Income from Salary
Definition of Salary
According to section 2(58)
a) any wages;
b) any annuity, pension or gratuity;
c) any fees, commission, allowances, perquisites or profits in lieu of,
or in addition to salary or wages;
d) any advance of salary;
e) any leave encashment.
Basic Salary
Whole amount of annual earnings will be considered as
income.
Explanation 1 :
If the basic salary of Mr. X is Tk. 10,000 per month, Total annual
basic salary of (10,000 12) Tk.1,20,000 will be included as a part of
total income.
Explanation 2 :
If Mr. X has withdrawn monthly salary of Tk.7,000 on June 2010 in
the scale of Tk. 6,000-200-10,000 and his date of yearly salary
increment falls on March 1; calculate his basic salary for the income
year 20010 – 11.
Quick Check
On June 2011, Mr. Anil Ambani’s basic salary falls
on Tk. 10,200 in the scale of 9600 – 200 X 12 – 12000.
His date of yearly increment is on 1st April. His basic
salary is:
A. 1,20,600
B. 1,02,600
C. 1,00,600
D. 1,60,200
E. None of the above
Quick Check
On June 2011, Mr. Anil Ambani’s basic salary falls
on Tk. 10,200 in the scale of 9600 – 200 X 12 – 12000.
His date of yearly increment is on 1st April. His basic
salary is:
A. 1,20,600
B. 1,02,600
C. 1,00,600
D. 1,60,200
E. None of the above
Bonus
The total amount of bonus is taxable and therefore
included under the head of income from salary.
Explanation:
If the basic salary of Mr. X is Tk. 10,000 per month and he
is given two festival bonus equal to two month’s basic
salary, the amount of total bonus = 10000 X 2 = 20000 Tk.
Medical Allowance
Amount that exceeds actual spending for such purpose will be
considered as income.
Explanation:
If Mr. X is given Tk. 4,000 as medical allowance in a year and his
actual medical expense is Tk. 3,700; then only the amount exceeding
the actual expenditure i.e. (4,000-3,700 = Tk. 300 will be added with
salary.
If no information is given regarding the actual medical expenditure, an
assessee can assume that the full amount has been spent and thus deduct
the total amount from the medical allowance.
Quick Check
Mr. Ambani is paid 300tk per month as medical
allowance. During the year his actual medical
expense was Tk. 3,000. How much should he show
as me medical allowance while calculating total
income:
A. 3,600
B. 3,000
C. 300
D. 600
E. None of the above
Quick Check
Mr. Ambani is paid 300tk per month as medical
allowance. During the year his actual medical
expense was Tk. 3,000. How much should he show
as me medical allowance while calculating total
income:
A. 3,600
B. 3,000
C. 300
D. 600
E. None of the above
House Rent Allowance
amount exceeding 50% of basic salary or Tk. 15,000 per month
(annually Tk. 1,80,000) whichever is lower, shall be added with
salary.
Situation 1:
Mr. X is paid monthly Tk. 20,000 as basic salary and he is also given
60% of basic salary as house rent allowance.
Situation 2:
Mr. X is paid monthly Tk. 32,000 as basic salary and he is also given
60% of basic salary as house rent allowance
Quick Check
Mr. Rahman’s basic salary is Tk. 20,000 per month.
He receives 40% of his basic salary as house rent
allowance. Calculate his house rent allowance:
A. 0
B. 96,000
C. 1,20,000
D. 1,80,000
E. None of the above
Quick Check
Mr. Rahman’s basic salary is Tk. 20,000 per month.
He receives 40% of his basic salary as house rent
allowance. Calculate his house rent allowance:
A. 0
B. 96,000
C. 1,20,000
D. 1,80,000
E. None of the above
Rent Free Accommodation
the rental value of the accommodation or 25% of the
basic salary, whichever is less, shall be added with
salary income.
Mr. X is paid monthly Tk. 50,000 as basic salary and he
has also been provided with a rent-free accommodation
which has an annual rental value of Tk. 1,00,000. How
much of rent free accommodation will be added with
salary?
