KEY POINTS OF SALARIES CHAPTER OF INCOME TAX ACT 1961 for CBSE COMMERCE NET

SALARIES ( PART 1)



1.HOUSE RENT ALLOWANCE:
Section 10(13A) 


House Rent Allowance (HRA.) An employer includes certain allowance in the remuneration of the employee termed as House Rent Allowance or HRA. This allowance is used by the employee to meet the rental expenses for his/ her accommodation.


The least among the three will be allowed as deduction
1)The HRA amount received from the employer
2) Actual amount paid for rent minus 10% of basic salary*
3)50% of salary (metro city) and 40% HRA for (non-metro cities).

*salary means=basic pay+DA(retirement benefit)+commission(fixed percentage )

2.Fully taxable allowance

Dearness allowance
City compensatory allowance
Medical allowance
tiff in allowance
servant allowance
project allowance
overtime allowance
warden allowance
\family allowance

3.Fully exempt allowance

1.allowance given to UNO employees
2.allowance given to judges of supreme court
3.sumptuary allowance given to judges of high court and supreme court
4.Indian citizen who is government employee rendering service outside India.



4.Allowances received for performance of duties 
(exempt to the extent actually incurred)

The following allowances prescribed by the Central Board of Direct Taxes under Rule 2BB of the Income-tax rules are fully exempt to the extent actually incurred by the employee and any saving out of such allowance will be fully taxable :

1.Conveyance Allowance
2.Travelling Allowance
3.Daily Allowance
4.Research Allowance
5.Helper Allowance
6.Uniform Allowance


5.Allowance exempt up-to a notified limit

Children Education Allowance (maximum 2 children)Rs. 100/- p.m. per child
Children Hostel Allowance (maximum 2 children)Rs. 300/- p.m. per child
Transport AllowanceRs. 1600- p.m.
      Or
Rs. 3200/- p.m. (for handicapped)
Any Allowance granted to an employee working in any transport systemRs. 10,000/- p.m.
Or
70% of allowance
(whichever is lower)
Tribal Area AllowanceRs. 200/- p.m.
Underground AllowanceRs. 800/- p.m.
Compensatory Field Area AllowanceRs. 2,600/- p.m.
Compensatory Modified Field Area AllowanceRs. 1,000/- p.m.
Counter-insurgency allowance to members of armed forcesRs. 3,900/-p.m.



Comments

Post a Comment

Popular posts from this blog

BRIEF OVERVIEW OF FOREIGN TRADE POLICY (2015-2020)

Image
BRIEF OVERVIEW OF FOREIGN TRADE POLICY (2015-2020) FTP 2015-20 is introduced with the objective of increasing exports of goods and services as well as generation of employment and increasing value addition in the country so that schemes like  ‘Make in India’ and " digital Inda" can be realised.The focus of the new policy is to support both the manufacturing and services sectors, with a special emphasis on improving the ‘ease of doing business’. kEY HIGHLIGHTS OF THIS SCHEMES ARE:- 1.MEIS and SEIS schemes ► Merchandise Exports from India Scheme (MEIS): There were several reward schemes in for export promotion and in this policy an attempt is being made to rationalize and consolidate them into MEIS and SEIS .Five existing schemes to promote merchandize exports have been merged into a single Merchandise Exports from India Scheme (MEIS). In this scheme, the incentives are to be provided in the form of duty scrips as % of FOB {free on board} value of exports. On
Read more

QUESTION SET 7 (CBSE COMMERCE NET)

Image
QUESTION SET-7 36 . The following is the demand function in the small market: Q=50-5P where Q denotes quantity in physical units and P denotes price of the commodity.At price rupees 5 the point price elasticity of demand would be: A. zero B. equal to unity C.highly elastic D.highly inelasti c ANSWER:-B EXPLANATION :-As we know that Ed=-(dQ / dP ) X (P/Q  ) P=5 (given) Q=50-5*5 Q=50-25 Q=25 dQ /dP=-5 (by differentiating) Ed=(-)(-)5*(5/25) Ed   =25/25 Ed=1 equal to unity 37 . Which one of the following technique for appraisal of investment proposals are based on time value of money a. accounting rate of return b.Internal rate of return c.profitability index d.earning per share codes:- A. a and b B. b and c C.a and d D.a,b and d ANSWER:-B EXPLANATION :- internal rate of return (IRR) and profitability index (PI) are part of discounted cash flow method which consider time value of money. 38.which of the following assumptions is not includ
Read more

QUESTION SET-4 (CBSE COMMERCE NET )

Image
               DEAR READERS,                      Here is another entry in question set series!               11.  Given :             Margin of Safety   80,000            Profit   20,000            Sales   3,00,000            What is the amount of Fixed Cost ?             (1)          1,00,000                 (2)          75,000                     (3)          55,000                               (4)          20,000            ANSWER:-3           EXPLANATION:- as we know that MARGIN OF SAFETY  = PROFIT/ PV              RATIO            80,000=20,000 /PV RATIO            PV RATIO=.25=25%            CONTRIBUTION=SALES* PV RATIO                             =3,00,000*25%                             =75,000           CONTRIBUTION-FIXED COST=PROFIT           75,000-FIXED COST=20000           FIXED COST=55,000           12. Which of the following   is   not   regulated by The Competition Act, 2002 ?
Read more