Calculation Of Income Tax Assessment Year 2018-19 – Medical Treatment Expenditure

Example 3

For Assessment Year 2018-19

Calculation of Income Tax in the case of an employee below age of sixty years where medical treatment expenditure was borne by the employer (With valid PAN furnished to employer).

S.NO.	PARTICULARS	RUPEES
1	Gross Salary	5,20,000
2	Medical Reimbursement by employer on the treatment of self and dependent family member	35,000
3	Contribution of GPF	20,000
4	LIC Premium	20,000
5	Repayment of House Building Advance	25,000
6	Tuition fees for two children	60,000
7	Investment in Unit-Linked Insurance Plan	30,000
8	Interest Income on Savings Account	8,000
9	Interest Income on Time Deposit	15,000

Computation of Tax

S.NO.	PARTICULARS	RUPEES
1	Gross Salary	5,20,000
2	Add: Perquisite in respect of reimbursement of Medical Expenses In excess of Rs.15,000/- in view of Section 17(2)(v)	20,000
3	Income from Other Sourcesi)               Interest Income on Savings Account Rs 8,000 ii)             Interest Income on Time Deposit Rs 15,000	23,000
4	Gross Total Income	5,63,000
5	a. Less: Deduction U/s 80C
	(i) GPF
	Rs.20,000/-
	(ii) LIC
	Rs.20,000/-
	(iii) Repayment of House Building Advance
	Rs.25,000/-
	(iv) Tuition fees for two children
	Rs.60,000/-
	(v) Investment in Unit-Linked Insurance Plan
	Rs.30,000/-
	Total           =Rs.1,55,000/-
		1,58,000
	Restricted to Rs. 1,50,000/-
	b. Less: Deduction u/s 80TTA on Interest Income on
	savings account (restricted to Rs 8000/- – available only
	on Savings account interest) Rs 8000
	Total deduction available Rs 1,58,000/-
6	Total Income	4,05,000
7	Income Tax thereon/payable	7,750
8	Add:
	(i).    Education Cess @2% (ii).    Secondary and Higher Education Cess @1%	155 78
9	Total Income Tax payable	7983
10	Rounded off to	7980

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