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CA Intermediate · Taxation · Salaries

Ms. Kavya Rao, a resident employee, was paid a salary of Rs 30,000 per month for tax year 2026-27 and a bonus of Rs 60,000 in March 2027. In March 2027 she also received Rs 20,000 as arrears of salary relating to an earlier tax year, which was not taxed earlier. Under the new tax regime, with the standard deduction of Rs 75,000 and no other income, what is her income under the head Salaries?

Income from salaries is Rs 3,65,000. Gross salary of Rs 4,40,000 includes annual salary, bonus and arrears taxable on receipt, and the standard deduction of Rs 75,000 under the new regime is then subtracted to reach the net figure.

  1. ARs 3,65,000Correct
  2. BRs 3,45,000
  3. CRs 4,05,000
  4. DRs 3,85,000

Explanation

Salary Rs 30,000 x 12 = 3,60,000. Add bonus 60,000 = 4,20,000. Arrears of Rs 20,000 are taxable in the year of receipt, giving 4,40,000. Less standard deduction 75,000 = 3,65,000. Rs 3,45,000 wrongly omits the arrears; Rs 4,05,000 does not deduct standard deduction correctly.

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