Comprehensive Practices and Exercises:

Practice - 1: Mr Vinayak has furnished the following information during the previous .year
2021-22.Compute his Taxable Income and Tax Liability.

a. Gross Total Income being Rs 6,40,000

b. Purchased NSC of Rs 11,000
c. Accrued interest on NSC VIII issue amounted Rs 2,800
d. LIC Premium paid Rs 15,000 on his own life. (Policy value being Rs 2,00,000)
e. LIC premium paid by him on his brother’s Life Rs 5,000
f. Repayment of Housing Loan Rs 75,000, out of which interest being Rs 25,000
g. Own contribution to RPF Rs 12,000
h. Contribution to Family benefit Fund Rs 20,000

Ans: Computation of Taxable Income of Mr Vinayak :

Particulars Amount

Gross Total Income 6,40,000

Less: Deduction under chapter VI- A:
- Deduction u/s 80C: 11,000
- Purchase of NSC 2,800
- Interest accrued on NSC 15,000
- LIC Premium (own life) 50,000
- Repayment of Housing Loan 12,000 90,800
- Own Contribution to RPF 90,800 5,49,200
Actual 1,50,000
Or Ceiling WEL
Taxable Income

Tax Particulars: (Under old Regime)

- On Casual Income Nil @ 30% -0-
On LTCG Nil @ 20% -0-
On STCG Nil @ 15% -0-
On Balance (5,49,200)
- First 2,50,000 Nil -0-
Next 2,50,000 @ 5% 12,500
- Balance 49,200 @ 20% 9,840 22,340

- Add: Education and Health cess @ 4% 894

Less: T D S (if any) -0-
- Tax Liability u/s 140A 23,234
Tax Particulars: (Under New Regime)
- On Casual Income Nil @ 30% -0-
- On LTCG Nil @ 20% -0-
- On STCG Nil @ 15% -0-
- On Balance (6,40,000)
First 2,50,000 -0- -0-
Next 2,50,000 @ 5% 12,500
Next 1,40,000 @ 10% 14,000
26,500
Add: Education and Health cess @ 4% 1,060
Less: T D S or Advance tax (if any) -0-
- Tax Liability u/s 140A 27,560

Note: LIC premium to Brother’s life and Contribution to Family benefit fund were not eligible to
deduct u/s 80C. (Cess means “additional tax collected on Tax” for specific purposes. In India 2%
charged for School education, 1% for Higher education and 1% for Health). Section 140A means
Self Assessment. i. e Assessee have to furnish his Income details to the Income Tax department
directly.
Ex - 1: Mr Velan has furnished the following information during the previous .year 2021-
22.Compute his Taxable Income and Tax Liability.

a. Gross Total Income being Rs 7,20,000

b. Purchased NSC VIII’th issue Rs 38,000
c. Accrued interest on NSC VIII issue amounted Rs 6,500
d. LIC Premium paid Rs 25,000 on his own life. (Policy value being Rs 2,00,000 during,
May 2015)
e. LIC premium paid by him on his brother’s Life Rs 5,000
f. Repayment of Housing Loan Rs 85,000, out of which interest being Rs 25,000
g. Own contribution to RPF Rs 20,000
h. Contribution to Family benefit Fund Rs 20,000 (Answer- Taxable Income Rs 5,75,500: QA for
80C- Rs 1,44,500: Tax Liability under new regime – Rs 35,880: Under old regime- Rs 28,704)

Practice -2: Mr Anand has provided the following information for the previous year 2021-22.
Compute his taxable income and his tax liability.

a. Income from Business Rs. 7,20,000

b. Rent from House Property Rs. 1,20,000
c. Long term capital gain on transfer of Land Rs. 2,40,000
d. LIC Premium for his own life taken in 2018 Rs. 90,000
(Policy Value being Rs 8,00,000)
e. Tuition fee for his three children (each Rs 35,000) Rs. 1,05,000
 f. Repayment of Housing Loan
(Including interest Rs. 20,000) Rs. 70,000
g. Medical Insurance of self paid by cheque Rs. 40,000
h. Medical insurance premium of wife paid by cash Rs. 20,000

Computation of Taxable Income of Mr Anand:

Particulars Amount

Income from Business: 7,20,000

Income from House Property:
- Rent received 1,20,000
Less: Deduction u/s 24(1):
- Standard deduction @30% 36,000 84,000
Capital Gains:
- Long term capital gain on transfer of Land 2,40,000
Gross Total Income 10,44,000
Less: Deduction under chapter VI- A:
-Deduction u/s 80C:
LIC Premium (own life) 80,000
Tuition fee for first two children 70,000
Repayment of Housing Loan 50,000
Actual 2,00,000
Or Ceiling 1,50,000
WEL 1,50,000
- Deduction u/s 80D:
- On Medical insurance of self paid by cheque
Actual 40,000
Or Ceiling 25,000 25,000
Taxable Income WEL 8,69,000

A. Tax Particulars: (Under Old Regime)

- On Casual Income -0- @30% - -0-
- On LTCG 2,40,000 @20% 48,000
- On STCG -0- @15% -0-
- On Balance (6,29,000)
- For First 2,50,000 -0- -0-
- Next 2,50,000 @5% 12,500
- Balance 1,29,000 @20% 25,800 86,300

Add: Education and Health Cess @ 4% 3,452

 Less: T D S / Advance Tax if any -0-

Tax Payable u/s 140A 89,752

B. Tax Particulars: (Under New Regime)

- On Casual Income -0- @30% -0-
- On LTCG 2,40,000 @20% 48,000
- On STCG -0- @15% -0-
- On Balance (8,04,000)
For First 2,50,000 -0- -0-
- Next 2,50,000 @5% = 12,500
- Next 2,50,000 @ 10% = 25,000
- Balance 54,000 @ 15% = 8,100 93,600

Add: Educational and Health Cess 4% 3,744

Tax Payable u/s 140A 97,344
Note: 1.Housing loan interest not allowed under deduction u/s 80C. 2. LIC Premium for Brother
not qualified for 80C. 3. Medical insurance premium of wife paid by cash not allowed under
deduction u/s 80D. Assumed that Medial insurance premium only claimed. Medical Check up
Exemption Rs 5,000 ignored)
Ex - 2: Mr Arul has provided the following information for the previous year 2021-22. Compute
his taxable income and his tax liability.

a. Gross Salary Rs 6,40,000

b. Rent from House Property Rs. 1,00,000
c. Long term capital gain on transfer of Land Rs. 1,20,000
d. LIC Premium for his own life taken in 2016 Rs. 75,000
(Policy Value being Rs 8,00,000)
e. Tuition fee for his three children (each Rs 30,000) Rs. 90,000
f. Repayment of Housing Loan
(Including interest 20,000) Rs. 70,000
g. Medical Insurance of self paid by cheque Rs. 20,000
h. Medical insurance premium of wife paid by cash Rs. 15,000

Answer: GTI – Rs 7,80,000:QA for 80C- Rs 1,50,000: 80D- Rs 20,000: Taxable Income under old regime-Rs
6,10,000: Tax Liability 37,440: Taxable Inocme under new regime- Rs 7,80,000 + 50,000(16(1) = 8,30,000: Tax
liability- Rs51,480

Practice -3: Mr Kathir, resident individual submits the following details for the PY 2021-22,
Compute taxable income and tax liability.

a. Contribution towards Pension Fund of LIC Rs 45,000

 b. Medical insurance premium on the health of his wife and children (Rs 10,000 cash) Rs
45,000: Medical check up fee paid Rs 6,000
c. Medical treatment of dependent handicapped brother Rs 25,000
d. Deposit with UTI for the maintenance of the physically challenged Son Rs 80,000
e. Gross Total Income is Rs 8,07,500
f. He paid Rs 10,000 as Donation to a Local Trust

Computation of Taxable Income of Mr Kathir:

Particulars Amount

Gross Total Income 8,07,500

Less: Deduction under chapter VI-A (80C-80U):
80CCC: On LIC Pension fund
a. Actual Rs 45,000
b. Ceiling Rs 1,50,000 WEL 45,000
80D: On Medical Insurance of wife and children
a. Actual Rs 41,000
b. Ceiling Rs 30,000 WEL 30,000

80DD: On Medical Treatment and maintenance of

Dependent Physically challenged Son 75,000 1,50,000

Adjusted Gross Total Income 6,57,500

80G: On Donation to Trust
a. Actual Rs. 10,000
b. Ceiling (10% ) Rs.65,750 WEL @ 50% 5,000

Taxable Income 6,52,500

Tax Particulars under Old regime (No casual, LTCG and

STCG)
For First 2,50,000 -0-
For Next 2,50,000 @ 5% = 12,500
Balance 1,52,500 @ 20% = 30,500 43,000
Add: Education and Health Cess 4% 1,720
Tax Payable u/s 140A 44,720

Tax Particulars under New regime (No casual, LTCG and

STCG) (Rs 8,07,500)
 For First 2,50,000 -0-
For Next 2,50,000 @ 5% = 12,500
For Next 2,50,000 @ 10% = 25,000
Balance 57,500 @ 15% = 8,625 46,125
Add: Education and Health Cess 4% 1,845
Tax Payable u/s 140A 47,970