Quick Check
Mr. Rana is paid monthly Tk. 35,000 as basic salary and he
has also been provided with a rent-free accommodation
which has a monthly rental value of Tk. 15,000. How
much of rent free accommodation will be added with
salary?
A. 1,05,000
B. 1,50,000
C. 1,80,000
D. 1,08,000
E. None of the above
Quick Check
Mr. Rana is paid monthly Tk. 35,000 as basic salary and he
has also been provided with a rent-free accommodation
which has a monthly rental value of Tk. 15,000. How
much of rent free accommodation will be added with
salary?
A. 1,05,000
B. 1,50,000
C. 1,80,000
D. 1,08,000
E. None of the above
Accommodation at Concession Rate
the rental value of the accommodation or 25% of the basic salary,
whichever is less, shall be added with salary income but after
adjusting employee’s contribution as rent.
Mr. X is paid monthly Tk. 20,000 as basic salary and he has also been
provided with an accommodation at a concession rate that has an
annual rental value of Tk. 1,20,000. He bears rent of Tk. 2,000 per
month. How much of accommodation will be added with salary?
Conveyance Allowance Received in Cash
amount exceeding Tk. 24,000 annually will be added
with salary
Explanation:
Mr. X is an employee of Grameen Phone and he is given
Tk. 3,000 per month as conveyance allowance. How
much of conveyance allowance will be added with salary
income?
Conveyance Facilities for Personal Use
7.5% of the basic salary will be added with salary income.
Explanation 1:
Mr. X is paid monthly Tk. 20,000 as basic salary and he has also been
provided with a conveyance facility for both personal and official
use. Annual maintenance cost Tk. 2,000 has borne by the employer.
How much will be added with salary income for such benefit?
Additional Conveyance Allowance Along with
Conveyance Facility
Both 7.5% of basic salary and conveyance allowance given in cash
will be added with salary income.
Explanation: Mr. X is paid monthly Tk. 20,000 as basic salary and he has also
been provided with a conveyance facility for only for official use. In addition
to this he is also given Tk. 500 monthly as conveyance allowance. Annual
maintenance cost of Tk. 3000 was bone by Mr. X. How much will be added
with salary income for such benefit?
Quick Check
Mr. X is paid monthly Tk. 20,000 as basic salary and he
has also been provided with a conveyance facility for
only for official use. How much will be added with
salary income for such benefit?
A. 2,40,000
B. 18,000
C. 20,000
D. 50,000
E. None of the above
Quick Check
Mr. X is paid monthly Tk. 20,000 as basic salary and he
has also been provided with a conveyance facility for
only for official use. How much will be added with
salary income for such benefit?
A. 2,40,000
B. 18,000
C. 20,000
D. 50,000
E. None of the above
RPF
Only the employer’s contribution will be added with salary, not the
employee’s contribution
Mr. X is paid monthly Tk. 20,000 as basic salary and he also
contributes 10% of his basic salary to a recognized provident fund.
His employer also contributes the same amount .In this case, the
amount that will be recorded under the head salary will be:
Employer’s contribution to R.P.F. (2,40,00010%)24,000
Interest on RPF
Interest exceeding 14.5% rate or 1/3rd of basic salary
(whichever is lower) will be added with salary.
Mr. X is paid monthly Tk. 5,000 as basic salary and he
has also received Tk. 7,200 as 18% interest on recognized
provident fund. How much of interest will be added with
salary income?
Quick Check
Mr. X is paid monthly Tk. 7,500 as basic salary and he
has also received Tk. 9,000 as 18% interest on recognized
provident fund. How much of interest will be added
with salary income?
A. 8,000
B. 7,500
C. 9,000
D. 7,250
E. None of the above
Quick Check
Mr. X is paid monthly Tk. 7,500 as basic salary and he
has also received Tk. 9,000 as 18% interest on recognized
provident fund. How much of interest will be added
with salary income?
A. 7,250
B. 7,500
C. 9,000
D. 1,750
E. None of the above
