For Allowances,we need to remember how much amount is exempt

 

Some allowances given are fully exempt,while others are exempt upto some limits

Those allowances which do not fall in this list are fully taxable

 

Folllowing is chart of Important Allowances

 

Computation of TDS on Employee Salary with Allowances - TDS on Salary with Allowances

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Q1

Particulars Amt Remarks
Basic Salary 100000  
Dearness Allowance 4000  
Special Pay 2000  
Uniform Allowance 5000 (Bill Submitted for 4000)
Academic Allowance 4000 (No Bill Submitted but declaration given of amount spent)
Travelling Allowance 6000 (Bill Submitted for 6500)
Daily Allowance 6000 (200*30 days,he came to work for 26 days)

What is Gross Salary,TDS and Net Salary

-a-

PARTICULARS AMT RECD EXEMPT TAXABLE
Basic Salary 100000 0 100000
Dearness Allowance 4000 0 4000
Special Pay 2000 0 2000
Uniform Allowance 5000 4000 1000
Academic Allowance 4000 4000 0
Travelling Allowance 6000 6000 0
Daily Allowance 6000 5200 800
TOTAL 127000 19200 107800
 PARTICULARS   AMOUNT
GROSS SALARY 127000
MONTHLY TAXABLE SALARY 107800
INCOME FROM SALARY 1293600
TAX  200580
REBATE 0
NET TAX 200580
CESS 6017
TAX+ CESS 206597
MONTHY TDS 17216
NET SALARY 109784

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 Q2.

Particulars Amt Remarks
Basic Salary 40000  
Lunch Allowance 4000  
Transport Allowance 2500 (No Bill Submitted)
Children Education Allowance 4500 (1500*3 children)
Variable Pay 30000  

What is Gross Salary,TDS and Net Salary

-a-

PARTICULARS AMOUNT RECEIVED EXEMPT TAXABLE
Basic Salary 40000 0 40000
Lunch Allowance 4000 0 4000
Transport Allowance 2500 1600 900
Children Education Allowance 4500 200 4300
Variable Pay 30000 0 30000
TOTAL 81000 1800 79200
  Particular Amount
GROSS SALARY 81000
MONTHLY TAXABLE SALARY 79200
INCOME FROM SALARY 950400
TAX  102580
REBATE 0
NET TAX 102580
CESS 3077
TAX+ CESS 105657
MONTHY TDS 8805
NET SALARY 72195

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Q3.

Particulars Amt Remarks
Basic Salary 40000  
Lunch Allowance 4000  
Transport Allowance 2500 (No Bill Submitted)
Children Education Allowance 4500 (1500*3 children)
Variable Pay 30000  
HRA 15000 (Rent receipts submitted of 18000  of gurgaon,he lives in gurgaon and works in delhi)

What is Gross Salary,TDS and Net Salary

-a-

PARTICULARS AMOUNT RECEIVED EXEMPT TAXABLE
Basic Salary 40000 0 40000
Lunch Allowance 4000 0 4000
Transport Allowance 2500 1600 900
Children Education Allowance 4500 200 4300
Variable Pay 30000 0 30000
HRA 15000 14000 1000
TOTAL 96000 15800 80200
  Particular Amount
GROSS SALARY 96000
MONTHLY TAXABLE SALARY 80200
INCOME FROM SALARY 962400
TAX  104980
REBATE 0
NET TAX 104980
CESS 3149
TAX+ CESS 108129
MONTHY TDS 9011
NET SALARY 86989

Working  Note for HRA

  Particular Amount
actual amt receive  15000
rent paid -10% of basic 14000
40% of basic 16000
AMOUNT EXEMPT 14000

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Q4.

Particulars Amt Remarks
Basic Salary 40000  
Lunch Allowance 4000  
Transport Allowance 2500 (No Bill Submitted)
Children Education Allowance 4500 (1500*3 children)
Variable Pay 30000  
HRA 15000 (Rent agreement of 18000  of gurgaon,he lives in gurgaon and works in Delhi, no rent receipts) 

What is Gross Salary,TDS and Net Salary

-a-

If no rent receipts submitted, HRA will be fully taxable

Working Note for HRA

PARTICULARS AMOUNT RECEIVED EXEMPT TAXABLE
Basic Salary 40000 0 40000
Lunch Allowance 4000 0 4000
Transport Allowance 2500 1600 900
Children Education Allowance 4500 200 4300
Variable Pay 30000 0 30000
HRA 15000 0 15000
TOTAL 96000 1800 94200
  Particular   Amount
ACTUAL HRA 15000
RENT PAID-10%*(BASIC+DA) 0
40%*(BASIC+DA) 16000
MINIMUM IS EXEMPT 0
  Particular Amount
GROSS SALARY 96000
MONTHLY TAXABLE SALARY 94200
INCOME FROM SALARY 1130400
TAX  151620
REBATE 0
NET TAX 151620
CESS 4549
TAX+ CESS 156169
MONTHY TDS 13014
NET SALARY 82986

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To Learn  more about allowances,click here

  1. Tax Practical
  2. Practical Payroll (TDS Salary,PF,ESI)
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CA Maninder Singh
CA Maninder Singh is a Chartered Accountant for the past 6 years. He provides courses for Practical Accounts, Taxation and Efiling at teachoo.com .
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