CAF-2 · Chapter 5 · Question 9 of 10
Mr. Ali receives a basic salary of Rs. 2,000,000 per annum and a medical allowance of Rs. 250,000 per annum. His employer does NOT provide any free medical facility. What is his taxable medical allowance?
Test yourself: pick an answer
Reveal answer & explanation
Correct answer: C) C) Rs. 50,000
Explanation
Medical allowance is exempt up to 10% of the basic salary (10% of 2,000,000 = Rs. 200,000). The remaining amount (Rs. 250,000 - Rs. 200,000) of Rs. 50,000 is taxable.
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