Mr. X retires from B Ltd. on 31st Jan 2020 after putting in service for 5yrs.

and received the following amounts

1. Salary ₹ 16,000 per month comprising of basic ₹ 10,000 and D.A. ₹ 6,000(D.A. not forming part of
2. Entertainment Allowance ₹ 3,000
3. Professional Tax paid by Mr. X ₹ 2,000
4. Leave salary ₹ 75,000 | Exempt amt ₹ 50,000
5. Gratuity ₹ 50,000(not covered under POGA )
6. His own contribution to RPF ₹ 25,000
7. Pension ₹ 3,000 per month. He got 50% of his pension commuted for 2,00,000 on 1st march 2020
Compute his taxable income for assessment year 2020-21

Solution:

Name of the Assessee: Mr. X

A.Y.- 2020-21 Legal Status: Individual
P.Y.-2019-20 Residential Status: R&OR
Computation of Total Income
Particulars Amount(₹) Amount(₹)
Basic Salary (10,000*10) 100,000
D.A.(6,000*10) 60,000
Entertainment Allowance 3,000
Leave Salary 75000
less: Exempt u/s 10(10AA) 50000 25000
Gratuity (W.N.1) 50,000
Less: Exempt u/s 10(10) 25,000 25,000
Uncommuted Pension(W.N.2) 4,500
Commuted Pension(W.N.3) 66,667
284,167
Less: Deduction u/s 16
ia) Standard Deduction 50,000
ii)Entertainment Allownace NIL
iii) Professional Tax 2,000 52,000
Net taxable Salary 232,167

Note: -Contribution towards RPF is his own contribution not the employers contribution. Hence, It is fully Exempt.
-As he is not a government employee he will not be getting deduction on Entertainment Allownace
 eived the following amounts from his employer:
000(D.A. not forming part of retirement benefits)

2,00,000 on 1st march 2020.

W.N.1- Gratuity
Least of ₹
i)Statutory limit 2,000,000
ii) 1/2*10000*5 25,000
iii) Actual amount received 50,000

W.N.2- Uncommuted Pension

50% of 3,000(Mar) 1,500
for feb 3,000
Total 4,500

W.N.3- Commuted Pension

Actual Amt received 200,000
less: Exempt(1/3*(200000/50%)) 133,333
Taxable Amt: 66,667

tion. Hence, It is fully Exempt.

rtainment Allownace
Yash an Indian Citizen leaves india for the first time for employment in Canada on July 1, 2019.
i) Determine his residential status for the assessment year 2020-21.
ii) What will be the status , if Yash leaves india for world tour?
iii) What will be the status, if Yash is a Nepali citizen settled in India?

Solution:
i)
Apr May Jun Jul Total
30 31 30 1 92

First basic Condition: 92< 182 days

Not satisfied
Second Basic Condition: >365 days in 4 yrs preceding p.y. & >60 days P.Y.
He falls in the exception category as he is going for employment outside india therefore he has to

He is a non-resident.

ii)
First basic Condition: 92< 182 days
Not satisfied
Second Basic Condition: >365 days in 4 yrs preceding p.y. & >60 days P.Y.
Satisfied
Additional Conditions:
1. Resident in 2 out of 10 yrs. Immediately preceding relevant P.Y.
Satisfied
2.> 730 days in 7yrs. Immediately preceding relevant P.Y.
Satisfied
Resident and Ordinarily Resident.

iii)
First basic Condition: 92< 182 days
Not satisfied
Second Basic Condition: >365 days in 4 yrs preceding p.y. & >60days P.Y.(exception won't apply)
Satisfied
Additional Conditions:
1. Resident in 2 out of 10 yrs. Immediately preceding relevant P.Y.
Satisfied
2.> 730 days in 7yrs. Immediately preceding relevant P.Y.
Satisfied
Resident and Ordinarily Resident.
ndia therefore he has to satisfy only the first basic condition
k