Question

Mr.A is the cheif Executive of a multinational company.Detail of his emoluments are as follow:
RS
a)Basic salary 4004520
b)Bonus. 1980642
c)utility allownce. 400452
d)leave encashmnet. 538083
e)other allowance. 90000
f)house rent allownce. 1802040
Apart from the above he has received director fee amounting to Rs5200
During the year he has sold shares that were acquired through exercise of a "Stock Option" (being a shares of U.K company) two years ago.The gain on sale amount to Rs,4206000.
He also owns a property which has been let out on rent.The details of rent received and expenses incurred are as follow:
a) Rent Rs,10000 per month The property was lent out on rent for the whole year.
b) He has paid poperty tax amounting to Rs.11500
c) During the year he has paid Rs,6000 for repairs and maintenance.
During the year the tax withheld at source from salary income is Rs,3600000
*Required*:You required to compute taxable income and tax liability for the tax year.

Answer 1

Calculation of Taxable Income of Mr.A, who is Chief Executive of a Multinational Company are:-

1. Income from Salary:-

• Basic Pay (Fully Taxable) = Rs.4004520
• Bonsu (Fully Taxable) = Rs. 1980642
• Utility Allowance (Fully Taxable) = Rs. 400452
• Leave Encash. (Fully Taxable) = Rs. 538083
• Other Allowance (Fully Taxable) = Rs.90000
• HRA (Fully-taxable as no rent paid)= Rs.1802040

Total taxable Income From Salary = Rs. 8815737

Less:- Standard Deduction (F.Y 19-20)=Rs. 50000

Net Taxable Salary = Rs. 8765737

2. Income From House Property:-

• Gross Annual Value = Rs.(10,000*12)= Rs.1,20,000
• Less:- Propert Tax Paid = Rs.11,500
• Net Annual Value(NAV) = Rs(1,20,000-11,500)= Rs. 108500
• Less:- Standard Deuction 30% of NAV = Rs(108500*30%)=Rs. 32550
• Taxable Income From house property = Rs (108500-32550)= Rs.75950

3. Income From Capital Gain

• Since it is Long-Term Capital Gain from unlisted shares it would be taxed flat @ 20% without the benefit of the slab rate.
• LTCG from Unlisted Shares = Rs. 4206000

4. Income From Other Source

• Director Fees = Rs.52,00

Total Taxable Income = (1.+2.+3+4)above

i.e = Rs(8765737+75950+5200)= Rs. 8846887(will get slab Benefit) + LTCG (4206000)( will not get slab benefit)

Tax Liability:-

Particulars	Amount (Rs.)Tax
Income Upto 2,50,000	Nil
2,50,000- 5,00,000 @ 5%	12,500
5,00,000- 10,00,000 @ 20%	1,00,000
Above 10,00,000 @ 30% (8846887-10,00,000)78,46,887	2354066
LTCG 4206000 @ 20%	841200
Total Tax Liability	3307766

Less:- TDS deducted from Salary

(36,00,000)

Net Tax Liability /(Refund)

(292234)