WORKOUT BATCH NOV 2023

QUESTION 1 SALARIES MTP MAY 2018 (10 MARKS)

Mrs. Anjali is a Finance Manager of Anand Construction Ltd. in Mumbai, furnishes the following particulars
for the financial year 2017-18:
(i) She was appointed on 01-03-2017 in the scale of Rs 20,000 - Rs 2,500 - Rs 35,000.
(ii) She is paid dearness allowance (which forms part of salary for retirement benefits) @30% of basic pay and
bonus equivalent to two month's basic pay as at the end of the year.
(iii) She receives Rs 2,000 per month as transport allowance (for commuting between place of residence and
office) and Rs 4,000 each as hostel allowance for three children.
(iv) She contributes 15% of his salary (basic pay plus dearness allowance) towards recognized provident fund
and the Company contributes the same amount.
(v) Lunch provided by the company during office hours Cost to the employer Rs 10,000
(vi) Rent free unfurnished accommodation provided by the company for which the company pays Rs 60,000
per annum.
(vii) The Company reimbursed the medical treatment bill of Rs 35,000 of her son, who is dependent on her.
(viii) A gift voucher of Rs 6,000 was given on the occasion of her marriage anniversary. It is given by the
company to all employees above certain grade.
(ix) Facility of laptop and computer was provided to Mrs. Anjali for both official and personal use. Cost of

al
laptop Rs 45,000 and computer Rs 35,000 were acquired by the company on 01.12.2016.
(x) Professional tax paid by the company Rs 2,000

w
Compute the amount of salary chargeable to tax in the hands of Mrs. Anjali for A.Y. 2018-19

ra
QUESTION 2 SALARIES MTP MAY 2018 (10 MARKS), MTP NOV 2019 (7 MARKS), NOV 2018 (6
MARKS)

ended 31.03.2018:
(i) Basic salary upto 31.10.2017: Rs 50,000 p.m.
Ag
Mr. Manish, employed as Finance Manager in Beta Ltd., furnishes you the following information for the year

Basic salary from 01.11.2017: Rs 60,000 p.m.

e
Note: Salary is due and paid on the last day of every month.
re

(ii) Dearness allowance @ 40% of basic salary (not forming part of salary for retirement benefits).
(iii) Bonus equal to one month salary. Paid in October 2017 on basic salary plus dearness allowance applicable
Sh

for that month.

(iv) Contribution of employee to recognized provident fund account of the employee@16% of basic salary.
Employer contributed an equivalent amount.
(v) Profession tax paid Rs. 3,000 of which Rs. 2,000 was paid by the employer.
u

(vi) Facility of laptop and computer was provided to Manish for both official and personal use. Cost of laptop
Rs. 45,000 and computer Rs. 35,000 were acquired by the company on 01.12.2017.
An

(vii) Motor car owned by the employer (cubic capacity of engine exceeds 1.60 litres) provided to the employee
from 01.11.2017 meant for both official and personal use. Repair and running expenses of Rs. 45,000 from
01.11.2017 to 31.03.2018, were fully met by the employer. The motor car was self-driven by the employee.
A

(viii) Leave travel concession given to employee, his wife and three children (one daughter aged 6 and twin
sons aged 4). Cost of air tickets (economy class) reimbursed by the employer Rs. 20,000 for adults and Rs.
C

30,000 for three children. Manish is eligible for availing exemption this year to the extent it is permissible in
law.
Compute the amount of salary chargeable to tax in the hands of Mr. Manish for the assessment year 2018-19

QUESTION 3 MCQ MTP MAY 2019 (2 MARKS)

X is an employee of Z Ltd who receives Rs.1,25,000 as gratuity (he is covered under the Payment of Gratuity
Act, 1972). He retires on 31.01.2019 after service of 29 years and 8 months. At the time of retirement, X drew
monthly salary of Rs.5,200 and monthly bonus of Rs.2,000. Compute the amount of gratuity exempt from tax in
the instant case u/s 10(10) of the Income-tax Act, 1961.
(a) Rs.90,000 (b) Rs.1,25,000 (c) Rs.78,000 (d) Rs.87,000

