Wednesday, March 06, 2013

Dibrugarh University - Direct Tax Law' 2011 (Solved)


Residential Accomodation Provided by employer:

For govt. employee: License fees fixed by government + 10% of cost of furniture or hire charges – amount recovered from employee.

For non. Government employee:
Population
Owned by employer
Hired by employer
If population is < 10 lakhs
If population is >10 lakhs but < 25 lakhs
If population is> 25 lakhs
7.5% of salary
10% of salary
15% of salary
Actual hire charges or 15% of salary whichever is less.
If furnished
Add 10% of cost or hire charges
Add 10% of cost or hire charges
If concessional house
Deduct amount recovered from employee
Deduct amount recovered from employee
Hotel accomodation (more than 15 days)
24% of salary or actual expenses whichever is lower
24% of salary or actual expenses whichever is lower
Meaning of salary
Basic + DP + DA which enters + fee + commision of all types + statutory bonus + all fully taxable allowance + salary in lieu of leave for current year but does not include arrears advance perquisites, provident fund excess, gratuitous bonus.

Capital Receipts
A receipt in lieu of source of income is a capital receipt. For e.g., Compensation for the loss of employment is a capital receipt. Capital receipt is generally referable to fixed capital. For e.g., Sale price on the sale of assets, which assessee uses as a fixed asset in his business is a capital receipt. Capital receipts are never taxable. That‟s why amount received from insurance company at the time of maturity is not taxed under Section 10(10D). Similarly loan taken is also not taxed. However, some of the capital receipts are taxable since they have been specifically provided in the definition of Income such as tax on Capital gains on sale of Capital asset.