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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

ParticularsAmtRemarks
Basic Salary100000 
Dearness Allowance4000 
Special Pay2000 
Uniform Allowance5000(Bill Submitted for 4000)
Academic Allowance4000(No Bill Submitted but declaration given of amount spent)
Travelling Allowance6000(Bill Submitted for 6500)
Daily Allowance6000(200*30 days,he came to work for 26 days)

What is Gross Salary,TDS and Net Salary

-a-

PARTICULARSAMT RECDEXEMPTTAXABLE
Basic Salary1000000100000
Dearness Allowance400004000
Special Pay200002000
Uniform Allowance500040001000
Academic Allowance400040000
Travelling Allowance600060000
Daily Allowance60005200800
TOTAL12700019200107800
 PARTICULARS AMOUNT
GROSS SALARY127000
MONTHLY TAXABLE SALARY107800
INCOME FROM SALARY1293600
TAX 200580
REBATE0
NET TAX200580
CESS6017
TAX+ CESS206597
MONTHY TDS17216
NET SALARY109784

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 Q2.

ParticularsAmtRemarks
Basic Salary40000 
Lunch Allowance4000 
Transport Allowance2500(No Bill Submitted)
Children Education Allowance4500(1500*3 children)
Variable Pay30000 

What is Gross Salary,TDS and Net Salary

-a-

PARTICULARSAMOUNT RECEIVEDEXEMPTTAXABLE
Basic Salary40000040000
Lunch Allowance400004000
Transport Allowance25001600900
Children Education Allowance45002004300
Variable Pay30000030000
TOTAL81000180079200
 ParticularAmount
GROSS SALARY81000
MONTHLY TAXABLE SALARY79200
INCOME FROM SALARY950400
TAX 102580
REBATE0
NET TAX102580
CESS3077
TAX+ CESS105657
MONTHY TDS8805
NET SALARY72195

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Q3.

ParticularsAmtRemarks
Basic Salary40000 
Lunch Allowance4000 
Transport Allowance2500(No Bill Submitted)
Children Education Allowance4500(1500*3 children)
Variable Pay30000 
HRA15000(Rent receipts submitted of 18000  of gurgaon,he lives in gurgaon and works in delhi)

What is Gross Salary,TDS and Net Salary

-a-

PARTICULARSAMOUNT RECEIVEDEXEMPTTAXABLE
Basic Salary40000040000
Lunch Allowance400004000
Transport Allowance25001600900
Children Education Allowance45002004300
Variable Pay30000030000
HRA15000140001000
TOTAL960001580080200
 ParticularAmount
GROSS SALARY96000
MONTHLY TAXABLE SALARY80200
INCOME FROM SALARY962400
TAX 104980
REBATE0
NET TAX104980
CESS3149
TAX+ CESS108129
MONTHY TDS9011
NET SALARY86989

Working  Note for HRA

 ParticularAmount
actual amt receive 15000
rent paid -10% of basic14000
40% of basic16000
AMOUNT EXEMPT14000

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Q4.

ParticularsAmtRemarks
Basic Salary40000 
Lunch Allowance4000 
Transport Allowance2500(No Bill Submitted)
Children Education Allowance4500(1500*3 children)
Variable Pay30000 
HRA15000(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

PARTICULARSAMOUNT RECEIVEDEXEMPTTAXABLE
Basic Salary40000040000
Lunch Allowance400004000
Transport Allowance25001600900
Children Education Allowance45002004300
Variable Pay30000030000
HRA15000015000
TOTAL96000180094200
 Particular Amount
ACTUAL HRA15000
RENT PAID-10%*(BASIC+DA)0
40%*(BASIC+DA)16000
MINIMUM IS EXEMPT0
 ParticularAmount
GROSS SALARY96000
MONTHLY TAXABLE SALARY94200
INCOME FROM SALARY1130400
TAX 151620
REBATE0
NET TAX151620
CESS4549
TAX+ CESS156169
MONTHY TDS13014
NET SALARY82986

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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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About the Author

CA Maninder Singh's photo - Expert in Practical Accounts, Taxation and Efiling
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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