QUESTION 4 MCQ MTP MAY 2019 (1 MARK)

A member of parliament is entitled to salary, constituency allowance and daily allowance when the Parliament
is in session. Which of the following statements are correct?
(a) His entire income is taxable under the head "Salaries".
CA Anu Shree Agrawal ~ M: +91 7708821751 ~ For updates, revision videos and notes:
TELEGRAM CHANNEL: https://t.me/caanushreeagrawal | INSTAGRAM: anushreeagrawal4
YOUTUBE: https://www.youtube.com/c/CAANUSHREEBANSALAGRAWAL
WORKOUT BATCH NOV 2023
(b) Only his salary component is taxable under the head "Salaries". Constituency allowance and daily
allowance are exempt.
(c) Only his salary component is taxable under the head "Income from other sources". Constituency allowance
and daily allowance are exempt.
(d) His salary component and constituency allowance is taxable under the head "Income from other sources".
Daily allowance is exempt

QUESTION 5 MCQ MTP MAY 2019 (2 MARKS)

Provision of rent free accommodation and motor car owned by Alpha Ltd. to its employee Mr. Anurag, where
motor car is allowed to be used by Mr. Anurag both for official and personal purposes, is a
(a) perquisite taxable in case of all employees
(b) perquisite taxable only in case of specified employees
(c) perquisite of rent free accommodation is taxable in case of all employees whereas perquisite of motor car is
taxable only in case of specified employees
(d) perquisite of rent free accommodation is taxable only in case of specified employees whereas perquisite of
motor car is taxable in case of all employees

al
QUESTION 6 SALARY COMPUTATION MTP MAY 2020 (7 MARKS), RTP NOV 2018, RTP NOV
2020

w
ra
Ag
e
re
Sh
u
An
A
C

QUESTION 7 SALARY COMPUTATIPN MTP MAY 2021 (7 MARKS), NOV 2020 OS (7 MARKS)
Mr. Samaksh is a Marketing Manager in Smile Ltd. From the following information, you are required to
compute his income chargeable under the head Salary for assessment year 2021-22.
(i) Basic salary is Rs. 70,000 per month. (ii) Dearness allowance @ 40% of basic salary
(iii) He is provided health insurance scheme approved by IRDA for which Rs. 20,000 incurred by Smile Ltd.
(iv) Received Rs. 10,000 as gift voucher on the occasion of his marriage anniversary from Smile Ltd.
(v) Smile Ltd. allotted 800 sweat equity shares in August 2020. The shares were allotted at Rs. 450 per share
and the fair market value on the date of exercising the option by Mr. Samaksh was Rs. 700 per share.
(vi) He was provided with furniture during September 2016. The furniture is used at his residence for personal
purpose. The actual cost of the furniture was Rs. 1,10,000. On 31st March, 2021, the company offered the
furniture to him at free of cost. No amount was recovered from him towards the furniture till date.
CA (vii)
Anu Received Rs. 10,000
Shree Agrawal towards
~ M: entertainment~allowance.
+91 7708821751 For updates, revision videos and notes:
TELEGRAM CHANNEL: https://t.me/caanushreeagrawal | INSTAGRAM: anushreeagrawal4
YOUTUBE: https://www.youtube.com/c/CAANUSHREEBANSALAGRAWAL
WORKOUT BATCH NOV 2023
(viii) Housing Loan@ 4.5% p.a. provided by Smile Ltd., amount outstanding as on 01.04.2020 is Rs. 15 Lakhs.
Rs. 50,000 is paid by Mr. Samaksh every quarter towards principal starting from June 2020. The lending rate of
SBI for similar loan as on 01.04.2020 was 8%.
(ix) Facility of laptop costing Rs. 50,000

QUESTION 8 SALARY COMPUTATIPN MTP NOV 2018 (10 MARKS)

al
w
ra
QUESTION 9 SALARY COMPUTATIPN MAY 2018 (10 MARKS)

Ag
Mr. Honey is working with a domestic company having a production unit in the U.S.A. for last 15 years. He has
been regularly visiting India for export promotion of company's product. He has been staying in India for
atleast 184 days every year.
He submits the following information:
e
Salary received outside India (For 6 months) Rs 50,000 P.M
re

Salary received in India (For 6 months) Rs 50,000 P.M.