Ex-3: Mr Rajan, resident individual submits the following details for the PY 2021-22, Compute
taxable income and tax liability.

a. Contribution towards Pension Fund of LIC Rs 60,000

b. Medical insurance premium on the health of his wife and children (Rs 10,000 cash) Rs
50,000
c. Medical treatment of dependent handicapped brother Rs 45,000
d. Deposit with UTI for the maintenance of the dependent handicapped brother Rs 90,000
e. Gross Total Income is Rs 7,86,000
f. He paid Rs 20,000 as Donation to PMNDR Fund

Answer: GTI – Rs 7,86,000:QA for 80CCC- Rs 60,000: 80D- Rs 25,000: 80DD – Rs 75,000: 80G- Rs 10,000:
Taxable Income under old regime-Rs 6,16,000: Tax Liability under old regime – Rs 37,128: Taxable Income
under new regime- Rs 7,86,000: Tax liability- Rs44,616

Practice -4: Mr Charles has furnished the following particulars, compute his taxable income and
tax liability for the AY 2022-23.

a. Income from Business Rs 7,00,000

b. Winnings from Lottery (Net) Rs 70,000
c. Purchase of Lottery Tickets Rs 5,000
d. Long term capital gain on Land Rs 1,50,000
e. Own Contribution to PPF Rs 65,000
f. Donation to Local College Rs 30,000
g. LIC Annuity (Pension)Plan premium paid Rs 75,000

Computation of Taxable Income of Mr Charles:

Particulars Amount

Income from Business: 7,00,000

Capital Gains:
Long Term capital gain on Land 1,50,000

Income from Other Sources:

Winnings from Lottery (70,000 *100/70) 1,00,000
 65,000
GROSS TOTAL INCOME 9,50,000

Less: Deduction under Chapter VI-A: (80C -80U)

80C: On Contribution to RPF 75,000
A. Actual Rs 65,000
B. Ceiling Rs 1,50,000 WEL

80CCC: Contribution to LIC Pension fund

A. Actual Rs 75,000
B. Ceiling Rs 1,50,000 WEL 1,40,000

Adjusted Gross Total Income 8,10,000

80G: On Donation to School:

a. Actual Rs 30,000 30,000
b. Ceiling Rs 66,000 WEL @ 50% 30,000 15,000
10% of( AGTI-LTCG)

Taxable Income 7,95,000

Tax Particulars:(Under old regime) 21,500
- On Casual Income 1,00,000 @ 30% 81,500
- On LTCG 1,50,000 @ 20% 3,260
On Balance (5,45,000) -0-
For First 2,50,000 @ -0-
For Next 2,50,000 @ 5% = 12,500
For Balance 45,000 @ 20% = 9,000
30,000
Add: Education and Health Cess @4% 30,000
Less: TDS/Advance Tax
Tax Payable u/s 140A 84,760

Tax Particulars:(Under New regime) 32,500

- On Casual Income 1,00,000 @ 30% 92,500
- On LTCG 1,50,000 @ 20% 3,700
On Balance (7,00,000)
For First 2,50,000 @ -0-
For Next 2,50,000 @ 5% = 12,500
For Balance 2,00,000 @ 10% = 20,000
 Add: Education and Health Cess @4%

Tax Payable u/s 140A 96,200

Note: Purchase of Lottery Tickets be ignored

Ex -4: Mr Khan has furnished the following particulars, compute his taxable income and tax
liability for the AY 2022-23.

a. Income from Business Rs. 7,70,000

b. Winnings from Lottery (Net) Rs. 35,000
c. Purchase of Lottery Tickets Rs. 2,000
d. Long term capital gain on Land Rs. 1,20,000
e. Own Contribution to RPF Rs. 45,000
f. Donation to a School Rs. 40,000
g. LIC Annuity (Pension)Plan premium paid Rs. 1,25,000

Answer: GTI – Rs 9,40,000:QA for 80C: Rs 45,000: 80CCC- Rs 1,25,000, but limited to Rs 1,05,000 80G- Rs
20,000: Taxable Income under old regime-Rs 7,70,000: Tax Liability under old regime – Rs 74,360: Taxable
Income under new regime- Rs 9,40,000: Tax liability- Rs 82,680

Practice -5: Mr Ashok joined the Central Govt service during the year 2016-17. He has
furnished the following information, compute taxable Income and tax liability for the ASST Year
2022-23.

a. Basic Pay Rs 28,000 p m

b. D A (50% enters) Rs 6,000 p m
c. City Compensatory Allowance Rs 2,000 p m
d. Professional tax paid by him Rs 2,500 p a
e. Entertainment allowance received Rs 5,000 p m
f. Interest on deposit Rs 12,000
g. Short term capital gain on sales of Land Rs 60,000

During the PY, his employer contributed Rs 40,000 to the Pension scheme notified under
section 80CCD. He is also contributed 15% of his salary to a notified scheme. Medical
Expenditure regarding treatment of his dependent brother, who is suffering from Cancer paid
by him Rs. 50,000. Compute taxable income and tax liability.

Computation of Taxable Income of Mr Ashok (Central Govt):

Particulars Amount

Salary:
- Basic Pay (28,000 * 12) 3,36,000
- Dearness Payment (50%) (DP) 36,000
 - Dearness Allownace (DA)(50%) 36,000
- City Compensatory Allowance (CCA) 24,000
- Entertainment allowance 60,000
Gross Salary 4,92,000
Less: Standard Deduction u/s 16(1) 50,000
Less: Entertainment allowance u/s 16(2) (ceiling) 5,000
Less: Professional tax u/s 16(3) 2,500 57,500
Taxable Salary 4,34,500
Capital Gain:
- Short term capital gain on sale of Land 60,000
Income from other source:
- Interest on Deposit 12,000
Gross Total Income 5,06,500

Less: Deduction under Chapter VI-A: (80C -80U)

80CCD: On Contribution to Pension fund
a. Actual Rs 95,800 (40,000 + 55800)
b. Ceiling Rs 2,00,000 WEL 95,800
Salary means Basic + DP = 3,36,000 + 36,000 = 3,72,000)

80DDB: Medical tratement expenses to brother affected by

Cancer (1,00,000 for Senior Citizens) 40,000 1,35,800

Taxable Income 3,70,700

Tax Particulars:(Under old regime)

- On Casual Income Nil @ 30% nil
- On LTCG Nil @ 20% nil
- On STCG 60,000 @ 15% = 9,000
On Balance (3,10,700)
For First 2,50,000 @ -0-
Balance 60,700 @ 5% = 3,035 12,035

Add: Education and Health Cess @4% 482

Tax Payable u/s 140A 12,517

Tax Particulars:(UnderNew regime (5,06,500 +57,500)

- On Casual Income Nil @ 30%
- On LTCG Nil @ 20%
- On STCG 60,000 @ 15% = 9,000
 On Balance (5,04,000)
For First 2,50,000 @ -0-
Next 2,50,000 @ 5% = 12,500
Balance 4,000 @ 20% = 800 22,300

Add: Education and Health Cess @4% 892

Tax Payable u/s 140A 23,192

Ex- 5: Mr Alwinraj joined the Central Govt service during the year 2017-18. He has furnished
the following information, compute taxable Income and tax liability for the ASST Year 2022-23.

a. Basic Pay Rs.36,000 pm

b. D A (50% enters) Rs.12,000 pm
c. City Compensatory Allowance Rs. 4,000 pm
d. Professional tax paid by him Rs. 2,500 pa
e. Entertainment allowance received Rs. 6,000 pm
f. Interest on fixed deposit Rs. 18,000 pa
g. Short term capital gain on sales of Land Rs. 80,000 pa

During the PY, his employer contributed Rs 75,000 to the Pension scheme notified under section
80CCD. He is also contributed 12% of his salary to a notified scheme. Expenditure regarding
treatment of his dependent ELDER brother, who is suffering notified disease, aged 64 years .
Compute taxable income and tax liability.

