FORMAT INCOME FROM SALARY

1. Dr.E.RAMAPRABA,
ASSISTANT PROFESSOR OF COMMERCE
BON SECOURS COLLEGE FOR WOMEN,
THANJAVUR.
SPECIMAN OF INCOME FROM SALARY
PARTICULARS AMOUNT
Basic salary/ pay wages/ remuneration
Special Pay
Pension Annuity
Bonus[Statutory/ Gratuitous]
Fees
Commission
Advance Salary
Leave Salary[received in service is fully taxable]
2. ALLOWANCES
I. Fully Taxable Allowance
1. Dearness allowances (or) Pay/ Cost of living allowances (or)
interim relief allowance
2. City/ Capital compensatory Allowance
3. Project Allowance
4. Fixed medical allowance
5. Tiffin Allowance
6. Servant Allowance
7. Non- practicing Allowance
8. Wardnership/ Proctor Allowance
9. Deputation[Substitute] Allowance
10. Overtime Allowance
11. Marriage Allowance
12. Family Allowance
13. Lunch/ Dinner/ Refreshment Allowance
14. Special Allowance
15. Holiday Allowance
II. Partly Exempted/ Taxable Allowance
1. House rent Allowance[HRA]
XXX
XXX
XXX
XXX
XXX
XXX
XXX
XXX
XXX
XXX
XXX
XXX
XXX
XXX
XXX
XXX
XXX
XXX
XXX
XXX
XXX
XXX
XXX

2. How to calculate Taxable / Exempted
Actual HRA
Less: Exempted HRA
Taxable HRA
XXX
XXX
XXX
Least of the following
exempted
1. Actual HRA received
2. Rent paid - 10% of salary
3. 40% or 50% of salary*
Whichever less is exempted
xxx
xxx
xxx
XXX
Workings. No. 1
Salary Calculation:
 Salary = Basic salary+ D.A[forming parts]+ fixed percentages[%] of commission.
Note:
 50% of salary is to be considered in case of Delhi, Madurai, Kolkata & Chennai and
40% in other.
 10% of Salary
2. Entertainment Allowance[EA](Gross)
Note:
 Entertainment allowance [EA] should be taken at Gross Value while calculating
gross salary.
 Deduction u/s 16(ii) is to be given for the Exempted Amount of EA from gross
salary.
HOW TO CALCULATE EXEMPTION FOR ENTERTAINMENT
ALLOWANCE
For Government Employees
[Central/ State]
For non- Government Employees
[Central/ State]
Least of the following exempted
1. Actual EA received
2. Absolute limit
3. 20% or 1/5th
of Basis
Salary
Whichever less is exempted u/s
Rs
xxx
5000
xxx
No deduction U/S 16(ii)
So full[Gross] amount is taxable
Rs

3. 16 (ii)
Note: Only basic salary / pay to be considered.
3. Hill Allowance (Rs. 300 per month to Rs. 7000 per month) XXX
4. Tribal Areas / Schedule Areas Allowance (Rs. 200 per month) XXX
5. Education Allowance (Rs. 100 per month per child only 2 childrens) XXX
6. Hostal Allowance (Rs. 300 per month per child only 2 childrens ) XXX
7. Allowance for transport of employees XXX
8. Transport Allowance XXX
9. Underground Allowance XXX
10. High altitude Allowance XXX
11. Highly altitude Allowance XXX
12. Island duty allowance XXX
Actual amount spent details
1. Academic Research Allowance
2. Travelling Allowance / Transfer Allowance
3. Conveyance Allowance
4. Daily Allowance
5. Uniform Allowance
6. Washing Allowance
7. Helper Allowance
Note
If nothing is mentioned take the full amount as actually spent.
XXX
XXX
XXX
XXX
XXX
XXX
XXX
III. Fully Exempted Allowance
i. Foreign allowance [to a government for service outside india] XXX
ii. Allowance [Sumptuary allowanced] to high court judge and

4. Supreme Court judge. XXX
iii. Out-of-pocket or outfit allowance of NCC officers XXX
iv. Allowance to employee of UNO [United Nation Organization] XXX
v. Transport / Sumptuary allowance to UPSC chairman / members XXX
vi. Allowance received by a professor from SAARC member takes XXX
3) PERQUSITIES
1) Taxable for all (Specified and unspecified)
Perk:1 Unfurnished house – a. Government Employee
b. Private employee XXX
In case of state / central government employees
Rent fixed – license fee fixed ass per government rules.
UNFURNISHED HOUSE : Private Employee [RFH Table No: 1]
City population as
per 2001census
House owned by
employer
House taken on lease or rent by
employer Amount
Population
exceeding 25 Lakhs
15% of salary
Taxable
A) Lease rent [Paid / Payable]
B) 15% of Salary
Whichever is less is taxable
XXX
XXX
Population
exceeding 10 Lakhs
but upto 25 Lakhs
10% of salary
taxable
A) Lease rent
B) 10% of Salary
Whichever is less is taxable
XXX
XXX
Others 7.5% of salary
taxable
Lease rent
7.5% of salary
Whichever is less is taxable
XXX
XXX
FURNISHED HOUSE : Private Employee [RFH Table No: 2]
Particulars Rs
Value of unfurnished house[Actual calculation’s ans]
ADD: 10% of cost furnished
Taxable value of furnished house
XXX
XXX
Xxx
NOTE:
 If furnished is owned by the employee
 Furnisher includes radio, TV, Refrigerator, AC and other house hold.
Perk:2 House at concessional rent provided by employer
Particular Rs
Value of rent free house
LESS:Rent charged by the employer
Taxable value of perquisite
XXX
XXX
XXX

