Income Tax Calculation For House Rent Allowance – U/s 10 (13A)

Illustrative calculation of House Rent Allowance U/s 10 (13A) in respect of residential accommodation situated in Delhi in case of an employee below the age of sixty years (With valid PAN furnished to employer).

S.NO.	PARTICULARS	RUPEES
1	Salary	7,00,000
2	Bonus	1,40,000
3	Free gas, electricity, water etc. (Actual bills paid by company)	40,000
4(a)	Flat at concessional rate (for tenmonth).  @Rs.36000/month	3,60, 000
4(b	Hotel rent paid by employer (for two month)	1,00,000
4(c)	Rent recovered from employee.	60,000
4(d)	Cost of furniture.	2,00,000
5	Subscription to Unit Linked Insurance Plan	50,000
6	Life Insurance Premium	10,000
7	Contribution to recognized P.F.	42,000

COMPUTATION OF TOTAL INCOME AND TAX PAID THEREON

S.NO.	PARTICULARS	RUPEES
1	Salary	7,00,000
2	Bonus	1,40,000
3	Total Salary(1+2) for Valuation of Perquisites	8,40,000
VALUATION OF PERQUISITES
4(a)	Perquisite for flat: Lower of (15% of salary for 10 months=Rs.1,05,000/-) and (actual rent paid= Rs 3,60,000) i.e. Rs. 1,05,000	1,38,600
4(b)	Perquisite for hotel : Lower of (24% of salary of 2 months=Rs 33,600) and (actual payment= Rs 1,00,000) i.e. Rs 33,600
4(c)	Perquisites for furniture(Rs.2,00,000) @ 10% of cost     Rs. 20,000
4(c)(i)	Total of [4(a)+(b)+(c)] (1,05,000+ 33,600+ 20,000)Rs.158,600 Less: rent recovered  (-)Rs 60,000    =     98600
4(d)	Add Perquisite for free gas, electricity, water etc. Rs.40,000 (+) Rs 98,600 [4(c)(i)] = Rs1,38,600Total perquisites
5	Gross Total Income (Rs.8,40,000+ 1,38,600)	9,78,600
6	GROSS TOTAL INCOME	9,78,600
7	Less: Deduction U/s 80C: (i).  Provident Fund (80C) 42,000 (ii).  LIC (80C)
	:10,000 (iii). Subscription to Unit Linked Insurance Plan(80C) :50,000/- Total                                                x 1,02,000 Restricted to Rs 1,02,000 u/s 80C		1,02,000
8	Total Income		8,76,600
9	Tax Payable		87,820
10	Add:
	(i).Education Cess @2%	1756
	(ii). Secondary and Higher Education Cess @1%		878
11	Total Income Tax payable		90,454
12	Rounded off to		90,450