Answer: Taxable Salary- Rs 6,38,500: STCG- Rs 80,000: Other sources- Rs 18,000: GTI – Rs 7,36,500:QA
80CCD: Rs 1,35,480: 80DDB- Rs 1,00,000: Taxable Income under old regime-Rs 5,01,020: Tax Liability
under old regime – Rs 21,373: Taxable Income under new regime- Rs 7,94,000: Tax liability- Rs 47,736

Practice - 6: Mr Arumugam’s Gross total income is Rs 5,25,000. He has made the following
donations. Compute his taxable Income

A. National Defence Fund Rs 25,000

B. Prime Minister’s National Relief Fund Rs 35,000
C. Prime Minister’s Drought Relief Fund Rs 40,000
D. Prime Minister’s Earthquake relief fund in Kind Rs 20,000
E. Donation to a poor family Rs 10,000

Computation of Taxable Income of Mr Arumugam:

Particulars Amount

Gross Total Income 5,25,000

Less: Deduction under chapter VI-A (80C-80U except 80G): Nil
 Adjusted Gross Total Income 5,25,000
80G: On Donations @100%:
- On Donation to NDF 25,000
- On Donation to PMNR Fund 35,000 60,000

On Donations @ 50%:
- On Donation to PMNDR Fund 40,000 20,000

Taxable Income 4,45,000

Tax Particulars (Under old Regime)
(No casual, LTCG and STCG)
- For First 2,50,000 Nil
Next 1,95,000 @ 5% 9,750
Less: Rebate u/s 87A(upto Rs 12,500) 9,750
Tax Payable u/s 140A NIL
- Note: (Taxable Income is below Rs 5,00,000, so we can avail
rebate u/s 87A).
Tax Particulars (Under New Regime)
(No casual, LTCG and STCG)
For First 2,50,000 Nil
Next 2,50,000 @ 5% 12,500
Balance 25,000 @10% 2,500
Total 15,000
Add: Education and Health Cess @4% 600
Tax Liability 15,600
(Note:P M Earthquake Relief Fund in Kind and Donation to Poor family were not eligible for
deduction)
Ex -6: Mr Kumar’s Gross total income is Rs 8,60,000. He has made the following donations.
Compute his taxable Income

A. National Defence Fund Rs 45,000

B. Prime Minister’s National Relief Fund Rs 55,000
C. Prime Minister’s Drought Relief Fund Rs 60,000
D. Prime Minister’s Earthquake relief fund in Kind Rs 30,000
E. Donation to a poor family Rs 25,000

Answer: GTI – Rs 8,60,000:QA - 80G- (100%) Rs 1,00,000 and 50% - Rs 60,000: Taxable Income under old
regime-Rs 7,30,000: Tax Liability under old regime – Rs 60,840: Taxable Income under new regime- Rs
8,60,000: Tax liability- Rs 56,160
Practice -7: Mr Amar’s Gross total Income is Rs 6,60,000 including a long term capital gain of
Rs 80,000. He has made the following contribution and payments. Compute his taxable income
and tax liability.

- Contribution to RPF Rs. 30,000

- Medi claim insurance premium paid by cheque Rs. 20,000
- Contribution to LIC Pension fund Rs. 60,000
- Repayment on Loan taken from SBI for his MBA programme Rs 1,00,000 (including Rs
30,000 as interest)
- Donation to approved institution for the purpose of promoting Family Planning
Rs.40,000.

Computation of Taxable Income of Mr Amar:

Particulars Amount

Gross Total Income (including LTCG Rs 80,000) 6,60,000

Less: Deduction under Chapter VI-A: (80C -80U)

80C: On Contribution to RPF
a. Actual Rs 30,000 30,000
b. Ceiling Rs 1,50,000 w. e. l

80CCC: Contribution ot LIC Pension fund

a. Actual Rs 60,000 60,000
b. Ceiling Rs 1,50,000 w. e. l

80D: Medical Insurance 20,000

a. Actual Rs 20,000
b. Ceiling Rs 25,000 w. e. l 30,000 1,40,000

80E: Interest on Loan taken his Higher studies 5,20,000

Adjusted Gross Total Income

40,000
80G: On Donation tom FP Fund
a. Actual Donation Rs 40,000 4,80,000
b. 10% of (AGTI – LTCG) Rs 44,000
WEL @ 100%
Taxable Income

Tax Particulars:(Under old regime)

 - On Casual Income Nil @ 30% = Nil
- On LTCG 80,000 @ 20% = 16,000
- On STCG Nil @ 15% = Nil 16,000
On Balance (4,00,000)
For First 2,50,000 @ -0-
Next 1,50,000 @ 5% = 7,500
Less: Rebate u/s 87A 7,500 -00-

Add: Education and Health Cess @4% 640

Less: TDS/Advance Tax Nil

16,640
Tax Payable u/s 140A

Tax Particulars:(Under New regime)

- On Casual Income Nil @ 30% = Nil
- On LTCG 80,000 @ 20% = 16,000
- On STCG Nil @ 15% = Nil
On Balance (5,80,000)
For First 2,50,000 @ -0- 36,500
Next 2,50,000 @ 5% = 12,500
Next 80,000 @ 10% = 8,000 1,460
Nil
Add: Education and Health Cess @4% 37,960
Less: T D S
Tax Payable u/s 140A

Ex -7: Mr Manoj Gross total Income is Rs 8,20,000 including a long term capital gain of Rs
1,00,000. He has made the following contribution and payments. Compute his taxable income
and tax liability.

- Contribution to SPF Rs 50,000

- Medi claim insurance premium paid by cheque Rs 30,000 and Health check up fee paid
Rs 5,000
- Contribution to LIC Pension fund Rs 80,000
- Repayment on Loan taken from SBI for his MBA programme Rs 1,00,000 (including Rs
45,000 as interest)

Donation to approved institution for the purpose of promoting Family Planning Rs 50,000.
Answer: GTI – Rs 8,20,000:QA 80C: Rs 50,000: 80CCC- Rs 80,000: 80D- Rs 30,000: 80E- Rs 45,000: 80G-
Rs 50,000: Taxable Income under old regime-Rs 5,65,000: Tax Liability under old regime – Rs 31,980:
Taxable Income under new regime- Rs 8,20,000: Tax liability- Rs 56,680
Practice -8: Mr Nagarajan has furnished the following particulars for the PY 2021-22. Compute
his taxable income and tax liability.

a. Income from Business Rs. 4,30,000

b. Income from House Property Rs. 84,000
c. Interest on Securities Rs. 75,000
d. Winnings from Horse Races Rs. 1,20,000
e. Maintenance cost of Horses Rs. 70,000

He made the following payments:

1. Contribution to SPF Rs.50,000

2. LIC premium on his own life and his wife Rs. 20,000 each
3. Medical Insurance premium on Self &
Parent (Senior Citizen) Rs.70,000
4. Amount spent for medical treatment of his disabled son Rs. 82,000
5. Donation to PM CARES Fund Rs. 50,000

Computation of Taxable Income of Mr Nagarajan

Particulars Amount

Income from Business 4,30,000

Income from House Property: 84,000
Income from other sources:
- Interest on Securities 75,000
- Winnings from Horse races 1,20,000
Less: Maintenance of Horses 70,000 50,000 1,25,000

GROSS TOTAL INCOME 6,39,000

Less: Deduction under Chapter VI-A: (80C -80U)
80C: On Contribution to SPF 50,000
On LIC Premium of own + wife 40,000
a. Actual Rs 90,000
b. Ceiling Rs 1,50,000 WEL 90,000
80D: Medical Insurance for self and Aged Parent
(Actual Rs70,000 or Ceiling 25,000 for self + 50,000 for
Senior Citizens – W E L 70,000

80DD: Medical Treatment for his Disabled Son 75,000 2,35,000

 Adjusted Gross Total Income 4,04,000

80G: On Donation tom PM Cares Fund 100% 50,000

Taxable Income 3,54,000

Tax Particulars:(Under old regime)
- On Casual Income 50,000@ 30% = 15,000
- On LTCG Nil @ 20% = Nil
- On STCG Nil @ 15% = Nil
On Balance (3,04,000)
For First 2,50,000 @ -0-
Next 54,000 @ 5% = 2,700
Less: Rebate u/s 87A 2,700 -00- 15,000

Add: Education Health Cess @4% 600

Less: TDS/Advance Tax Nil
15,600
Tax Payable u/s 140A

Tax Particulars:(Under New regime = 6,39,000)

- On Casual Income 50,000@ 30% = 15,000
- On LTCG Nil @ 20% = Nil
- On STCG Nil @ 15% = Nil
On Balance (5,89,000)
For First 2,50,000 @ -0-
Next 2,50,000 @ 5% = 12,500
Balance 89,000 @ 10% = 8,900 36,400

Add: Surcharge @4% 1,456

Less: TDS/Advance Tax -0-
37,856
Tax Payable u/s 140A

Ex - 8: Mr Manoj has furnished the following particulars for the PY 2021-22. Compute his
taxable income and tax liability.

f. Income from Business Rs 5,70,000

g. Income from House Property Rs 1,26,000
h. Income from Interest on Securities Rs 60,000
i. Winnings from Horse Races(Net) Rs 1,40,000
 j. Maintenance cost of Horses Rs 90,000

He made the following payments:

a. Contribution to SPF Rs 50,000

b. LIC premium on his own life and his wife Rs 25,000 each
c. Medical Insurance premium on Self
and a Parent (Senior Citizen) Rs 85,000
d. Amount spent for medical treatment of his disabled son Rs 50,000
e. Donation to PM CARES Fund Rs 80,000

Answer:GTI – Rs 8,66,000: QA 80C: Rs 1,00,000: 80D- Rs 75,000: 80DD- Rs 50,000 OR Rs 75,000 WEL:
80G- Rs 80,000: Taxable Income under old regime-Rs 5,71,000: Tax Liability under old regime – Rs 45,292:
Taxable Income under new regime- Rs 8,66,000: Tax liability- Rs 74,256

Practice -9: Mr Balu’s Gross total income is Rs 7,20,000 including Long term capital gain of Rs
80,000. He made the following payments during 2021-22. Compute Taxable Income and tax
liability.

a. His Contribution to RPF Rs 25,000

b. Medi claim insurance for his wife Rs. 15,000
c. Medical treatment for a disabled brother Rs. 30,000
d. Donation to the repair of a Temple Rs. 40,000
e. Donation for promoting a minority Community Rs. 50,000

