Page 1 : TAXATION- SALARY INCOME, B.com Sem 3 - By KAJAL GUPTA, ENTERTAINMENT ALLOWANCE, Entertainment Allowance, , Otherwise, , Government employee, Add to Gross Salary, , No Deduction, , Deduct from Gross Salary, Amount of Deduction, (1)20% of Basic salary, (2) Rs. 5000/(3) Actual Entertainment, Allowance Received, , xxx, xxx, xxx, , Whichever, is lower

Page 2 : Calculation of Taxable Entertainment Allowance, Particular, , Amount, xxx, , Total entertainment allowance received, Less: Deduction, (1)20% of Basic salary, , xxx, , (2) Rs. 5000/-, , xxx, , (3) Actual Entertainment Allowance, Received, , xxx, , Taxable entertainment allowance, , (xxx), Whichever, is lower, xxx

Page 3 : TAXATION- SALARY INCOME, B.com Sem 3 - By KAJAL GUPTA, ENTERTAINMENT ALLOWANCE, Ques 1.Shri Prashant Shah (a private sector employee) received Rs. 240000 as salary, and Rs.12000 as entertainment allowance during the year 2020-21. He had joined the, present employer on 1-4-2008 and at the time entertainment allowance was allowed, @Rs. 800 per month., Calculate the deductible (if any) amount of entertainment allowance from Gross, salary., Ans: Entire E.A is taxable, because the assesse is a non-government employee and, hence, nothing is to be deducted from Gross salary.

Page 4 : TAXATION- SALARY INCOME, B.com Sem 3 - By KAJAL GUPTA, ENTERTAINMENT ALLOWANCE, Ques 2.Ms. Pushpaben is employed in Gujarat Sachivalay. Her basic salary during the, previous year 2020-21 was Rs.24000 p. m. She was getting entertainment allowance of, Rs.1000 p.m., Calculate the exempted amount of entertainment allowance., Ans. She beings a government employee gets an entertainment allowance of Rs.12,000, for the year, but the maximum deduction allowed will be Rs.5,000., Amount of Deduction, (1)20% of Basic salary (24000x12x20%), (2) Rs. 5000/(3) Actual Entertainment Allowance Received, (1000x12), , 57,600, 5,000, 12,000, , Whichever is, lower

Page 5 : TAXATION- SALARY INCOME, B.com Sem 3 - By KAJAL GUPTA, ENTERTAINMENT ALLOWANCE, Ques 7 (B) Mr. A is an employee of Gujarat Sachivalay. His income details for the, previous year 2020-21 are as under:, Basic salary, , Rs.20000 per month, , Dearness allowance, , Rs10000 per month, , Commission, , 5% on total sales of Rs.200000, , Bonus, , Rs.5000, , Entertainment allowance received, , Rs.2000 per month, , Out of the entertainment allowance received, Mr. A has spent Rs.20000 during the, year., Find the taxable entertainment allowance for the assessment Year 2021-2022.

Page 6 : Ans. He beings a government employee gets an entertainment allowance of Rs.24,000, for the year, but the maximum deduction allowed will be Rs.5,000. Therefore total, taxable entertainment allowance will be Rs.19,000., , Calculation of Taxable Entertainment Allowance, Particular, , Amount, , Total entertainment allowance received (2000x12), , 24,000, , Less: Deduction, (1)20% of Basic salary(20000x12x20%) 48,000, (2) Rs. 5000/(3) Actual Entertainment Allowance, Received (2000x12), , 5,000, 24,000, , Taxable entertainment allowance, , (5,000), Whichever, is lower, 19,000

Page 7 : TAXATION- SALARY INCOME, B.com Sem 3 - By KAJAL GUPTA, HOUSE RENT ALLOWANCE, Calculation of House Rent Allowance, Particular, Amount, Total HRA received, xxx, Less: Amount of Exemption, (1)40% of Salary*, xxx, If Metro city*, 50% of salary, Whichever, (xxx), is lower, (2) Actual Rent Paid - 10% of, xxx, salary, (3) HRA Received, xxx, Taxable House Rent allowance, xxx

Page 8 : * Metro city, , * Salary, , -Bombay/Mumbai, Chennai, Kolkata , Delhi, Calculation of salary, Particular, Amount, Basic salary, xxx, + Dearness allowance, (forming part), xxx, of retirement benefit, + Commission, (% of Turnover ), xxx, Salary, xxx

Page 9 : TAXATION- SALARY INCOME, B.com Sem 3 - By KAJAL GUPTA, HOUSE RENT ALLOWANCE, Ques 11. Shree Anil Sheth of Surat draws Rs.2,40,000 p.a. as basic salary, Rs. 80,000, p.a. as D.A. (which is added to salary for P.F. purposes) and Rs. 96,000 p.a. as rent for, his residential house., Ascertain the amount of exempted HRA for the assessment year 2020-21.

Page 10 : Ans: Amount of Exempted HRA will be Rs.16,000, , Calculation of House Rent Allowance, Particular, Amount, Total HRA received, 80,000, Less: Amount of Exemption, (1)40% of Salary*, (3,20,000 x 40%), 1,28,000, Whichever, (64,000), is, lower, (2) Actual Rent Paid-10% of salary, 64,000, [96,000 – (3,20,000 x 10% )], (3) HRA Received, 80,000, Taxable House Rent allowance, 16,000

Page 11 : * Salary, , Calculation of salary, Particular, Amount, Basic salary, 2,40,000, + Dearness allowance, (forming part), 80,000, of retirement benefit, + Commission, (% of Turnover ), Salary, 3,20,000