Direct and Indirect Taxes

Income from Salaries and House Property

Project done by Group 2, Class - SYBMS, KC College

Bhavika Jain – 03
Nikita Desai – 13
Priyanka Kale - 23
Bhagyashree Lokhande - 29
Jidnyasa Malvankar – 32
Nisha Tawde - 53
Atul is a shareholder in Tarak engineering limited, holding 60%of
it equity share capital which makes him a substantially interested
share holder. He is also employed by the company as manager.
The particulars of his emoluments during the year ended 31st
march, 2010 are as under:
1. Salary rs 2000 per month
2. D.A. Rs 300 per month
3. Contribution to recognized provident fund:
a. By the company rs 100 per month
b. By Atul rs 80 per month
4. Salary in lieu of leave rs 4000
5. Provision of free lunch during office hours in the office
premises costing rs 3600
6. The monetary value of the facility given to him and his family
during the year at the companies holiday home rs 3000
7. Membership fees of Atul foundation paid by the company on
his behalf rs 2000
8. Leave travel allowance received rs 5000 out of which rs
3000 is exempt u/s10(5)
9. Provision of a car with driver for office as well as for personal
use, the perquisite value being rs 4000
10. During the year he travelled to Europe on behalf of the
company and spent rs 52000. The company reimbursed rs
40000 on account of the same
11. Mr. Atul who is also director in the company receives rs
3000 as directors sitting fees during the year.
Q1. You are required to compute his income from salaries for
A.Y. 10-11
 SOLUTION

Computation of income from salary

Particulars Rs Rs

A] (1) salary (2000 x 12) 24000

(2) D.A. (300 x 12) 3600

(3)leave salary 4000 31600

B] Allowances:

Leave travel allowance 5000

Less: exempt 3000 2000

C] Perquisites:

(1) Holiday home facilities 3000

(2) Membership fees paid by the employer 2000

(3) Motor car use 4000 9000

GROSS SALARY 42600

Less: deductions Nil

INCOME FROM SALARIES 42600

Mr. Lal owns a house having 2 residential units. The construction
of the house was completed on 1st April, 2007. These two units
are A and B ant the relevant particulars are:
Particulars A B

Self occupied Let out

Area occupied 1/3 2/3

Municipal rate able value 85000 110000

Municipal taxes paid 2500 5000

Land revenue 1200

Interest on loan taken for constructing house 24000
Fire insurance premium 1500
Collection expenses 500
Unit B was vacant up to 30th June, 2009
Ascertain his income from house property for a.y. 10- 1
Particulars A B
LOP SOP
Fair rent
Municipal value
Increasing
Standard rent
(Dec)reasonable 82500 85000
letable value
Actual rent
(inc) gross annual 82500 85000
value

-Municipal tax -5000 -2500

Net annual value 77500 Nil
-30%standard 23250
deuction
-interest 16000 8000
House property 38250 8000
income

Computation of income from house property

Total house property 38250-8000=30250