Computation of Taxable Income of Mr Balu:

Particulars Amount
Gross Total Income 7,20,000
Less: Deduction under chapter VI-A (80C-80U):
80C: Contribution to RPF
a. Actual Rs. 25,000
b. Ceiling Rs.1,50,000 WEL 25,000

80D: On Medical Insurance of wife

a. Actual Rs 15,000
b. Ceiling Rs 30,000 WEL 15,000

80DD: On Medical Treatment and maintenance of

30,000
Dependent handicapped brother 70,000

Adjusted Gross Total Income 6,50,000

80G: On Donation to Temple and Minority Institution
 A. Actual Rs 90,000
B. Ceiling (10% AGTI-LTCG )Rs 57,000 WEL @50% 28,500
(6,50,000 – 80,000)
6,21,500
Taxable Income
Tax Particulars: (Under old regime)
On LTCG 80,000 @20% 16,000
On Balance (5,41,500)
For First 2,50,000 -0-
Next 2,50,000@ 5% 12,438
Balance 41,500@20% 8,300 20,738
36,738
1,469
Add: Cess@4%
38,207
Tax Payable u/s 140A

Tax Particulars: (Under new regime)

On LTCG 80,000 @20% 16,000
On Balance (6,40,000)
For First 2,50,000 -0-
Next 2,50,000 @ 5% = 12,500
Balance 1,40,000 @10% = 14,000 26,500
42,500
Add: Cess@4% 1,700
TAX PAYABLE U/S 140A 44,200

Ex - 9: Mr Sivan’s Gross total income is Rs 8,40,000 including Long term capital gain of Rs
1,60,000. He made the following payments during 2021-22. Compute Taxable Income and tax
liability.

a. His Contribution to RPF Rs 45,000

b. Medical insurance for his wife plus check up fee Rs 35,000
c. Medical treatment for a disabled dependent brother Rs 60,000
d. Donation to the repair a Church Rs 30,000
e. Donation for promoting a minority Community Rs 40,000

Answer: GTI – Rs 8,40,000:QA – 80C- Rs 45,000: 80D- Rs 30,000: 80DDB- Rs 75,000 ceiling Or actual Rs
60,000 (wel): 80G(50%) - Rs 27,250: Taxable Income under old regime-Rs 6,17,750: Tax Liability under old
regime – Rs 49,972: Taxable Income under new regime- Rs 8,40,000: Tax liability- Rs 65,000

Practice -10: Calculate taxable income of Mr Kapil from the following:

a. Gross Total Income Rs 8,60,000

b. Life Insurance premium paid Rs 16,000
c. Contribution towards LIC Pension fund Rs 45,000
 d. Medical Insurance Paid by cheque Rs 20,000
e. Expenditure on Medical treatment for disabled spouse Rs 56,000
f. Donation to Indian Army Rs 40,000
g. Donation to PM Cares Fund Rs 20,000
h. Donation to Local Hospital Rs 25,000

Computation of Taxable Income of Mr Kapil:

Particulars Rs Amount

Gross Total Income 8,60,000

Less: Deduction under chapter VI-A (80C-80U):
80C: Contribution to RPF
a. Actual Rs 16,000
b. Ceiling Rs 1,50,000 WEL 16,000
80CCC: Contribution to LIC Pension Fund
a. Actual Rs 45,000
b. Ceiling Rs 1,50,000 WEL
45,000
80D: On Medical Insurance of wife
a. Actual Rs 20,000
b. Ceiling Rs 30,000 WEL 20,000

80DD: On Medical Treatment and maintenance of spouse 75,000 1,56,000

Adjusted Gross Total Income 7,04,000

80G: On Donations(100%)
- To Indian Army 40,000
- To PM Care Fund 20,000 = 60,000 @ 100% 60,000
On Donation to Local Hospital
A. Actual Rs 25,000
B. Ceiling (10% AGTI-LTCG ) Rs 70,400 12,500 72,500
WEL @ 50% 12,500 (7,04,000 – 0)

Taxable Income 6,31,500

Particulars: (Under old regime)

On LTCG Nil @20%
On Balance (6,31,500)
For First 2,50,000 -0-
Next 2,50,000 @ 5% 12,500
Balance 1,31,500@ 20% 26,300 38,800
Add: Cess@4% 1,552
Tax Payable u/s 140 A 40,352
Tax Particulars: (Under New regime)
On LTCG Nil @20%
On Balance (8,60,000)
For First 2,50,000 -0-
Next 2,50,000 @ 5% 12,500
Next 2,50,000 @10% 25,000
Balance 1,10,000 @ 15% 16,500 54,000
Add: Cess@4% 2,160
Tax Payable u/s 140A 56,160

Ex - 10: Calculate taxable income of Mr Kaushik the following :

a. Gross Total Income Rs 9,20,000

b. Tuition fee paid for his two children Rs 60,000
c. Contribution towards NPS Rs 50,000
d. Interest on loan taken for HP during 2018-19 Rs 32,000
(Loan amount Rs 30,00,000)
e. Expenditure on Medical treatment for disabled Spouse Rs 45,000
f. Donation to Indian Army Rs 50,000
g. Donation to PM Cares Fund Rs 30,000
h. Donation to Local Hospital Rs 50,000

Answer: GTI – Rs 9,20,000:QA – 80C- Rs 60,000: 80CCC- Rs 50,000: 80EE- Rs 32,000: 80DD- Rs 45,000:
80G(100%) - Rs 80,000: 80G- (50%) – Rs25,000: Taxable Income under old regime-Rs 6,28,000: Tax Liability
under old regime – Rs 39,624: Taxable Income under new regime- Rs 9,20,000: Tax liability- Rs 65,520

Practice-11: Mr Chandru, a physically challenged assessee having Gross Total Income of Rs

8,40,000 for the PY 2021-22 furnishes the following information:

a. Deposited Rs 75,000 in tax saving deposit in a nationalized bank

b. Paid Rs 25,000 towards LIC Premium on the life of his married daughter
c. Donated Rs 25,000 to Govt recognized institution for Scientific research
d. Paid Rs 60,000 as interest on Loan taken for purchase of Electric vehicle during 2019-20.
e. Gross Total income includes interest on savings bank account from a Commercial bank
Rs 12,000

Computation of Taxable Income of Mr Chandru:

Particulars Amount

Gross Total Income 8,40,000

Less: Deduction under chapter VI-A (80C-80U):
80C: Contribution to Tax saving Deposit
a. Actual Rs 75,000
b. Ceiling Rs 1,50,000 WEL 75,000
 80GGA: Donation to Scientific Research (100%) 25,000

80EEB: Payment of interest on Loan taken for Purchase

of Electric Vehicles during 01-04-2019 – 31-03-2020
a. Actual Interest Rs 60,000
b. Ceiling Rs 1,50,000 WEL 60,000

80TTA: Interest on Savings Bank account

a. Actual Interest Rs 12,000
b. Ceiling Rs 10,000 WEL 10,000

80U: Deduction in respect of Physically Challenged (Rs 75,000 2,45,000

1,25,000 for severe disability)

Taxable Income 5,95,000

(LIC premium to married daughter treated as Non Dependent)

Tax Particulars: (Under old regime)

On LTCG etc Nil @20%
On Balance (5,95,000)
For First 2,50,000 -0-
Next 2,50,000 @ 5% 12,500
Balance 95,000@ 20% 19,000 31,500
Add: Cess@4% 1,260
Tax Payable u/s 140 A 32,760

Tax Particulars: (Under New regime)

On LTCG etc Nil @20%
On Balance (8,40,000)
For First 2,50,000 -0-
Next 2,50,000 @ 5% 12,500
Next 2,50,000 @ 10% 25,000
Balance 90,000@ 15% 13,500 51,000
Add: Cess@4% 2,040
Tax Payable u/s 140A 53,040
(Note: LIC Premium of a married daughter, treated a s non dependent)
Ex -11: Mrs Srimathi, Aged 62 years an physically challenged assessee having Gross Total
Income of Rs 9,60,000 (includes interest on FD from Bank 60,000)for the PY 2021-22 furnishes
the following information. Compute her Taxable Income

a. Deposited Rs 60,000 in tax saving deposit in a nationalized bank

b. Paid Rs 25,000 towards LIC Premium on the life of his married Son
c. Donated Rs 50,000 to Govt recognized institution for Scientific research
d. Paid Rs 40,000 as interest on Loan taken for purchase of Electric vehicle during 2019-20.
e. She Contributed to Rs 25,000 as Donation to an Political party
Answer: GTI – Rs 9,60,000:QA – 80C- Rs 60,000: 80EEB- Rs 40,000: 80GGA- Rs 50,000: 80GGC- Rs 25,000:
80TTB - Rs 50,000: 80U- Rs 75,000: Taxable Income under old regime-Rs 6,60,000: Tax Liability under old
regime – Rs 46,280: Taxable Income under new regime- Rs 9,60,000: Tax liability- Rs 71,760

Practice -12: Mrs Muthu author, a resident individual furnished the following particulars for the
year ended on 31-03-2022.

