actual clinical fees of Mr. Afsar at some stage in tax yr 2012 have been Rs. 42,218. Calculate the overall earnings of Mr. Afsar.
Solution
Basic income Rs. 2,40,000 Rs. 60,000
Medical allowance 24.000 36.000
Exempt (10% of primary income) Included in overall earnings
Total earnings Rs. 2,76,000
4. Entertainment
The following is the precis of tax regulations concerning amusement:
(a) Actual amusement expenses incurred with the aid of using worker for amusement on behalf of the business enterprise after which reimbursed to him with the aid of using organization also are now no longer taxable.
(b) If any worker is supplied unfastened tea, espresso etc. on the workplace premises at some stage in the path of his work, not anything can be brought withinside the overall earnings of the worker for tax purposes.
(c) Free or backed meals supplied to an worker of inn or
eating place at some stage in obligation hours.
(d) In all of the final cases, the whole quantity of amusement allowance obtained with the aid of using the worker can be brought in his overall earnings for tax purposes.
5. Loan to Employee
Where a mortgage is made on or after the 1 day of July 2002 with the aid of using an organization to an worker and both no income on mortgage is payable with the aid of using the worker or the fee of income on mortgage is much less than benchmark fee, the quantity. chargeable to tax to the worker below the top income for a tax yr shall consist of an quantity same to
(a) the income on mortgage commuted on the benchmark fee, wherein no income on mortgage is payable with the aid of using the worker, or
(b) the distinction among the quantity of income on mortgage paid with the aid of using the worker in that tax yr and the quantity of income on mortgage. computed on the benchmark fee, because the case may also be.
Notes
(1) Benchmark fee for the tax yr 2012 turned into fourteen percentage according to annum.
(ii) With impact from tax yr 2013 the loans given with the aid of using organization to worker will now no longer be taxable if the quantity is upto Rs. 5,00,000.
(iii) Through any other extrade withinside the Dfa Ho Finance Act, 2012, the most fee of income on such loans has been limited to 10 percentage according to annum. Thus, withinside the tax yr 2013, the income on mortgage exceeding Rs. 5,00,000 can be charged to tax on the fee of 10%.
