Question:-1

The gross salary of the employee 'R' for the financial year 2023-24 is ₹11,15,000. Determine the
amount of tax to be deducted at source every month by the employer if R:
(a) opts to be taxed under the old regime.
(b) does not exercise any option and hence by default he is under the new regime, i.e., section
115BAC(1A).

Solution:-
Taxable income under the head salary
opts to be does not
taxed under exercise any
the old option and
regime hence by
default he is
under the new
regime
Rs. Rs.
Gross salary 11,15,000 11,15,000
Less: Standard deduction u/s 16(ia) 50,000 50,000
Taxable salary 10,65,000 10,65,000
Tax on ₹10,65,000/₹10,65,000 1,32,000 69,750
Add: Health & Education Cess @ 4% 5,280 2,790
Tax payable 1,37,280 72,540
Amount of tax to be deducted every month
(1,37,280/12) / (72,540/12) 11,440 6,045

Question:-2
Take the above question and assume the estimated gross salary of 11,15,000 is for 10 months as
the employer joined the service on 1.6.2023. Determine the amount of tax to be deducted at
source every month.

Solution:-
opts to be does not
taxed under exercise any
the old option and
regime hence by
default he is
under the new
regime
 Rs. Rs.
Tax computed as above 1,37,280 72,540
Amount of tax to be deducted every month 13,728 7,254
(1,37,280/10)/(72,540/10)

Question:-3
The income chargeable under the head "Salaries" of an employee "R" for the previous year ending
on 31.3.2024, inclusive of all perquisites is 10,65,000, out of which, ₹1,60,000 is on account of
non-monetary perquisites. The employer opts to pay the tax on such perquisites.
Determine the amount of tax to be deposited by the employer and the tax to be deducted by
employer at source if R:
(a) opts to be taxed under the old regime.
(b) does not exercise any option and hence by default he is under the new regime, i.e., section
115BAC(1A).

Solution:-
opts to be does not
taxed under exercise any
the old option and
regime hence by
default he is
under the new
regime
Rs. Rs.
Income chargeable under the head "Salaries" inclusive of all 10,65,000 10,65,000
perquisites but after claiming standard deduction
Tax (including Health & Education Cess on 1,37,280 72,540
10,65,000/₹10,65,000)
Average Rate of Tax [(1,37,280/10,65,000) X 100] 12.89% 6.811%
[(72,540/10,65,000) × 100]
Tax payable on ₹1,60,000 (12.89% of 1,60,000) (6.811% of 20,624 10,898
1,60,000)
Amount required to be deposited each month (20,624/12) 1,719 908
(10,898/12)
Total tax to be deducted by employer 12.89% on 9,05,000 1,16,656 61,640
(10,65,000 - 1,60,000)/6.811% on 9,05,000
Amount required to be deducted and deposited every 9,721 5,137
month (1,16,656/12)/(61,640/12)
 It may be observed that:-
(a) the value of non-monetary perquisite shall form part of salary of employee.
(b) as per section 10(10CC), ₹20,624/10,898, the tax paid by employer on the non-monetary
perquisites of the employee shall be an exempt income in the hands of the employee and shall
not be treated as income received by the employee as per section 198 Hence, such tax shall
not form part of salary of employee.
(c) tax so paid by the employer shall not be allowed as deduction while computing the
employer's income. [Section 40(a)(v)]
(d) credit of tax so paid by the employer shall be given to the employee while computing his
net tax liability as per section 199(2).

Question:- 4
R was working with X Ltd. on a salary of ₹60,000p.m. He resigned on 31.7.2023 and joined Y Ltd.
w.e.f. 1.8.2023 on a salary of 70,000p.m. Compute the tax deductible by X Ltd. and Y Ltd. assuming
he submitted the details of salary drawn and tax deducted at source by X Ltd. along with a copy
of Form 16 to Y Ltd. on 1.8.2023 itself. Assume 'R'
(a) opts to be taxed under the old regime.
(b) does not exercise any option and hence by default he is under the new regime, i.e.,
section 115BAC(1A).

Solution:-
Tax to be deducted by X Ltd.
opts to be does not
taxed under exercise any
the old option and
regime hence by
default he is
under the new
regime
Rs. Rs.
Salary for the month of April paid in May 4,030 1907
Salary for the month of May paid in June 4,030 1907
Salary for the month of June paid in July 4,030 1907
Salary for the month of July paid on 31st July 2023 Nil** Nil**
Total tax deducted 12,090 5721
* Gross salary ₹60,000 × 12 7,20,000 7,20,000
Less: Standard deduction u/s 16(ia) 50,000 50,000
Taxable Salary 6,70,000 6,70,000
Tax on 6,70,000 46,500 22,000
Add: Health & Education cess @ 4% 1,860 880
 48,360 22,880
Tax deductible p.m. 48,360/12 = 4,030, 22,880/12 = 1907
**The employer has deducted tax at source for the first three months of April to June 2023 by
estimating the salary for the whole year. Since, the employee has resigned on 31.7.2023, there is
no need to deduct tax at source at the time of payment of salary for the month of July 2023 as
already excess amount of tax has been deducted at source, as the total salary from X Ltd. was
only 2,40,000 for the aforesaid four months.

Tax to be deducted by Y Ltd. assuming details of the salary drawn from the previous employer
has been submitted in Form No. 12B
opts to be does not
taxed under exercise any
the old option and
regime hence by
default he is
under the new
regime
Rs. Rs.
Salary drawn from X Ltd. ₹60,000 x 4 2,40,000 2,40,000
Salary to be drawn from Y Ltd. ₹70,000 x 8 5,60,000 5,60,000
Total salary 8,00,000 8,00,000
Less: Standard deduction 50,000 50,000
Taxable salary 7,50,000 7,50,000
Tax on 7,50,000 62,500 30,000
Add: Health & Education cess @ 4% 2,500 1200
65,000 31,200
Less: Tax deducted by X Ltd. [₹4,030 +4,030 +4,030]/1907×3 12,090 5,721
Total tax to be deducted by Y Ltd. 52,910 25,479
Tax to be deducted every month ₹52,910/8/25,479/8 6,614 3,185