1. Gross Total Income (including Royalty receipts of Rs 2,00,000) Rs 9,60,000

2. Housing loan principal repayment, which is under construction Rs 60,000
3. Principal repayment of housing loan from relative Rs 1,00,000
4. Contribution to PPF in the name of her mother Rs 60,000
5. She deposited Rs 5,000 per month under Pension scheme notified by Central
Government.

Computation of Taxable Income of Mrs. Muthu:

Particulars Amount

Gross Total Income 9,60,000

Less: Deduction under chapter VI-A (80C-80U):

- 80CCD: Contr.to Pension fund notified by Central Govt
a. Actual Rs 60,000
b. Ceiling Rs 2,00,000 WEL 60,000
60,000

- 80QQB: Royalty receipts by an Author

a. Actual Rs 2,00,000
b. Ceiling Rs 3,00,000 WEL 2,00,000 2,60,000

Taxable Income 7,00,000

Note-1: Repayment of Housing Loan(Principal amount) is not deductible under 80C as HP is under
construction. Note-2: Repayment of Principal on housing loan from relative is not deductible under 80C
Note-3: Contribution to PPF in the name of her mother is not deductible under 80C
Ex -12:Mr Rajan an senior citizen, aged 65 years, submitted the following information, compute
taxable Income and tax liability for the AY 2022-23.
Taxable Income from House Property Rs 3,80,000
Business Income Rs 4,40,000
Long term capital Gain Rs 60,000
Interest on Fixed Deposit with nationalized bank Rs 60,000
Contribution to PPF Rs 1,20,000
Repayment of Housing Loan during 2021-22 (including interest of Rs 25,000, Loan taken
during 2016, construction completed during Dec2019)Rs 1,25,000
Donation to Political party Rs 30,000
Donation to PM CARE Fund Rs 25,000
(Answer: GTI – Rs 9,40,000:QA – 80C- Rs 1,50,000: 80G (100%)- Rs 25,000: 80G (50%)- Rs 15,000: 80TTB
Rs 50,000: 80GGC – Rs 30,000: Taxable Income under old regime-Rs 7,00,000: Tax Liability under old
regime – Rs 54,600: Taxable Income under new regime- Rs 9,40,000: Tax liability- Rs 71,760)

Practice – 13: Mr Albert owns big house, construction being completed in 30th Nov 2021. 60%
of floor area is let out for residential purposes on a monthly rent of Rs 32,000. However this
portion is vacant for ONE month during the previous year. 20% of floor area is used by the
owner for the purpose of his Business, while remaining 20% of the floor area used for his
residence. Other particulars of the house are as follows.

Municipal Rental Value – Rs 6,00,000 Annual Charges - Rs 24,000

FRV - Rs 5,60,000 Municipal Tax - Rs 60,000

Standard Rent - Rs 6,40,000 Insurance - Rs 36,000

Ground Rent - Rs 28,000

On 01-06-2019 he borrowed Rs 5.00.000 @ 12% p a for the construction of the property. No

any part of loan settled yet to date. His income from business amounted to Rs 90,000. Compute
Taxable income His other details were as follows:

Salary received (Gross) Rs 5,40,000 : Winnings from Lotteries(Net) Rs 70,000:

Long term Capital gain Rs 60,000: Savings Bank Interest Rs 15,000
LIC Premium paid Rs 45,000: SPF Contribution Rs 55,000
Donation to PM CaresFund Rs 50,000: Medical Insurance Premium Rs 20,000

Computation of Taxable income:

Salary:

- Gross salary 5,40,000

Less: Standard deduction u/s 16(1) 50,000 4,90,000

Computation of Income from HP

Particulars 20% 20% 60%

(Self (Self (Let Out)

Business) Residence)

MRV (2:2:6) 1,20,000 1,20,000 3,60,000

FRV(2:2:6) 1,12,000 1,12,000 3,36,000

 Whichever is Higher 1,20,000 1,20,000 3,60,000

Standard Rent(2:2:6) 1,28,000 1,28,000 3,84,000

Whichever is Least (ERV) 1,20,000 1,20,000 3,60,000

Annual Rent Less: Unrealized Rent etc - - 3,84,000

Whichever is higher (ARV) - - 3,84,000

Less:Vacancy Allowance - - 32,000

GROSS ANNUAL VALUE(GAV) 1,20,000 1,20,000 3,52,000

Less: Municipal Tax Paid 12,000 12,000 36,000

ANNUAL VALUE(AV) 1,08,000 1,08,000 -

Less: Self Business Exemption u/s22 1,08,000 - -

Less: Self Residence Exemption u/s23(2) - 1,08,000 -

NET ANNUAL VALUE(NAV) 000 000 3,16,000

Less: Deduction u/s 24(1)

- Std.Ded @30% NAV - - 94,800

- Interest on Loan:
- Current year (2021-22)(2:2:6)
- Pre construction period (2:2:6)
P&L 12,000 36,000

Income From House Property P&L 4,400 13,200

Nil (16,600) 1,72,800

Income from Business 90,000

Capital Gains:

-Long term capital gain 60,000

Income from other source:

- Interest from Savings bank account 15,000

- Winnings from Lottery (70,000 +30,000) 1,00,000 1,15,000

Gross Total Income 8,21,200

Less: Deduction under chapter VI-A (80C-80U):

80C: Contribution to LIC/SPF a. Actual Rs 1,00,000

b. Ceiling Rs 1,50,000 WEL 1,00,000

80D: Medical Insurance Premium a. Actual Rs 20,000

b. Ceiling Rs 25,000 WEL 20,000

80 TTA: Savings Bank INTEREST a. Actual Rs 15,000

b. Ceiling Rs 10,000 WEL 10,000

Adjusted Gross Total Income 6, 91,200

Less: Deduction u/s 80G:

- On Donation to PM CARE Fund (100%) 50,000

TAXABLE INCOME 6,41,200

Workings for interest on pre construction period:

Loan Rs 5,00,000, Interest rate @ 12%; Period: Date of Borrowing is 01-06-2019: Date of
Repayment is NOT YET to Date of completion of construction = 30-11-2021. So, Period =
01-06-2019 - 30-11-2021 = 2019-20 = 10 m: 2020-21 = 12 m: 2021-22 = 08 m (Year of
Completion of Construction) TOTAL = 30 m, (BUT SHOULD CONSIDER ONLY 22
Months)Interest on Pre construction period =Loan * Rate * Period/ 5 years = 5,00,000 * 12% *
22m/12 / 5 years = 22,000

Ex-13: Mr Ashok owns big house, construction being completed in 30th June 2021. 60% of floor
area is let out for residential purposes on a monthly rent of Rs 45,000. However this portion is
vacant for ONE month during the previous year. 20% of floor area is used by the owner for the
purpose of his Business, while remaining 20% of the floor area used for his residence. Other
particulars of the house are as follows.

Municipal Rental Value – Rs 9,00,000 Annual Charges - Rs 40,000

FRV - Rs 8,70,000 Municipal Tax - Rs 90,000

Standard Rent - Rs 8,40,000 Insurance - Rs 60,000

Ground Rent - Rs 48,000

On 01-08-2018 he borrowed Rs 9.00.000 @ 15% p a for the construction of the property. No

any part of loan settled yet to date. Compute Taxable income with the following other
information: Gross salary received Rs 7,20,000: Income from his Business – Rs 2,20,000: Long
term capital gain Rs 40,000: Donation to PM National Relief Fund Rs 50,000: Donation to the
Local college Rs 40,000: Contribution to SPF Rs 60,000: Interest from Savings Bank account Rs
14,000 and Contribution to National savings certificate Rs 40,000. (Answer: Income from House
Property: Unit-2: Rs Nil: Unit-3: Loss Rs 41,400: Unit-1: Rs 1,84,500( NAV – 4,41,000 – 1,32,300- 81,000 –
43,200) Total Current year Interest: Rs 1,35,000: Pre construction period interest: Rs 72,000)

Practice -14: Mr Sudar an Advocate submits the following particulars.

Compute his total income.

