Mr. Sailesh is a Marketing Manager in Smile Ltd. From the following information, you are required to compute his income chargeable under the head…

Computation of income under the head “Salaries” of Mr. Sailesh for the A.Y.2024-25 Particulars Particulars ₹ Basic Salary [₹ 70,000 x 12 months] 8,40,000 Dearness allowance [40% of 8,40,000] 3,36,000 Entertainment allowance 10,000 Interest on housing loan given at concessional rate, would be perquisite, since the amount of loan exceeds - 20,000, For computation, the lending rate of SBI on 1.4.2023 @8% has to be considered. Thus, perquisite value would be determined @ 3.5% (8% - 4.5%) [See Working Note] 49,291 Health insurance premium paid by the employer [tax free perquisite] Nil Gift voucher on the occasion of his marriage anniversary [As per Rule 3(7)(iv), the value of any gift or voucher or token in lieu of gift received by the employee or by member of his household exceeding - 5,000 in aggregate during the previous year is fully taxable] (See note below) 10,000 Allotment of sweat equity shares Fair market value of 800 sweat equity shares @700 each 5,60,000 Less: Amount recovered @450 each 3,60,000 2,00,000 Use of furniture by employee 10% p.a. of the actual cost of 1,10,000 11,000 Use of Laptop Facility of use of laptop is not a taxable perquisite Nil Transfer of asset to employee Value of furniture transferred to Mr. Sailesh 1,10,000 Less: Normal wear and tear @10% for each completed year of usage on SLM basis [1,10,000 x 10% x 4 years (from September 2019 to September 2023)] 44,000 66,000 Gross Salary 15,22,291 Less: Standard deduction u/s 16 [Actual salary or - 50,000, whichever is less] 50,000 Net Salary 14,72,291 Working Note: Computation of perquisite value of loan given at concessional rate For computation, the lending rate of SBI on 1.4.2023 @8% has to be considered. Thus, perquisite value would be determined @ 3.5% (8% - 4.5%) Month Maximum outstanding balance as on last date of month (₹) Perquisite value at 3.5% for the month (₹) April, 2023 15,00,000 4,375 May, 2023 15,00,000 4,375 June, 2023 14,50,000 4,229 July, 2023 14,50,000 4,229 August, 2023 14,50,000 4,229 September, 2023 14,00,000 4,083 October, 2023 14,00,000 4,083 November, 2023 14,00,000 4,083 December, 2023 13,50,000 3,937.50 January, 2024 13,50,000 3,937.50 February, 2024 13,50,000 3,937.50 March, 2024 13,00,000 3,792 Total value of this perquisite 49,290.50 Note: An alternate view possible is that only the sum in excess of 5,000 is taxable. In such a case, the value of perquisite would be - 5,000 and gross salary and net salary would be - 15,17,291 and - 14,67,291, respectively.