He has been given rent free accommodation in U.S.A. for which company pays Rs 15,000 per month as rent,
but when he comes to India, he stays in the guest house of the company. During this period he is given free
Sh

lunch facility.
During the previous year, company incurred an expenditure of Rs 48,000 on this facility.
He has been provided a car of 2000 cc capacity in U.S.A. which is used by him for both office and private
u

purposes. The actual cost of the car is Rs 8,00,000. But when he is in India, the car is used by him and the
members of his family only for personal purpose. The monthly expenditure of car is Rs 5,000. His elder son is
An

studying in India for which his employer spends Rs 12,000 per year whereas his younger son is studying in
U.S.A. and stays in a hostel for which Mr. Honey gets Rs 3,000 per month as combined allowance.
The company has taken an accident insurance policy and a life insurance policy. During the previous year, the
company paid premium of Rs 5,000 and Rs 10,000, respectively. Compute Mr. Honey's taxable income from
A

salary for the Assessment Year 2018-19

C

QUESTION 10 SALARY COMPUTATIPN NOV 2018 (OS) (5 MARKS), RTP NOV 2019 - IGNORE
Ms. Nandini, a resident individual, aged 48 years, is an assistant manager of Dye Hard Ltd. She was appointed
on 1st June, 2015 at a salary of Rs 32,000 per month. During the previous year 2017-18, she received the
following amounts from her employer.
(i) Dearness allowance (10% of basic pay which forms part of salary for retirement benefits).
(ii) Bonus for the previous year 2016-17 amounting to Rs 32,000 was received on 1st October, 2017.
(iii) Fixed Medical allowance of Rs 20,000 for meeting medical expenditure.
(iv) She was also reimbursed the medical bill of her father-in-law dependent on her amounting to Rs 3,000.
(v) Ms. Nandini was provided;
 a laptop both for official and personal use. Laptop was acquired by the company on 1st June, 2015 at Rs
15,000.
 a domestic servant at a monthly salary of Rs 1,000 which was reimbursed by her employer.
(vi) Dye Hard Ltd. allotted 500 equity shares in the month of December 2017 @ Rs 150 per share against the
fair market value of Rs 250 per share on the date of exercise of option by Ms. Nandini. The fair market value
CA was
Anucomputed in accordance
Shree Agrawal ~ M: with
+91 the method prescribed
7708821751 under the revision
~ For updates, Act. videos and notes:
TELEGRAM CHANNEL: https://t.me/caanushreeagrawal | INSTAGRAM: anushreeagrawal4
YOUTUBE: https://www.youtube.com/c/CAANUSHREEBANSALAGRAWAL
WORKOUT BATCH NOV 2023
(vii) Professional tax Rs 2,500 (out of which Rs 1,800 was paid by the employer).
Compute the total Income of Ms. Nandini for the assessment year 2018-19. (Assume that Ms. Nandini pays tax
on the receipt basis).
Ans: Rs 4,88700

QUESTION 11 NOV 2018 (2 MARKS)

Examine with brief reasons, whether the following are chargeable to income-tax and the amount liable to tax
with reference to the provisions of the Income-tax Act, 1961:
Allowance received by an employee Mr. Ram working in a transport system at Rs 12,000 p.m. which has been
granted to meet his personal expenditure while on duty. He is not in receipt of any daily allowance from his
employer.