Particulars Amount

6,40,000
- Professional Income -Fee from Clients
96,000
- Rent received from houses at Chennai
- Municipal taxes 9,000
- Long-term capital Loss
20,000
- Part time salary as lecturer in tax laws
60,000
- Rent paid at Kanpur
10,000 p m
- Interest on govt securities
30,000
- Interest from SB account
16,000
- Contribution to SPF
60,000
- Interest from POSB account
5,500

Computation of Taxable Income of Mr Sudar

Particulars Amount

Income from House Property: 96,000

 - Rent from Property GAV 9,000
- Less: Municipal Tax paid 85,000
NAV 25,500 59,500
Less: Deduction u/s 24(1): Std deduction @30%
6,40,000
Income from Profession: Fees from Clients
(20,000) Nil
Long term capital Loss to be carry forwarded
Income from other source: 60,000
- Part time remuneration in Tax Laws 30,000
- Interest of Govt. securities 16,000
- Interest from SB Account
- Interest from POSB account 5,500
2,000
- Less: Exemption u/s 10(15) 3,500

1,08,000
Gross Total Income 8,07,500

Less: Deduction under chapter VI-A (80C-80U):

80C: Contribution to SPF a. Actual Rs 50,000
b. Ceiling Rs 1,50,000 WEL 50,000
50,000
80TTA: Interest on Savings Bank account
a. Actual Interest Rs 16,000
b. Ceiling Rs 10,000 WEL 10,000
10,000
Adjusted Gross Total Income
7,47,500
80GG: House Rent Paid:
- 1. Rs 45,250 (1,20,000 – 74,750)
- 2. Rs 1,86,875 (25% of AGTI)
- 3 Rs 60,000 (5,000 * 12) WEL 60,000
60,000
Taxable Income
6,87,500

Tax Particulars: (Under old regime)

On LTCG etc Nil @20%
On Balance (6,87,500)
For First 2,50,000 -0-
Next 2,50,000 @ 5% 12,500
 Balance 1,87,500 @ 20% 37,500 50,000
Add: Cess@4% 2,000
Tax Payable u/s 140 A 52,000

Tax Particulars: (Under New regime)

On LTCG etc Nil @20%
On Balance (8,07,500)
For First 2,50,000 -0-
Next 2,50,000 @ 5% 12,500
Next 2,50,000 @ 10% 25,000
Balance 57,500@ 15% 8,625 46,125
Add: Cess@4% 1,845
Tax Payable u/s 140A 47,970
Ex -14: Mr Kumaran an Advocate aged 62 years submits the following particulars.Compute his
total income.
Particulars Amount

8,20,000
- Professional Income -Fee from Clients
1,.44,000
- Rent received from houses at Chennai
- Municipal taxes 14,000

- Interest on loan taken for renovation of House which let out 32,000
- Long-term capital Gain
50,000
- Part time salary as lecturer in tax laws
72,000
- Rent paid at Kanpur
15,000 p m
- Interest on tax free govt securities
25,000
- Interest from Fixed deposit from Bank
62,000
- Contribution to SPF
60,000
- Interest from POSB account
6,500

(Answer: Income from House Property: Rs 59,000: Income from Profession – Rs 8,20,000: LTCG – Rs 0,000:
Income from other sources – Rs 87,000(72,000 + 12,000 (62,000-50000 (80TTB) + 3,000:
eduction u/s 80C – Rs 60,000: 80TTB- Rs 50,000: 80GG – Rs 60,000)

Practice-15: A foreign national (former WIPRO Employee), physically challenged, came to

India for the first time on Dec 01, during the previous for a visit of 250 days and submits the
following particulars: Compute his Taxable Income.
 Particulars Amount

Salary received for four months

6,00,000
Income from Business in Sri Lanka, but received in India
2,50,000
Income from House property in Paris but received in India
4,50,000
Winnings from Betting in India
60,000
Winnings from Horse races at Ooty (Net)
35,000
Contribution PM CARE Fund
80,000
Donation to Local Trust for Free Education scheme
2,00,000

Computation of Taxable Income

Particulars Amount

Salary received for four months in India 6,00,000

- Less: Standard deduction u/s 16(1) 50,000 5,50,000
Income from House Property in Paris, received in India 4,50,000
Income from Business in Sri Lanka controlled from India 2,50,000
Income from other source:
- Winnings from Bettings 60,000
- Winnings from Horse races (35,000 * 100 / 70) 50,000 1,10,000
13,60,000
Gross Total Income

Less: Deduction under chapter VI-A (80C-80U):

80U: Physically Challenged Assessee
75,000
Adjusted Gross Total Income
12,85,000
80G: Donation to PM Care Fund @ 100%
80,000
Donation to Local Trust a. Rs 2,00,000 or
b. Rs 1,28,500 w e l @50%
64,250 1,44,250

Taxable Income
11,40,750
Tax Particulars: (Under New regime)
On Casual Income 1,10,000 @ 30% 33,000
On Balance (10,30,750)
 For First 2,50,000 -0-
Next 2,50,000 @ 5% 12,500
Next 2,50,000 @ 10% 25,000
Next 2,50,000 @ 15% 37,500
Balance 30,750 @ 20% 6,150 81,150
1,14,150
Add: Cess@4% 4,566
Tax Payable u/s 140A 1,18,716

Ex - 15: A foreign national, physically challenged came to India for the first time on August 01,
during the previous for a visit of 250 days and submits the following particulars:

Particulars Amount

Salary received for Eight months 8,00,000

Income from Business in China, but received in India 4,20,000

Income from House property in London but received in India 5,80,000

Winnings from Betting in India (Net) 70,000

Winnings from Horse races at Bangalore (Net) 35,000

Contribution PM CARE Fund 80,000

Donation to Local Trust for Free Education scheme 3,00,000

Practice – 16: Mr Azhaghu submits the following particulars, Compute taxable Income:

Particulars Amount

Salary received from ABC Ltd (Computed) 2,50,000

Dividend from ITC Ltd 24,000

Interest on Government securities 26,000

Profit from Hardware Business 4,00,000

Loss from Cement business 60,000

Current year Depreciation 30,000

Long term capital gains 80,000

Short term capital loss 30,000

Winnings from Horse races(Net) 70,000

Maintenance charges of race horse 60,000

Donation to Family planning fund 50,000

Medical treatment expenses of Blind mother, aged 70 years 40,000

Contribution to PPF 75,000

LIC premium on the life of his wife 55,000

Computation of Taxable Income of Mr Azhaghu

Particulars Amount

Salary (Computed) 2,50,000

Income from House Property Nil
Income from Hardware Business 4,00,000
Less: Loss from cement business 60,000
Current year Depreciation 30,000 3,10,000
Capital Gains:
- Long term capital gain 80,000
Less: Short term capital loss 30,000 50,000

Income from other source:

- Interest on Government securities 26,000
- Dividend from ITC Ltd 24,000
- Winnings from Horse races (70,000 * 100 / 70)
- Less: Maintenance charges of horse (60,000)
40,000 90,000
Gross Total Income 7,00,000

Less: Deduction under chapter VI-A (80C-80U):

- 80C: Contribution to PPF 75,000 1,20,000
LIC Premium 55,000 Actual or 1,50,000
 Ceiling 1,50,000 1,20,000
80DDB: Medical treatment of aged Mother 1,00,000

Adjusted Gross Total Income 4,80,000

80G: Donation to Family Planning fund
a. Rs 50,000 Actual or
b. Rs 40,000 ceiling w e l @ 100% 40,000

Taxable Income 4,40,000

Tax Particulars: (Under OLD regime)
On Casual Income 40,000 @ 30% 12,000
On LTCG 50,000 @ 20% 10,000
On Balance (3,50,000)
For First 2,50,000 -0-
Balance 1,00,000 @ 5% 5,000
Less: Rebate u/s 87A 5,000
(Including LTCG, below Rs 5,00,000) 22,000
Add: Cess@4% 880
Tax Payable u/s 140A 22,880

Tax Particulars: (Under NEW regime)

On Casual Income 40,000 @ 30% 12,000
On LTCG 50,000 @ 20% 10,000
On Balance (6,10,000)
For First 2,50,000 -0-
Next 2,50,000 @ 5% 12,500
Balance 1,10,000 @ 10% 11,000

Add: Cess@4% 45,500

Tax Payable u/s 140A
1,820
47,320

Ex – 16: Mr Anbunathan submits the following particulars, Compute taxable Income:

Particulars Amount

Salary received from XYZ Ltd (Computed) 6,00,000

Dividend from ITC Ltd 46,000

Interest on Government securities 34,000

Profit from Hardware Business 5,60,000

Loss from Cement business 90,000

Current year Depreciation 70,000

Long term capital gains 1,40,000

Short term capital loss 60,000

Winnings from Horse races(Net) 1,40,000

Maintenance charges of race horse 80,000

Donation to Family planning fund 60,000

Medical treatment expenses of Blind mother, aged 70 years 75,000

Contribution to PPF 80,000

LIC premium on the life of his wife 75,000

Practice – 17: Mr Gunasekar is employed with TI Wheels Ltd on a monthly salary of Rs 60,000
with Dearness allowance of Rs 12,000 per month. His and employer’s contribution to RPF @
15% on his basic pay. His other details are as under:

1. Dividend on 5,000 equity shares of Rs 100 each of ACC Ltd at 8%

2. Dividend in respect of 2000 Preference shares at Rs 15 per share. He has paid Rs
2,000 as collection charges.
3. Casual income from betting Rs 50,000
4. Royalty received in respect of book on Company Law Rs 2,00,000. He claims an
expenditure of Rs 40,000 in preparing manuscript.
5. Interest on Fixed deposit from HDFC Rs 25,000
6. Interest from savings bank account Rs 16,000
7. Short term capital gain on jewels Rs 10,000
8. He incurred Rs 10,000 on entertainment of the family members and Rs 2,500 on
purchase of books. Compute his taxable Income.

