Unit 11: Tax Planning for Employee's Remuneration - Practice Quiz

1 Which of the following is generally treated as a taxable allowance for an employee?

2 House rent allowance is commonly abbreviated as:

3 The exemption of house rent allowance is primarily linked to:

4 A perquisite is best described as:

5 Which of the following is an example of a perquisite?

6 The taxable value of a perquisite is generally determined according to:

7 Which allowance is specifically associated with reimbursement of travel expenses during official duties?

8 An allowance granted to meet personal expenses is generally:

9 Which of the following may be considered while valuing employer-provided accommodation?

10 A benefit provided to an employee in kind may be classified as:

11 Which deduction is allowed from salary under the standard deduction provision?

12 The standard deduction is available to an individual earning:

13 Professional tax paid by an employee is generally deductible from:

14 Entertainment allowance deduction is generally available to:

15 For computing salary income, deductions are normally made from:

16 Which of the following is not normally a deduction from salary income under Section 16?

17 The standard deduction is intended to simplify the calculation of:

18 Which payment is relevant for claiming a deduction from salary under the professional tax provision?

19 Entertainment allowance received by an employee is first included in:

20 Deductions from gross salary help determine:

21 An employee working in Jaipur receives basic salary of ₹6,00,000, dearness allowance forming part of retirement benefits of ₹60,000, and HRA of ₹1,80,000. She pays annual rent of ₹1,50,000. Under the old tax regime, how much HRA is taxable?

22 An employee living in Mumbai receives salary for HRA purposes of ₹8,00,000 and HRA of ₹3,00,000. Annual rent paid is ₹3,60,000. Under the old tax regime, what is the exempt HRA?

23 An employee receives HRA of ₹12,000 per month but lives in a self-owned house and pays no rent. How much of the annual HRA is taxable under the old tax regime?

24 An employee receives children education allowance of ₹600 per month for each of three children throughout the year. Under the old tax regime, how much of the allowance is taxable?

25 An employee receives hostel expenditure allowance of ₹1,000 per month for two children for the entire year. Under the old tax regime, what amount is taxable?

26 A visually impaired employee receives a transport allowance of ₹4,000 per month for commuting between home and office. Assuming the prescribed exemption is ₹3,200 per month, what amount is taxable for the year?

27 An employee receives a uniform allowance of ₹30,000 and spends ₹22,000 on purchasing and maintaining the uniform required for official duties. What amount is taxable?

28 An employee claims leave travel concession for a domestic holiday. The employer reimburses ₹36,000 for air tickets and ₹24,000 for hotel accommodation. Assuming the airfare is fully eligible, what amount qualifies for exemption?

29 An employer pays an annual premium of ₹18,000 under an approved medical insurance policy for an employee. How is this payment generally treated in the employee's salary computation?

30 An employer gives an employee gift vouchers worth ₹8,000 during the financial year. No other gifts are provided. What is the taxable value of the perquisite?

31 An employer grants an interest-free loan of ₹18,000 to an employee, and no other employer loan is outstanding. How is the loan generally treated for perquisite valuation?

32 A government employee is provided unfurnished accommodation by the government. Which amount is generally used as the taxable value of this accommodation?

33 An employer contributes ₹8,40,000 in aggregate to an employee's recognised provident fund, notified pension scheme, and approved superannuation fund during a year. What amount is taxable as a perquisite because of the aggregate contribution limit?

34 An employer provides non-transferable meal vouchers usable only at eating establishments. The vouchers are worth ₹50 per meal for 220 working days, with one meal provided each day. What is the taxable value, assuming all prescribed conditions are met?

35 An employee's professional tax liability for the year is ₹2,500, but only ₹1,800 is actually paid during the year. What deduction is available from salary income?

36 A government employee receives entertainment allowance of ₹30,000. His basic salary is ₹4,00,000. What deduction is available under section 16(ii)?

37 For Assessment Year 2024-25, an employee covered by the old tax regime has gross salary of ₹7,00,000 and no other salary deductions. What is the salary income after the standard deduction?

38 An employer pays professional tax of ₹2,400 on behalf of an employee. Which treatment correctly determines its effect on salary income?

39 A private-sector employee receives entertainment allowance of ₹24,000 and spends the full amount on entertaining business clients. What deduction is available under section 16(ii)?

40 For Assessment Year 2024-25 under the old tax regime, an employee has gross salary of ₹9,00,000 and pays professional tax of ₹2,400. Assuming no entertainment allowance deduction, what is the taxable salary after section 16 deductions?

41 For PY 2024-25, an employee opting for the old tax regime works in Delhi throughout the year. He receives basic salary of ₹9,00,000, dearness allowance forming part of retirement benefits of ₹1,80,000, commission at 1% of turnover of ₹1,20,00,000, and HRA of ₹4,80,000. He pays annual rent of ₹4,20,000. What amount of HRA is exempt under section 10(13A)?

