Mr. Sanjeev is working in a concern. His basic pay is Rs. 6,000 p.m. and dearness pay at 10% of basic pay. Commission based on fixed percentage of turnover Rs. 25,000 for the whole year. House rent allowance is Rs. 1,200 p.m. and actual rent paid by him Rs. 1,000 p.m. House is situated in Lucknow. Compute taxable House rent allowance.

To compute the taxable House rent allowance, we need to calculate the following:

1. The total amount of House Rent Allowance (HRA) received by Mr. Sanjeev per year.
2. The actual amount of rent paid by Mr. Sanjeev per year.
3. The amount of HRA exempt from tax.

Let’s calculate each of these:

1. The total amount of HRA received by Mr. Sanjeev per year:
HRA per month = Rs. 1,200
HRA per year = HRA per month x 12 = Rs. 14,400

2. The actual amount of rent paid by Mr. Sanjeev per year:
Rent per month = Rs. 1,000
Rent per year = Rent per month x 12 = Rs. 12,000

3. The amount of HRA exempt from tax:
The calculation for HRA exemption involves considering the lowest value among the following three amounts:
a. Actual HRA received
b. 50% of basic pay for those living in metro cities (40% for non-metro cities)
c. Actual rent paid minus 10% of basic pay

In this case, Mr. Sanjeev’s house is located in Lucknow, which is not considered a metro city.

a. Actual HRA received = Rs. 14,400
b. 40% of basic pay = 40/100 x Rs. 6,000 = Rs. 2,400
c. Actual rent paid minus 10% of basic pay = Rs. 12,000 – (10/100 x Rs. 6,000) = Rs. 6,000

The least of the above three amounts is Rs. 6,000. Therefore, Rs. 6,000 is exempt from tax, and the remaining Rs. 8,400 (Rs. 14,400 – Rs. 6,000) is taxable.

Therefore, the taxable House Rent Allowance for Mr. Sanjeev is Rs. 8,400 per year.