Computation of Taxable Income of Mr Gunasekar

Particulars Amount
Salary:
- Basic Pay 7,20,000
- Dearness Allowance 1,44,000
- Employer contribution to RPF 1,08,000
Less: Exemption upto 12% of salary 86,400
21,600
Gross Salary 8,85,600
Less: Standard deduction u/s 16(1) 50,000
Taxable Salary
8,35,600
Income from House Property
Nil
Capital Gains:
- Long term capital gain
Nil
- Short term capital gain from Jewels
10,000 10,000
Income from other source:
- Equity Dividend from ACC Ltd 40,000
- Preference dividend 30,000
Less: Deduction u/s 57(1):Collection charges 2,000 68,000
- Casual Income from betting 50,000
- Royalty receipts from Book 2,00,000
Less: Deduction u/s 57(6): Manuscript exp 40,000 1,60,000
- Interest on Fixed deposit in HDFC 25,000
- Interest on savings bank account 16,000 3,19,000

Gross Total Income

11,64,600

Less: Deduction under chapter VI-A (80C-80U):

- 80C: Own Contribution to RPF 1,08,000 or
1,08,000
Ceiling 1,50,000 w e l

80QQB: Royalty on Books 1,60,000 or

1,60,000
Ceiling 3,00,000 w e l

80TTA: Interest on SB account 16,000 or

10,000
Ceiling 10,000 w e l
2,78,000
Taxable Income
8,86,600
Tax Particulars: (Under OLD regime)
On Casual Income 50,000 @ 30% 15,000
On STCG 10,000 @ 15% 1,500
On Balance (8,26,600)
For First 2,50,000 -0-
Next 2,50,000 @ 5% 12,500
 Balance 3,26,000 @ 20% 65,200 94,200
Add: Cess@4% 3,768
Tax Payable u/s 140A 97,968

Tax Particulars: (Under NEW regime)

On Casual Income 50,000 @ 30% 15,000
On LTCG 10,000 @ 15% 1,500
On Balance (11,04,600)
For First 2,50,000 -0-
Next 2,50,000 @ 5% 12,500
Next 2,50,000 @ 10% 25,000
Next 2,50,000 @ 15% 37,500
Balance 1,04,600 @ 20% 20,920
Add: Cess@4% 1,12,420
Tax Payable u/s 140A 4,497 1,16,917

Ex – 17: Mr Gnanam is employed with ITC Ltd on a monthly salary of Rs 50,000 with Dearness
allowance (enters) of Rs 10,000 per month. His and employer’s contribution to RPF @ 14% on
his basic pay. His other details are as under:

a. Dividend on 30,000 equity shares of Rs 10 each of ABB Ltd at 10%

b. Dividend in respect of 3,000 Preference shares at Rs 12 per share. He has paid Rs
4,000 as collection charges.
c. Casual income from betting Rs 70,000(Net)
d. Royalty received in respect of book on Banking Law Rs 4,00,000. He claims an
expenditure of Rs 60,000 in preparing manuscript.
e. Interest on Fixed deposit from SBI Rs 40,000
f. Interest from savings bank account Rs 25,000
g. Short term capital gain on jewels Rs 40,000. Compute his taxable Income.

Practice – 18: Mr. Dravid prepared the following Profit and Loss account for the year ended on
31-03-2022. Compute taxable Income.

Expenditures Rs. Incomes Rs.

To Salary and Wages 5,00,000 By Gross Profit 15,00,000

To Repairs 25,000 By Sundry Receipts 3,00,000

To Bad Debts 8,000 By Rent from HP 1,20,000

To Provision for Bad Debts 10,000 By Profit on Sale of Shares(LTCG) 25,000

To Donation to school 25,000 By Bad debts recovered 7,000

To General expenses 5,000

To Provision for Gratuity 20,000

To Income Tax 15,000

To LIC Premium 20,000

To Wealth Tax 25,000

To Car Purchased 60,000

To Municipal Tax 6,000

To Car Expenses 5,000

To Patent 56,000

To Net Profit 11,72,000

19,52,000 19,52,000

Other Information:

1. Business Income Rs 42,000 is not shown in the P&L account

2. Depreciation worth Rs 5,000 not shown in the Profit and Loss account
3. Rs 50,000 worth of income not relating Business (Unexplained cash) is included in
Sundry receipts
4. Bad debts recovered include Rs 3,000 disallowed earlier.
5. Charge Depreciation on Car at 15%

Computation of Taxable Income of Mr Dravid

Particulars Amount in Amount in

Rs Rs

Income from House Property:

- Rent from Property GAV 1,20,000
Less: Municipal Tax paid 6,000
NAV 1,14,000
Less: Deduction u/s 24(1):
- Standard deduction @30% 34,200 79,800
Income from Business:
Net Profit as per Profit and Loss account 11,72,000
Add: Dis allowed Expenses: (28- 44D):
- Business Income not recorded earlier 42,000
- Provision for bad debts 40(A7) 10,000
- Donations to school 40(A9) 25,000
- Provision for Gratuity 40(A7)
20,000
- Income Tax
- LIC Premium(Personal) 15,000
- Purchase of Car (Capital nature) 20,000
- Municipal Tax 60,000
- Acquisition of Patent right (35A – 75%) 6,000 2,40,000
14,12,000

Less: Incomes Chargeable to Other Heads of Income

and Other Allowed expenses:
- Depreciation not recorded earlier 5,000
- Unexplained Cash (sec 69) 50,000
- Recovery of bad debts (disallowed earlier) 3,000
- Depreciation on Car (15%) 9,000
- Rent from House Property 1,20,000
- Long term capital gain on shares 25,000
` 2,12,000
Income from Business 12,00,000

Long term capital gain on shares: 25,000

Income from other sources: Unexplained Cash 50,000

13,54,800
Gross Total Income
Less: Deduction under chapter VI-A: (80C-80U):
80C: On LIC Premium Actual or ceiling w. e. l 20,000

Adjusted Gross Total Income 13,34,800

80G: Donation to School:
25,000
- Actual
1,30,980
Or Ceiling (13,34,800 – 25,000) @ 10%
Wel @ 50% 12,500

Taxable Income 13,22,300

Ex - 18: Mr. Sanmugam prepared the following Profit and Loss account for the year ended on
31-03-2022. Compute taxable income from business
 Expenditures Rs. Incomes Rs.

To Opening Stock 2,40,000 By Sales 24,50,000

To Purchases 7,50,000 By Closing Stock 4,80,000

To Wages 3,80,000 By Lottery Winnings 40,000

To Donations to PMNDR fund 40,000

To General expenses 80,000

To Depreciation 24,000

To Acquisition of know how 60,000

To Late fee in GST 20,000

To Advertisement 24,000

To Net Profit 13,52,000

29,70,000 29,70,000

1. Closing stock were overvalued by 20% and Opening stock undervalued by 20%
2. In general expenses Rs 40,000 paid to Government Youth skill development programmes
in the local area
3. Advertisement was paid in Bearer Cheque. Answer: Rs 13,01,000( 13,52,000
+24,000+40,000+45,000+20,000-80,000-60,000-40,000)

Practice – 19: Dr Lakshmi furnishes the following particulars of her Professional receipts and
payments. Compute her Taxable Income.

`Receipts Rs. Payments Rs.

To Balance b/d 5,000 By Staff Salary ,48,000

To Consulting Fee 4,00,000 By Rent of Clinic 60,000

To Visiting fee 2,60,000 By Surgical equipment 60,000

To Bank Loan 80,000 By Cost of medicine 1,20,000

To Rent from Property 1,20,000 By Donation to PM CARE fund 80,000

To Sale of Medicine 1,40,000 By Interest on Loan 16,000

 To Sale of Building 80,000 By Purchase of Car 3,40,000

To Sale of Furniture 24,000 By Car Expenses 15,000

To Interest from FD 40,000 By LIC Premium (self) 60,000

By Contribution to SPF 1,20,000

By Balance c/d 4,30,000

13,49,000 13,49,000

1. Opening stock of medicines was Rs 25,000 and Closing stock of medicines was
Rs.50,000.
2. 1/3 rd use of car for personal purposes.
3. Personal expenses include Rs 12,000 for purchase Refrigerator for Home.
4. WDV of Building and Furniture on 01-04-2021 was 36,000 and 10,000 respectively. .
Computation of Taxable Income from Profession of Dr Lakshmi:

Particulars Amount in Amount in

Rs Rs

Income from House Property:

- Rent from Property 1,20,000
Less: Deduction u/s 24(1) –Std deduction @ 30% 36,000 84,000

Professional Incomes:
4,00,000
- Consulting fee 2,60,000
- Visiting Fee 1,40,000 8,00,000
- Sale of Medicines
Less: Professional Expenses and Depreciation:
- Staff Salary 48,000
- Rent of Clinic 60,000
- Depreciation on Equipment (40%) 24,000
- Cost of Medicines Purchased 1,20,000
- Interest on Loan 16,000
- Depreciation on Car (3,40,000 * 15% * 2/3) 34,000
- Car Expenses (2/3) 10,000 3,12,000
Income from Profession 4,88,000

Capital Gains: (Short term)

1. Building: Sales consideration 80,000
Less: WDV as on 01-04-2021 36,000
44,000
2. Furniture: Sales consideration 24,000
 Less: WDV as on 01-04-2021 10,000
14,000 58,000
Income from Other source: Interest from FD 40,000

6,70,000
Gross Total Income
Less: Deduction under chapter VI-A: (80C-80U):
80C: On LIC Premium - 60,000 1,80,000
Contribution to SPF - 1,20,000 Actual 1,50,000 1,50,000
or ceiling

5,20,000
Adjusted Gross Total Income
80G: Donation to School: Actual 80,000
Or Ceiling 5,20,000 – LTCG-Nil) @ 10% 52,000
WEL@50% 26,000
Taxable Income 4,94,000
Note: 1. Opening stock and Closing Stock, be ignored, because Dr Lakshmi maintains books under Cash Basis. 2.
Purchase of Refrigerator out of Personal expenses, so ignored 3.Treated that loan taken for her professional use only
Ex - 19: Dr Jaya Lakshmi furnishes the following particulars of her Professional receipts and
payments.