42 An employee under the old regime receives monthly basic salary of ₹80,000, retirement-benefit DA of ₹20,000, and HRA of ₹40,000. During the first six months she occupies rented accommodation in Mumbai at ₹50,000 per month; during the next six months she works and resides in Jaipur at ₹32,000 per month. What is the total HRA exemption for PY 2024-25?

43 For PY 2024-25, a blind employee opting for the new tax regime receives a transport allowance of ₹4,500 per month for commuting between home and office. No amount is spent on official travel. What portion of the allowance is taxable?

44 An employee under the old regime receives a uniform allowance of ₹60,000 and a helper allowance of ₹72,000. She actually spends ₹42,000 on uniforms used exclusively for employment duties and ₹80,000 on a helper engaged exclusively for those duties. What aggregate amount is taxable?

45 Under the old regime, an employee receives children education allowance of ₹300 per month for each of three children and hostel expenditure allowance of ₹500 per month for each of two children. All payments continue for 12 months. What is the taxable amount of these allowances?

46 For PY 2024-25, a private employer provides an owned, furnished house in a city having a 2011 census population of 30 lakh. The employee's relevant salary for Rule 3 is ₹16,00,000. Furniture owned by the employer originally cost ₹4,00,000, and the employee pays rent of ₹3,000 per month. What is the taxable accommodation perquisite for the year?

47 A private employer leases an unfurnished house for ₹3,60,000 annually and provides it to an employee whose relevant salary is ₹30,00,000. The employee pays ₹10,000 per month toward the accommodation. Furniture is separately hired by the employer for ₹48,000 annually. What is the taxable perquisite for PY 2024-25?

48 On transfer, an employee stays in a hotel for 20 days in a 30-day month. Salary for that month, as defined for accommodation valuation, is ₹3,00,000. The employer pays ₹80,000 to the hotel, while the employee reimburses ₹10,000. What is the taxable hotel accommodation perquisite?

49 An employer-owned car with engine capacity above 1.6 litres is available for mixed official and personal use. The employer bears all running expenses and provides a chauffeur. Proper records establish that the car was used wholly for official purposes for two months and for mixed purposes for the remaining ten months. What is the annual taxable perquisite?

50 On 1 April 2024, an employer grants an employee a ₹5,00,000 loan that remains outstanding throughout PY 2024-25. Interest is recovered from the employee at 4% annually. The SBI rate for a comparable loan on 1 April 2024 is 10%. What is the taxable loan perquisite?

51 An employee exercises 600 ESOPs on 15 July 2024 at ₹300 per share. The prescribed fair market value on that date is ₹850 per share. The shares are later sold for ₹1,050 each. What amount is taxable as a salary perquisite at exercise?

52 During PY 2024-25, an employer gives an employee shopping vouchers worth ₹4,800, a household appliance worth ₹4,500, and a cash birthday gift of ₹3,000. No amount is recovered. What aggregate amount is taxable as salary?

53 An employer incurs ₹70,000 on treatment in its own hospital, ₹1,20,000 for a prescribed disease in an approved hospital, ₹45,000 for ordinary treatment in a non-approved private hospital, and ₹30,000 as premium under an approved employee health insurance scheme. What amount is taxable as a medical perquisite?

54 An employer-maintained school provides free education to two children of an employee. The comparable monthly cost is ₹900 for the first child and ₹1,400 for the second child. The facility is provided for 12 months, and the employee pays nothing. What is the taxable education perquisite?

55 During PY 2024-25, an employer contributes ₹4,00,000 to a recognized provident fund, ₹3,00,000 to the employee's NPS account, and ₹2,00,000 to an approved superannuation fund. Ignoring annual accretion, what amount is taxable as a perquisite solely because of the aggregate contribution ceiling?

56 For PY 2024-25, a Central Government employee under the old regime has gross salary of ₹14,00,000, including basic salary of ₹8,00,000 and entertainment allowance of ₹1,20,000. She pays professional tax of ₹2,500. What is the total deduction allowable under section 16?

57 A private-sector employee under the old regime receives cash salary of ₹9,00,000, including entertainment allowance of ₹60,000. In addition, the employer directly pays the employee's professional tax of ₹2,400. What is the taxable salary after section 16 deductions?

58 For PY 2024-25, a government employee opting for the new tax regime has gross salary of ₹12,00,000, including entertainment allowance of ₹80,000, and personally pays professional tax of ₹2,500. What is the taxable salary after section 16 deductions?

59 A private employee under the old regime has gross salary of ₹15,00,000, including entertainment allowance of ₹50,000. He pays professional tax of ₹2,500, contributes ₹1,20,000 to a recognized provident fund, and contributes ₹1,00,000 to NPS. What is his taxable salary before Chapter VI-A deductions?

60 Under the old regime, an employee receives salary of ₹8,00,000 from one employer and ₹6,00,000 from another during PY 2024-25. Both employers independently allow a ₹50,000 standard deduction while computing TDS. The employee pays professional tax of ₹2,500 during the year. What salary income must be reported in the return?