The following are the particulars of Mr. Priyan who is employed in Chennai
Basic Salary Rs 4000 p.m.
DA (60% of Basic Salary)
CCA Rs 250 p.m.
He and his employer both contribute 14% of salary to recognized provident fund
Interest credited on accumulated balance of RPF 10% Rs.40,000
He has been provided with a rent-free house in Chennai (population above 25 lakhs). He is provided with furniture costing Rs.30,000 in the house..
He is provided a motor car (1.8 litre) with driver which is used for both official and personal purposes,
During the year he paid professional tax Rs.550.
Education allowances Rs.150 p.m. (Per Child). He has two children, 100x2
Calculate Salary Income.
To calculate Salary Income, we need to consider the various components of Mr. Priyan's income.
1. Basic Salary: Rs 4000 per month = Rs 48,000 per year
2. DA (60% of Basic Salary) = 60/100 * Rs 48,000 = Rs 28,800 per year
3. CCA (City Compensatory Allowance): Rs 250 per month = Rs 3,000 per year
4. Contribution to Provident Fund: Both employee and employer contribute 14% of salary, so total contribution = 14/100 * (Rs 48,000 + Rs 28,800) = Rs 10,320 per year
5. Interest credited on accumulated balance of RPF: Rs 40,000
6. Value of rent-free house in Chennai: Not taxable
7. Furniture in the house: Not taxable
8. Motor car with driver: The perquisite value of motor car is based on its cubic capacity. For a motor car with an engine capacity exceeding 1.6 liters but not exceeding 2.0 liters, the perquisite value is Rs 2,400 per month. So, the annual perquisite value for Mr. Priyan would be Rs 2,400 * 12 = Rs 28,800.
9. Professional tax paid: Rs 550 per year
10. Education allowances: Rs 150 per child per month = Rs 150 * 12 * 2 = Rs 3,600 per year
Now, let's calculate the Salary Income:
Salary Income = Basic Salary + DA + CCA + Interest on RPF - Contribution to RPF - Motor Car perquisite - Professional tax - Education allowances
= Rs 48,000 + Rs 28,800 + Rs 3,000 + Rs 40,000 - Rs 10,320 - Rs 28,800 - Rs 550 - Rs 3,600
= Rs 76,530
Therefore, Mr. Priyan's Salary Income is Rs 76,530.