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Reddy retires from private services on 30 April 2010 and his pension has been fixed at 6000 per month. He gets ½ of his pension commuted and gets Rs. 300000 in January 2020. He also received Rs. 150000 as gratitude, in all cases pension becomes payable on the 1st day of each month. Calculate taxable pension.?
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Reddy retires from private services on 30 April 2010 and his pension h...
Calculation of Taxable Pension for Reddy
Step 1: Calculation of Total Pension
Reddy's monthly pension = Rs. 6000
As he commuted ½ of his pension, remaining pension = (1 - ½) * 6000 = Rs. 3000
Total pension = commuted amount + remaining pension = Rs. 300000 + Rs. 3000 * 12 * 10 = Rs. 720000
Step 2: Calculation of Exempted Amount
As per the Income Tax Act, 1961, the exempted amount for gratuity received by an employee is the least of the following:
1. Rs. 20 lakhs
2. Gratuity actually received
3. 15 days' salary for each completed year of service or part thereof in excess of 6 months
In Reddy's case, he received gratuity of Rs. 150000. Therefore, the exempted amount will be the least of the following:
1. Rs. 20 lakhs
2. Rs. 150000
3. 15 days' salary for each completed year of service or part thereof in excess of 6 months
Reddy's completed years of service = 30 years
Therefore, 15 days' salary for each completed year of service = (15/26) * monthly pension * completed years of service = (15/26) * 6000 * 30 = Rs. 103846.15
Since Rs. 103846.15 is the least of the above three options, the exempted amount for gratuity will be Rs. 103846.15
Step 3: Calculation of Taxable Pension
Taxable pension = Total pension - Exempted amount for gratuity - Standard deduction
As per the Income Tax Act, 1961, a standard deduction of Rs. 50000 is allowed for pensioners.
Therefore, taxable pension = Rs. 720000 - Rs. 103846.15 - Rs. 50000 = Rs. 566153.85
Conclusion
Reddy's taxable pension is Rs. 566153.85.
Step 1: Calculation of Total Pension
Reddy's monthly pension = Rs. 6000
As he commuted ½ of his pension, remaining pension = (1 - ½) * 6000 = Rs. 3000
Total pension = commuted amount + remaining pension = Rs. 300000 + Rs. 3000 * 12 * 10 = Rs. 720000
Step 2: Calculation of Exempted Amount
As per the Income Tax Act, 1961, the exempted amount for gratuity received by an employee is the least of the following:
1. Rs. 20 lakhs
2. Gratuity actually received
3. 15 days' salary for each completed year of service or part thereof in excess of 6 months
In Reddy's case, he received gratuity of Rs. 150000. Therefore, the exempted amount will be the least of the following:
1. Rs. 20 lakhs
2. Rs. 150000
3. 15 days' salary for each completed year of service or part thereof in excess of 6 months
Reddy's completed years of service = 30 years
Therefore, 15 days' salary for each completed year of service = (15/26) * monthly pension * completed years of service = (15/26) * 6000 * 30 = Rs. 103846.15
Since Rs. 103846.15 is the least of the above three options, the exempted amount for gratuity will be Rs. 103846.15
Step 3: Calculation of Taxable Pension
Taxable pension = Total pension - Exempted amount for gratuity - Standard deduction
As per the Income Tax Act, 1961, a standard deduction of Rs. 50000 is allowed for pensioners.
Therefore, taxable pension = Rs. 720000 - Rs. 103846.15 - Rs. 50000 = Rs. 566153.85
Conclusion
Reddy's taxable pension is Rs. 566153.85.
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Reddy retires from private services on 30 April 2010 and his pension has been fixed at 6000 per month. He gets ½ of his pension commuted and gets Rs. 300000 in January 2020. He also received Rs. 150000 as gratitude, in all cases pension becomes payable on the 1st day of each month. Calculate taxable pension.?
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Reddy retires from private services on 30 April 2010 and his pension has been fixed at 6000 per month. He gets ½ of his pension commuted and gets Rs. 300000 in January 2020. He also received Rs. 150000 as gratitude, in all cases pension becomes payable on the 1st day of each month. Calculate taxable pension.? for B Com 2024 is part of B Com preparation. The Question and answers have been prepared according to the B Com exam syllabus. Information about Reddy retires from private services on 30 April 2010 and his pension has been fixed at 6000 per month. He gets ½ of his pension commuted and gets Rs. 300000 in January 2020. He also received Rs. 150000 as gratitude, in all cases pension becomes payable on the 1st day of each month. Calculate taxable pension.? covers all topics & solutions for B Com 2024 Exam. Find important definitions, questions, meanings, examples, exercises and tests below for Reddy retires from private services on 30 April 2010 and his pension has been fixed at 6000 per month. He gets ½ of his pension commuted and gets Rs. 300000 in January 2020. He also received Rs. 150000 as gratitude, in all cases pension becomes payable on the 1st day of each month. Calculate taxable pension.?.
Reddy retires from private services on 30 April 2010 and his pension has been fixed at 6000 per month. He gets ½ of his pension commuted and gets Rs. 300000 in January 2020. He also received Rs. 150000 as gratitude, in all cases pension becomes payable on the 1st day of each month. Calculate taxable pension.? for B Com 2024 is part of B Com preparation. The Question and answers have been prepared according to the B Com exam syllabus. Information about Reddy retires from private services on 30 April 2010 and his pension has been fixed at 6000 per month. He gets ½ of his pension commuted and gets Rs. 300000 in January 2020. He also received Rs. 150000 as gratitude, in all cases pension becomes payable on the 1st day of each month. Calculate taxable pension.? covers all topics & solutions for B Com 2024 Exam. Find important definitions, questions, meanings, examples, exercises and tests below for Reddy retires from private services on 30 April 2010 and his pension has been fixed at 6000 per month. He gets ½ of his pension commuted and gets Rs. 300000 in January 2020. He also received Rs. 150000 as gratitude, in all cases pension becomes payable on the 1st day of each month. Calculate taxable pension.?.
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Reddy retires from private services on 30 April 2010 and his pension has been fixed at 6000 per month. He gets ½ of his pension commuted and gets Rs. 300000 in January 2020. He also received Rs. 150000 as gratitude, in all cases pension becomes payable on the 1st day of each month. Calculate taxable pension.?, a detailed solution for Reddy retires from private services on 30 April 2010 and his pension has been fixed at 6000 per month. He gets ½ of his pension commuted and gets Rs. 300000 in January 2020. He also received Rs. 150000 as gratitude, in all cases pension becomes payable on the 1st day of each month. Calculate taxable pension.? has been provided alongside types of Reddy retires from private services on 30 April 2010 and his pension has been fixed at 6000 per month. He gets ½ of his pension commuted and gets Rs. 300000 in January 2020. He also received Rs. 150000 as gratitude, in all cases pension becomes payable on the 1st day of each month. Calculate taxable pension.? theory, EduRev gives you an
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