5. i) Obligation of employee paid by employer club bill, hostel bill, LIC premium, IT,
water, gas, electricity bill, legal expenses paid by employer.
ii) Any other fringe benefits
Perk 3: FREE MEAL
1. Taxable if the meal amount is above Rs. 50
2. Food provided in remote area is not taxable
3. Provided in office hours and workplace is taxed
4. Gift in kind is taxed if existed Rs 5,000 gift in cash or gift checks fully
taxable.
Perk 4: GIFT
a) Gift-in-kind is taxed if exceeds Rs 5,000
b) Gift-in-cash or gift cheques are Fully Taxed.
Perk 5: CREDIT CARD
Particular Rs
Expenditure incurred by the employer but for
the card used by the employee
LESS: Official purpose expenses
Recovered amount from employee
Taxable value of Perquisities
XXX
XXX
XXX XXX
XXX
Perk 6: Club facility
Perk 7: Use of movable assets [Other than laptops and computers]
Particulars Amount
10% p.a of actual cost (or) Amount paid or charged by the employer
Less: Amount paid or recovered from the employee
Taxable Value
XXX
XXX
XXX
Perk 8: Interest free loans:
Doesn’t exceed Rs. 20,000
Interest free or concessional loan made available to an employee during the previous
year by the employer will be based on the rate charged per annum by SBI, as on the first day
of the relavant previous year. Interest is calculated on the maximum outstanding monthly
balance as reduced by the interest actually paid by the employee.
It is not chargeable to tax in the following case;
 If loan is for medical treatment in respect of diseases specified in rule 3A
 If loan amount does not exceed Rs. 20,000 in agreement (petty loan).

6. Perquisities: Taxable for specified employees only
Perk SP-E No 1: Use of moveable asset except computers and laptops XXX
Particulars Amount
10% of actual cost (or) amount cost (or)
charge by the employer
LESS: Amount recovered from the
employer
Taxable Value of perquisites
XXX
XXX
XXX
 Interest free loans(Does not exceed Rs 20,000)
2) Exempted for all [specified employees only]
i. Motor car
1. Motor car owned by employer to employee:
Official use
only
Private / Personal use only Particulars (Upto
1600cc)
Small
car
(Above
1600cc)
Big car
Fully Exempted Actual Expences XXX
LESS:
Amount received from
employee XXX
Taxable value XXX
1. When
expenses are
met by
employer
2. When
expenses are
met by
employee
Rs. 1800
per
month
Rs. 600
per
month
Rs. 2400
per month.
Rs.900 per
month
2. Motor car owned by employee himself:
I. When expense are met by the employer
1. Used for official purpose- full exempted.
2. Used for private purpose:
Paticulars Amount

7. Actual Expenses
LESS:
Amount received from employee
Taxable value
XXX
XXX
XXX
3. Both Private and Official use:
Particular Amount
Actual expenditure
Less: Amount as per the above table [1,800/2,400 as the case may be in point
c(1)]
Less: Amount received from employee
Taxable Perquisites
XXX
XXX
XXX
XXX
XXX
Taxable:
Actual Expenditure – Amount calculated as per the above table amount received from
employee.
II. Expenses are met by employee:
Note:
Driver salary Rs.900 per month should be taxed for employee
Expenses means maintenance charge, Repairs charges, Depreciation.
Perk SP-E No 2 : Domestic servants XXX
Perk SP-E No 3 : Free supply of water, gas, electricity XXX
Perk SP-E No 4 : Free transport XXX

8. III. PERQUISITIE FOR ALL SPECIFIED & UNSPECIFIED:
Exempted list
Taxable for all (specified
and unspecified)
Taxable for
specified
employees only
Exempted for all (specified
and unspecified with
certain limits)

