Lecture Notes on Calculation of Taxable Salary

Introduction

• Taxable salary is calculated by considering basic salary, bonuses, allowances, etc.
• Calculators are permitted in the exam making calculations easier.

Salary Components

Basic Salary

• Example: ₹8000 per month
• For 12 months = ₹96000

Entertainment Allowance

• ₹8000 per month (Fully taxable)

DA (Dearness Allowance)

• 10% of Salary

Bonus

• Bonus equivalent to 3 months' salary = ₹54000

Rent-Free Unfurnished House

• 7.5% of Salary if population < 4 lakh

Other Details

• Company provides a furnished house and other facilities, which have different tax implications.
• Educational Facility: ₹14000 for the employee's child (taxable)

Calculation of Gross Salary

• Basic Salary: ₹216000
• DA not included as it is in percentage
• Entertainment Allowance: ₹8000
• Bonus: ₹54000

Evaluation of Rent-Free Accommodation

• 7.5% of Salary = ₹20850
• Value for Rent-Free Accommodation = ₹20850

Calculation of Taxable Salary

• Gross Salary: ₹320450
• Standard Deduction - ₹50000
• Taxable Salary: ₹270450

Conclusion

• Determination of taxable salary includes considering all monetary allowances and other salary components.
• Taxable salary is determined after standard deduction.