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PART
- C
Examples
of computation of income of the nature of 'Salary' received
by a foreign national showing clearly the scope of total
income, the basis of valuation of perquisites received
and chargeability under various alternatives:
COMPUTATION
OF INCOME TAX ON SALARIES FOR INDIVIDUALS
ALTERNATIVE - 'A'
COMPUTATION OF INCOME TAX ON SALARIES FOR INDIVIDUALS
ASSESSMENT YEAR 2002-2003 (FINANCIAL YEAR 2001-2002)
(WHERE TAX IS BORNE BY THE EMPLOYEE)
| |
A
|
B
|
C
|
| 1 |
Basic
salary in DM (per month) |
8,000
|
9,000
|
10,000
|
| 2 |
Basic
Salary converted in INR Conversion Rate 1 DM = Rupees
23.00 (per annum) |
2,208,000
|
2,484,000
|
2,760,000
|
| Value
of Perquisites |
| 3 |
Rent
Free Accommodation: Lower
of the following:
|
| |
Actural
Lease rental |
480,000
|
|
|
| |
10%
of Salary |
220,800
|
248,400
|
276,000
|
| 4 |
Transport |
26,400
|
26,400
|
26,400
|
| 5 |
Utilities |
96,000
|
96,000
|
96,000
|
| 6 |
Taxable
Salary |
2,551,200
|
2,854,800
|
3,158,400
|
| 7 |
Ttax
on Above |
754,147
|
847,049
|
939,950
|
| 8 |
Net
take Home Pay (2 - 7)
|
1,453,853
|
1,636,951
|
1,820,050
|
Assumptions
Income Tax is to be deducted from the salary of the
employee at an average rate at the time of each payment,
and the same is not borne by the employer.
Rental
value of the accommodation provided to the employee
has been taken @ Rs 40,000/- per month.
Transport and utilities are provided by the employer.
As per Income Tax Rules, Perquisite value of transport
(including provision of chauffeur) has been considered
@ Rs 2,200/- per month and Utilities Rs. 8000 p.m..
No other perquisite has however been considered for
the purpose of this computation.
ALTERNATIVE
- 'B'
COMPUTATION OF INCOME TAX ON SALARIES FOR INDIVIDUALS
ASSESSMENT YEAR 2002-2003 (FINANCIAL YEAR 2001-2002)
(WHERE TAX IS BORNE BY THE EMPLOYER-Section10(5B) EXEMPTION
NOT CLAIMED)
| |
A
|
B
|
C
|
|
1
|
Basic
salary in DM (per month) |
8,000
|
9,000
|
10,000
|
|
2
|
Basic
Salary converted in inr Conversion Rate 1 DM = Rupees
23.00 (per annum) |
2,208,000
|
2,484,000
|
2,760,000
|
|
Value
of Perquisites
|
|
3
|
Income
Ttax paid by the Eemployer
|
1,086,667
|
1,220,531
|
1,354,395
|
|
4
|
Rent
free Accommodation: Lower of following:-
|
|
|
Actural
Lease Rental |
480,000
|
|
|
|
|
10%
of salary |
220,800
|
248,400
|
276,000
|
|
5
|
transport |
26,400
|
26,400
|
26,400
|
|
6
|
utilities |
96,000
|
96,000
|
96,000
|
|
7
|
gross
salary |
3,637,867
|
4,075,331
|
4,512,795
|
|
8
|
tax
on above |
1,086,667
|
1,220,531
|
1,354,395
|
|
9
|
net
take home pay (2)
|
2,208,000
|
2,484,000
|
2,760,000
|
Assumptions
- Income
Tax is not to be deducted from the salary of the employee
as tax is borne by employer.
- Rental
value of the accommodation provided to the employee
has been taken @ Rs 40,000/- per month
- Transport
and utilities are provided by the employer. As per
Income Tax Rules, perquisite value of transport (including
provision of chauffeur) has been considered @ Rs 2,200/-
per month and Utilities @ Rs 8,000/- p.m. No other
perquisite has however been considered for the purpose
of this computation
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