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CA Intermediate · Taxation · Salaries

Mr. Dev Malhotra, a resident employee of a Pune firm, opts for the default (new) tax regime for tax year 2026-27. His salary details for the year are: basic salary Rs 8,00,000, dearness allowance Rs 1,00,000, house rent allowance Rs 1,80,000 (of which Rs 80,000 would have been exempt under the old regime), bonus Rs 50,000. Professional tax of Rs 2,400 was deducted from his salary. What is his income under the head Salaries, taking the standard deduction as Rs 75,000?

His salary income is Rs 10,55,000. Gross salary is Rs 11,30,000 including HRA and bonus. Under the new tax regime, HRA exemption and the professional tax deduction are not available, and only the standard deduction of Rs 75,000 is allowed, leaving Rs 10,55,000.

  1. ARs 10,55,000Correct
  2. BRs 10,52,600
  3. CRs 9,75,000
  4. DRs 11,30,000

Explanation

Gross salary = 8,00,000 + 1,00,000 + 1,80,000 + 50,000 = Rs 11,30,000. Under the new regime HRA exemption and the deduction for professional tax are not allowed; only the standard deduction of Rs 75,000 is. Income = 11,30,000 - 75,000 = Rs 10,55,000. Deducting professional tax gives Rs 10,52,600, and allowing HRA exemption gives Rs 9,75,000, both of which are wrong in the new regime.

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