Question Description Determine taxable income of Mr. Anonymous in the light of following particulars pertaining to tax year 2023.
Rs.
1 Monthly basic salary 300,000
2 Conveyance provided for personal use
Value of car purchased by the employer 7,500,000
3 Medical allowance 150,000
SOLUTION
To determine the taxable income of Mr. Anonymous for the tax year 2023, we need to consider the following particulars:
Monthly basic salary: Rs. 300,000
The monthly basic salary is fully taxable as it is considered part of the individual's income. Therefore, for the entire tax year, the total basic salary would be: 300,000 * 12 = Rs. 3,600,000.
Conveyance provided for personal use: Value of car purchased by the employer - Rs. 7,500,000
The conveyance provided for personal use, in this case, is the value of the car purchased by the employer. According to tax regulations, the taxable value of a company car provided for personal use is determined based on certain factors, such as the value of the car, its engine capacity, and the usage ratio for personal and official purposes.
Assuming that the car is used solely for personal purposes, the taxable value of the conveyance would be calculated based on a prescribed percentage. Let's assume a prescribed percentage of 10% for the car's value.
Taxable value of the conveyance provided: 10% of 7,500,000 = Rs. 750,000
Medical allowance: Rs. 150,000
Medical allowance is typically exempt from taxation up to a certain limit set by the tax authorities. Assuming that the medical allowance falls within the exempted limit, it would not be included in the taxable income.
Now, let's calculate the taxable income for Mr. Anonymous:
Total Income = Basic Salary + Taxable Value of Conveyance
Total Income = 3,600,000 + 750,000 = Rs. 4,350,000
Therefore, the taxable income for Mr. Anonymous for the tax year 2023 is Rs. 4,350,000. It's important to note that this calculation only considers the given particulars, and there may be other factors or deductions that need to be taken into account when determining the final tax liability.
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