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CA Intermediate · Taxation · Salaries

Mr. Rohan Mehta, an employee of a private company in Pune, received during tax year 2026-27 a basic salary of Rs 6,00,000, dearness allowance (forming part of retirement benefits) of Rs 1,20,000 and a bonus of Rs 50,000. He also received Rs 30,000 as reimbursement of his personal medical bills for self, which is not covered by any exemption. What is his income chargeable under the head Salaries before standard deduction?

The income is Rs 8,00,000. Basic salary, dearness allowance, bonus and the taxable medical reimbursement are all salary receipts, so they total 6,00,000 + 1,20,000 + 50,000 + 30,000. Excluding the reimbursement would understate salary by Rs 30,000.

  1. ARs 7,70,000
  2. BRs 8,00,000Correct
  3. CRs 7,20,000
  4. DRs 6,50,000

Explanation

All items are taxable salary: 6,00,000 + 1,20,000 + 50,000 + 30,000 = Rs 8,00,000. Medical reimbursement not covered by an exemption is a taxable perquisite. Rs 7,70,000 wrongly excludes the medical reimbursement.

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