In the salary computation, transport allowance appears as
Apart of gross salary
Ba deduction under section 16
Can exempt capital receipt
Da charge on house property
Answer & Solution
Correct answer: A. part of gross salary
1. The computation adds every allowance into gross salary first.
2. Transport allowance is listed among those allowances.
3. So it is added, not deducted, at that stage.
4. Only the three section 16 deductions are subtracted afterwards.
_Source: ICAI Income Tax Law, Ch3 'Heads of Income', Unit 1 'Salaries', section 1.4_
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