2024. Also, he received an arrear salary for the month of March 2023 on the same day. (v) His employer gave him a rent-free accommodation (fully furnished) in Delhi from 01.04.2019. This house is owned by his employer. During the previous year 2019-20, the perquisite value of such rent-free furnished accommodation was valued at ` 39,000. The employer also provided him with the facility of a gardener to maintain this house. The salary of gardener paid by the employer was ` 1,000 p.m. The furniture and appliances provided with the house were bought by the employer at an aggregate cost of ` 1,50,000 on 01.01.2020. Electricity and water bills of ` 4,000 p.m. for the said house were paid by the employer. Cost Inflation Index F.Y. 2019-20-289, F.Y. 2020-21-301, F.Y. 2023-24-348. (vi) The employer also spent ` 50,000 on a refresher course for upgrading Mr. Radhey's skills. (vii) During the previous year his wife had been admitted in a notified hospital for treatment of her kidney disease, the hospital bills amounting to ` 3,50,000 were paid by the employer. You are required to compute the taxable salary income of Mr. Radhey for the Assessment Year 2024-25 assuming that he has opted out of the default tax regime under section 115BAC. (6 Marks)

All Options:

• AComputation of taxable salary of Mr. Radhey for A.Y.2024-25 ` ` Basic Pay [` 35,000 x 10 + ` 40,000 x 2] 4,30,000 Dearness Allowance [` 4,30,000 x 30%] 1,29,000 Leave encashment for P.Y. 2023-24 10,000 Advance salary for April 2024 received on 31.3.2024 [Note - Alternatively, it is possible to assume that the advance salary is inclusive of DA. In such a case, advance salary for April 2024 would be ` 52,000.] 40,000 Arrear salary for March 2023, assumed it is taxed on due basis during the P.Y. 2022-23. -- TAXATION Value of Rent-free accommodation From April 2023 to August 2023 Value of Rent-free accommodation {15% of ` 2,07,515 i.e., [` 1,75,000 (35,000 x 5, basic salary) + ` 28,350 (1,75,000 x 30% x 54%, DA) + 4,167 (10,000/12 x 5, leave encashment]} 31,128 Add: Value of furniture [` 1,50,000 × 10% p.a. for 5 months] 6,250 37,378 From September 2023 to March 2024 Value of Rent-free accommodation {10% of ` 3,02,143 i.e., [` 2,55,000 (35,000 x 5 + 40,000 x 2, basic salary) + ` 41,310 (2,55,000 x 30% x 54%, DA) + 5,833 (10,000/12 x 7, leave encashment]} 30,214 Add: Value of furniture [` 1,50,000 × 10% p.a. for 7 months] 8,750 38,964 76,342 [Note - In the absence of the information of the month in which leave encashment is received, leave encashment is proportionated in 5:7 months period. Alternatively, it is possible to assume that the amount of ` 10,000 is received either during the April to August month or September to March 2024. In such case, perquisite value of rent-free accommodation would undergo a change. Facility of gardener [Salary of gardener paid by the employer would be taxable as perquisite] [` 1,000 x 12] 12,000 Facility of use of electricity [Electricity and water bills paid by the employer would be taxable as perquisite] [` 4,000 x 12] 48,000 Refresher course for upgrading skills [Tax free perquisite] Nil Value of medical treatment [Exempt, since medical treatment for wife is in notified hospital] Nil Gross Salary 7,45,342 Less: Deduction under section 16 - Standard deduction 50,000 Taxable Salary 6,95,342 ✓
• BComputation of Capital Gains of Mr. Raj for A.Y.2024-25 Particulars ` Capital gain on sale of urban agricultural land Actual sale consideration 75,00,000 Stamp duty value as on date of agreement i.e., on 15.7.2023 [Since part consideration is received through IMPS on the date of agreement] 85,00,000 Full Value of Consideration [Stamp duty value on the date of agreement since it exceeds 110% of the actual sale consideration] 85,00,000 Less: Expenditure in connection with transfer [1% of sale consideration i.e., ` 75 lakhs] 75,000 Net Sales Consideration 84,25,000 Less: Indexed cost of acquisition [` 10,85,000 x 348/105] 35,96,000 48,29,000 Less: Exemption u/s 54B – In respect of rural agricultural land purchased on 1.1.2024. Mr. Raj is eligible to claim exemption u/s 54B since he has used the urban agricultural land for agricultural purposes for more than 2 years preceding the date of its transfer. [See Note for alternative answer] 40,00,000 Long term capital gain 8,29,000 Capital gain on sale of rural agricultural land As per section 54B, if the new agricultural land is transferred within 3 years from the date of its purchase, TAXATION while computing the capital gains on transfer of such new agricultural land, the cost of acquisition of such land would be reduced by the amount of capital gain claimed as exempted. However, since rural agricultural is not a capital asset, no capital gain would arise on sale of such land even though it is transferred within 3 years from the date of its purchase. Note [Alternative answer] – Mr. Raj transferred urban agricultural land on 15.12.2023 and purchased rural agricultural land on 1.1.2024 which is sold on 12.3.2024. Since the rural agricultural land is sold within the same previous year in which original asset was transferred i.e., P.Y. 2023-24, a view can be taken that the exemption under section 54B would not be available as at the time of filing return of income such acquired land does not exist. In such case, long term capital gain would be ` 48,29,000.
• C
• D