QUESTION 12 NOV 2019 OS (7 MARKS), MTP 1 Nov 2021

Mr. Swaraj has provided the following particulars for the year ended 31-03-2019:
(i) He retired on 31-12-2018 at the age of 58, after putting in 25 years and 9 months of service, from a private
company at Delhi.
(ii) He was paid a salary of Rs 25,000 p.m. and house rent allowance of Rs 6,000 p.m. He paid rent of Rs 6,500

al
p.m., during his tenure of service.
(iii) On retirement, he was paid a gratuity of Rs 3,50,000. He was covered by the payment of Gratuity Act,

w
1972. He had not received any other gratuity at any point of time earlier, other than this gratuity.
(iv) He had accumulated leave of 15 days per annum during the period of his service; this was encashed by him

ra
at the time of his retirement. A sum of Rs 3,15,000 was received by him in this regard. Employer allowed 30
days leave per annum.

him a mobile phone worth Rs 50,000 from their own contribution.Ag

(v) The company presented him with a gift voucher of Rs 5,000 on his retirement. His colleagues also gifted

You are requested to compute his income from salary for the assessment year 2019-20.
e
QUESTION 13 MAY 2018 RTP
re

Mr. Kashyap retired from the services of M/s ABC Ltd. on 31.01.2018, after completing service of 30 years and
one month. He had joined the company on 1.1.1988 at the age of 30 years and received the following on his
Sh

retirement:
(i) Gratuity Rs 5,50,000. He was covered under the Payment of Gratuity Act, 1972.
(ii) Leave encashment of Rs 3,30,000 for 330 days leave balance in his account. He was credited 30 days leave
for each completed year of service.
u

(iii) As per the scheme of the company, he was offered a car on 31.01.2018 which was purchased on
01.03.2015 by the company for Rs 5,00,000. Company has recovered Rs 2,00,000 from him for the car.
An

Company depreciates the vehicles at the rate of 15% on Straight Line Method.
(iv) An amount of Rs 3,00,000 as commutation of pension for 2/3 of his pension commutation.
(v) Company presented him a gift voucher worth Rs 8,000 on his retirement.
A

Following are the other particulars:

(i) He has drawn a basic salary of Rs 20,000 and dearness allowance @50% of basic salary for the period from
C

01.04.2017 to 31.01.2018. Dearness allowance does not form part of pay for retirement benefits.
(ii) Received pension of Rs 7,000 per month for the period 01.02.2018 to 31.03.2018 after commutation of
pension.
Compute his income taxable under the head “Salaries” for Assessment Year 2018-19.

QUESTION 14 MAY 2019 RTP - IGNORE

Miss Riya has started working in a reputed company. This is her first job. She earned total income of Rs8 Lakhs
in P.Y. 2018-19. While filing her return of income she had a doubt with respect to deduction of transport
allowance. Her father advised her that she cannot claim deduction of transport allowance while her friend told
that maximum deduction of Rs1600 p.m. in respect of the said allowance can be claimed. According to you,
what is the correct treatment for the same?
(a) Transport allowance upto a maximum Rs1600 per month can be claimed.
(b) Transport allowance upto a maximum Rs800 per month can be claimed.
(c) No separate deduction for transport allowance is allowed. However, a standard deduction of Rs 50,000 is
allowed to salaried assessees.
CA Anu Shree Agrawal ~ M: +91 7708821751 ~ For updates, revision videos and notes:
TELEGRAM CHANNEL: https://t.me/caanushreeagrawal | INSTAGRAM: anushreeagrawal4
YOUTUBE: https://www.youtube.com/c/CAANUSHREEBANSALAGRAWAL
WORKOUT BATCH NOV 2023
(d) Deduction of transport allowance is allowed without any monetary limit.
(Ans: c)

QUESTION 15 MAY 2019 RTP - IGNORE

al
w
ra
Ans: Rs 14,79,872
Ag
e
QUESTION 16 NOV 2019 RTP
re

Mr. Jagat is an employee in accounts department of Bharat Ltd., a cellular company operating in the regions of
eastern India. It is engaged in manufacturing of cellular devices. During F.Y. 2018-19, following transactions
were undertaken by Mr. Jagat:
Sh