9. 1.Rent free house
a) Furnished house
b) Unfurnished house
2.House at concessional rent
3. Any obligation of
employee paid by employer
4. Any amount paid by
employer to effect an
assurance on the life of
employee
5. Free meal
6. Gift
7. club facility
8. Credit card and add on
card
9. Use of movable assets
exempt computers and
laptops
10. Interest free loans
1. Motor car *
2. Domestic
servants
a) Watchman
b) Gardner
c) Sweeper
d) Any
personal
attendant
e) Cook
3. Supply of gas,
electricity or water
4. Education
facility
5. Transport
facility[Other than
railways and
airlines]
1. Medical Facilities:-
a) Free Medical Facility
- Fully exemption
b) Reimbursement
i. Approved/
Government/
employer
hospital- Fully
exemption
ii. Private
Hospital Upto
Rs 15,000
c) Medical facility
outside India – as
permitted by RBI*
2. Interest free /
concessional loan – Loan
amount not exceeding Rs
20,000
3. Interest free loan for
medical treatment of the
nature given in rule 3A –
Full amount is exempted.
d) Medical facility outside india
** Medical treatment of an employee or any family member of an employee
is exempted to the extent specified by RBI.
SPECIAL ITEMS 1: Provident fund
Sl
No.
Particulars SPF RPF URPF PPF
1 Employee Deduction U/S Deduction U/S Deduction U/S 80C Deduction

10. contribution 80C in full 80C in full it is not given U/S 80C in
full
2 Employers
contribution
Full amount-
Fully
Exempted
Employers
contribution over
12% of
employers
salary** taxable
Not taxable There will be
no
contribution
3 Interest Fully
exempted
Interest over 9.5
is taxable[Rule
6(b) of part –
A(iv) schedule]
(notified rate)
Not taxable Not taxable
4 Lump sum
amount
received on
retirement
Not taxable Exempted in
some case
1. Employee
contribution not
taxable
2. Interest on
employers
contribution
Income from
sources
3. Employers
contribution and
interest on it -
Taxable as salary
Not taxable
SPF= Statutory Provident Fund; RPF= Recognized Provident Fund
URPF= Un Recognised Provident Fund; PPF= Public Provident Fund
SPECIAL ITEMS 2: Gratuity
1. Government Employee
(a) Fully Exempted
2. Non Government Employee
(a) Employee Covered by payment of gratuity Act 1972
(b) Employee Not Covered by payment of gratuity Act 1972
For Employee Covered by
payment of gratuity Act
1972**
Rs
For Employee Not Covered by
payment of gratuity Act 1972 RS
Least of the following exempted:
1) Actual gratuity received
2) Limit[During whole life
3) 15days** salary** For
every year of completed
service.
Whichever less is exempted
XXX
10,00,000
XXX
1) Actual gratuity received
2) Limit [During whole life]
3) ½ months average
salary**
For every year of completed
service
Whichever less is exempted
XXX
10,00,000
XXX
SPECIAL ITEMS 3: COMMUTED PENSION
Government employee Non-Government employee

11. Fully Exempted 1. Received with gratuity 1/3 of full pension
is exempted
2. Received without gratuity ½ of full
pension is exempted
SPECIAL ITEMS 4: Encashment of earned leave
For government
servants(Central/State)
For Non-Government servants(including local
authority and public sector undertaking)
Rs
Not Taxable Least of the following exempted:
1) Actual leave salary received
2) 10 months average salary(AS)
3) Absolute limit salary** for unutilized
eligible leave (Consider 30 days per year)
4) Fraction service to be omitted
5) Salary = Average salary
XXX
XXX
3,00,000
XXX
XXX
NOTE:
1) Leave encashment will be fully taxable if received during services.
2) Exempted only at the time retirement, super anuation of resignation
3) In case leave encashment is given to legal heirs of deleased employee, it will not be
taxed under the salary:
If the company gives less than 30 days then that should be considered.
Gross Salary XXX
Deduction u/s 16
I. Standard deduction XXX
II. Entertainment allowances (exempted amount) XXX
III. Tax on employment (or) professional Tax XXX
Income From Salary (Net Salary) XXX
SIMPLE FORMAT TO COMPUTE SALARY INCOME

12. Basic Items
1. Basic salary/wages/remuneration/pay
2. Special pay
3. Bonus[gratuitous/statutory]
4. Fees
5. Commission
6. Advance salary
7. Arrear salary
Xxx
Xxx
Xxx
Xxx
Xxx
Xxx
Xxx
Allowances
1. Fully taxable allowance
2. Partly taxable/ partly exempted allowances
3. Fully exempted allowances
Xxx
Xxx
Xxx
Perquisities
1. Taxable for all[specified and unspecified]
2. Taxable for specified employees only
3. Exempted for all [specified and unspecified]
Xxx
Xxx
Xxx
Special Items
1. Gratuity
2. Pension
3. Leave encashment
4. Provident fund
Xxx
Xxx
Xxx
Xxx
Gross Salary XXX
Deduction u/s 16
i. Standard deduction
ii. Entertainment allowance xxx
iii. Professional / employment tax xxx
XXX
Income from Salary XXX