Salary income tax: ILLUSTRATION 29

Mr. Shahbaz has received the following income for the year ended 30th June 2012 Calculate his tax payable.

Basic salary Rs. 1,00,000 PM

Rs. 12,00,000

House allowance

60,000

Entertainment allowance

Solution

Mr. Shahbaz

Tax Year: 2012

Tax Year Ended: 30th June 2012 Residential Status: Resident

Computation of Tax Payable

Basic salary @Rs. 1,00,000 PM House allowance (fully taxable)

Entertainment allowance

Rs. 12,00,000 60,000

Taxable income 14.60,000

Computation of Tax (see note)

Tax on amount exceeding Rs. 10,000 @ 40%

(Rs. 14,60,000-14,50,000) Lesser amount

Note:

As per rule of marginal relief the tax payable Dfa Ho should as maximum on the last slab plus tax on 40% of the amount

1.82.500

OR 1.63,500
1.63.500 be calculated

which exceeds the last slab.