(i) He attended a seminar on “Perquisite Valuation”. Seminar fees of Rs 12,500 was paid by Bharat Ltd.
(ii) Tuition fees of Mr. Himanshu (son of Mr. Jagat) was reimbursed by Bharat Ltd. Amount of fees is Rs
25,000.
u

(iii) Ms. Sapna (daughter of Mr. Jagat) studies in DPS Public School (owned and maintained by Bharat Ltd.).
Tuition fees paid for Ms. Sapna was Rs 750 per month. Cost of education in similar institution is Rs 5,250 per
An

month.
Compute the amount which is chargeable to tax under the head “Salaries” in hands of Mr. Jagat for A.Y. 2019-
20.
A

(a) Rs 25,000 (b) Rs 37,500 (c) Rs 66,500 (d) Rs 79,000

C

QUESTION 17 STUDY MATERIAL

CA Anu Shree Agrawal ~ M: +91 7708821751 ~ For updates, revision videos and notes:
TELEGRAM CHANNEL: https://t.me/caanushreeagrawal | INSTAGRAM: anushreeagrawal4
YOUTUBE: https://www.youtube.com/c/CAANUSHREEBANSALAGRAWAL
WORKOUT BATCH NOV 2023
QUESTION 18 STUDY MATERIAL

QUESTION 19 MTP 2 NOV 2021

Mr. Kashyap, aged 38 years, is entitled to a salary of Rs. 40,000 per month. He is given an option by his
employer either to take house rent allowance or a rent free accommodation which is owned by the company.
The HRA amount payable was Rs. 8,000 per month. The rent for the hired accommodation was Rs. 6,500 per
month at New Delhi. Advice Mr. Kashyap whether it would be beneficial for him to avail HRA or Rent Free
Accommodation. Give your advice on the basis of “Net Take Home Cash benefits”. Assume Mr. Kashyap does
not opt for the provisions of section 115BAC

QUESTION 20 RTP MAY 2022 - ignore

Mr. Sunil is the CEO of Sheetal Textiles Ltd. His basic salary is Rs 6,00,000 p.m. He is paid 8% as D.A. He
contributes 10% of his pay and D.A. towards his recognized provident fund and the company contributes the

al
same amount. The accumulated balance in recognized provident fund as on 1.4.2020, 31.3.2021 and 31.3.2022
is Rs 50,35,000, Rs 71,46,700 and Rs 94,57,700, respectively. Compute the perquisite value chargeable to tax

w
in the hands of Mr. Sunil u/s 17(2)(vii) and 17(2)(viia) for the A.Y. 2021-22 and A.Y. 2022-23.

ra
QUESTION 21 RTP NOV 2022
Mr. Karan completed his MBA in April 2021 and joined XYZ Ltd from 01.05.2021. His basic salary is Rs
Ag
2,25,000 p.m. He is paid 12% of basic salary as D.A forming part of retirement benefits. He contributed 11% of
his pay and D.A. towards recognized provident fund and the company contributes the same amount.
Accumulated interest on provident fund as on 31.3.2022 is Rs 49,325. What would be the income chargeable to
e
tax under the head “Salaries” of Mr. Karan for the A.Y. 2022-23 if he does not opt for section 115BAC?
(a) Rs 27,26,442 (b) Rs 27,30,884 (c) Rs 27,22,000 (d) Rs 27,71,325
re
Sh
u
An
A
C

CA Anu Shree Agrawal ~ M: +91 7708821751 ~ For updates, revision videos and notes:
TELEGRAM CHANNEL: https://t.me/caanushreeagrawal | INSTAGRAM: anushreeagrawal4
YOUTUBE: https://www.youtube.com/c/CAANUSHREEBANSALAGRAWAL