Receipts Rs. Payments Rs.

To Balance b/d 25,000 By Staff Salary 2,40,000

To Consulting Fee 5,00,000 By Rent of Clinic 72,000

To Visiting fee 4,00,000 By Surgical equipment 2,00,000

To Bank Loan(Personal) 60,000 By Cost of medicine 80,000

To Rent from Property 1,80,000 By Personal expenses 90,000

To Sale of Medicine 1,60,000 By Interest on Loan 26,000

To Sale of Building 60,000 By Purchase of Car 3,40,000

To Sale of Furniture 40,000 By Car Expenses 75,000

To Interest from FD 30,000 By LIC Premium for self 62,000

By Donation to NDF 50,000

By Balance c/d 20,000

14,55,000 14,25,000
 1. Opening stock of medicines was Rs 65,000 and Closing stock of medicines was
Rs.90,000.
2. 60% use of car for personal purposes.
3. Personal expenses include Rs 24,000 for purchase Refrigerator for Office use.Charge
Depreciation @15%.
4. WDV of Building and Furniture on 01-4-2021 were Rs 35,000 and
15,000respectively. Compute her Income from Profession.

Practice – 20: Compute the Taxable of Mr Manimaran aged 62 years:

1. Income from House Property: Rent received Rs 2,40,000

2. Income from Non speculation business Rs 3,80,000
3. Income from speculation in Gold Rs 75,000
4. Loss from specified business u/s 35AB Rs 60,000
5. Capital Gains: - Long term Debentures Rs 40,000
Short term from Bonds Rs 1,10,000 Rs 1,50,000
6. Received sum from Lottery(Purchase of Lottery tickets Rs 15,000) Rs 35,000
7. Dividend from Indian company Rs 15,000
8. Dividend from Foreign company Rs 40,000
9. Interest from POSB account Rs 5,500
10. Interest on Fixed Deposit Rs 70,000

He made the following payments during the previous year:

a. Life insurance premium paid Rs 28,000 on a policy of Rs 2,50,000
b. Contribution to SPF Rs 80,000
c. Donation to charitable local trust Rs 60,000
d. Expenditure for the medical treatment of a dependent person with severe disability.

Particulars Amount

Income from House Property:

- Rent received GAV 2,40,000
- Less: Standard deduction u/s24(1) 30% of GAV) 72,000 1,68,000

Income from Business: Non speculation business 3,80,000

Income from speculation business in Gold 75,000
Loss from Specified Business u/s 35AB (to be carry forwarded) Nil 4,55,000
Capital Gains:
- Long term capital gain from Debentures 40,000
Short term capital gain from Bonds
1,10,000 1,50,000
Income from other source:
- Casual Income – Lottery Gains (Gross) 50,000
- Dividend from Indian company 15,000
- Dividend from Foreign company 40,000
- Interest on POSB account 5,500
- Less: Exemption u/s 10(15) 3,500
- Interest on F D 2,000
70,000 1,77,000
Gross Total Income 9,50,000

Less: Deduction under chapter VI-A (80C-80U):

- 80C: Contribution to SPF 75,000
LIC Premium 25,000 Actual or 1,00,000
Ceiling 1,50,000 1,50,000 1,00,000
80DD: Medical treatment of dependent (Severe) 1,25,000

80TTB: Interest on Fixed Deposit (Actual or ceiling) 50,000

Adjusted Gross Total Income 6,75,000

80G: Donation to Charitable Trust
a. Rs 60,000 Actual or
b. Rs 63,500 ceiling w e l @ 50% 30,000

Taxable Income 6,45,000

Tax Particulars: (Under OLD regime)
On Casual Income 50,000 @ 30% 15,000
On LTCG 40,000 @ 10% 4,000
On Balance (5 55,000)
For First 2,50,000 -0-
Next 2,50,000 @ 5% 12,500 42,500
Balance 55,000 @ 20% 11,000 1,700
Add: Cess@4% 44,200
Tax Payable u/s 140A

Tax Particulars: (Under NEW regime)

On Casual Income 50,000 @ 30% 15,000
On LTCG 40,000 @ 10% 4,000
On Balance (8,10,000)
For First 2,50,000 -0-
Next 2,50,000 @ 5% 12,500
Next 2,50,000 @ 10% 25,000
 Balance 60,000 @ 15% 9,000
Add: Cess@4% 55,500
Tax Payable u/s 140A 2,220
57,720

Ex – 20: Compute the Taxable of Mr Nandakumar aged 62 years:

a. Income from House Property: Rent received Rs 4,80,000

b. Income from Non speculation business Rs 6,80,000
c. Income from speculation in Gold Rs 95,000
d. Loss from specified business u/s 35AB Rs 80,000
e. Capital Gains: - Long term Debentures Rs 40,000
Short term from Bonds Rs 60,000 Rs 1,00,000
f. Received sum from Lottery(Purchase of Lottery tickets Rs 15,000) Rs 70,000
g. Dividend from Indian company Rs 75,000
h. Dividend from UTI Rs 60,000
i. Interest from POSB account Rs 15,500
j. Interest on Fixed Deposit Rs 60,000

He made the following payments during the previous year:

a. Life insurance premium paid Rs 58,000 on a policy of Rs 5,00,000

b. Contribution to SPF Rs 1,20,000
c. Donation to PM Care Fund Rs 1,00,000
d. Contribution to Medical insurance plus Preventive check up Rs 40,000
e. Expenditure for the medical treatment of a dependent person with severe disability.

Practice -21: Following particulars is the receipts and payments account of Mr Naresh, an
Chartered Accountant for the previous year.

Receipts:

- Audit fees Rs 8,00,000

- Consultation fee Rs 3,00,000
- Appellate Tribunal Appearance Rs 1,20,000
- Miscellaneous fee Rs 1,80,000
- Interest on Savings Bank account Rs 25,000
- Rent Received Rs 3,60,000
- Long term capital gain from Listed Debentures Rs 80,000
Payments:

- Office expenses Rs 80,000

- Office Rent Rs 72,000
- Salaries and Wages Rs 1,68,000
- Printing and Stationary Rs 16,000
- Subscription to CA Institute Rs 10,000
- Purchase of Books for Professional use Rs 16,000
- Donation to National Defense Fund Rs 50,000
- Contribution to SPF Rs 80,000
Medical Insurance Premium plus check up Rs 40,000
Compute taxable income from Profession, being Dep on books are 40%.

Computation of Taxable Income of Mr Naresh

Particulars Amount in Amount in

Rs Rs

Income from House Property:

- Rent received GAV 3,60,000
- Less: Standard deduction u/s24(1) 30% of GAV) 1,08,000 2,52,000
Professional Incomes:
- Audit fees 8,00,000
- Consultation fee 3,00,000
- Appellate Tribunal Appearance 1,20,000
- Miscellaneous 1,80,000 14,00,000
Less: Professional Expenses and Depreciation:
80,000
- Office expenses
72,000
- Office Rent
1,68,000
- Salaries and Wages
16,000
- Printing and Stationary
10,000
- Subscription to CA Institute
6,400 3,52,400
- Dep. On Prof Books (40%)
Income from Profession 10,47,600

80,000
Capital Gains: Long term capital gain (Listed Debentures) 25,000
Income from other source: Interest on SB account 14,04,600
Gross Total Income

Less: Deduction under chapter VI-A (80C-80U):

- 80C: Contribution to SPF 80,000 or
Ceiling 1,50,000
80,000
80D: Medical Insurance premium
Actual or Ceiling 30,000
80TTA: Interest on Savings Bank
 Actual or ceiling 10,000 1,20,000

Adjusted Gross Total Income 12,84,600

50,000
80G: Donation to NDF at 100%
12,34,600
Taxable Income
Tax Particulars: (Under OLD regime)
On Casual Income Nil @ 30% Nil
On LTCG 80,000 @ 10% 8,000
On Balance (11, 54,600)
For First 2,50,000 -0-
Next 2,50,000 @ 5% 12,500
Next 5,00,000 @ 20% 1,00,000
Balance 1,54,600 @ 30% 46,380 1,66,880
Add: Cess @ 4% 6,675
Tax Payable u/s 140A 1,73,555
Tax Particulars: (Under New Regime)
On Casual Income Nil @ 30% Nil
On LTCG 80,000 @ 10% 8,000
On Balance (13,24,600)
For First 2,50,000 Nil
Next 2,50,000 @ 5% 12,500
Next 2,50,000 @ 10% 25,000
Next 2,50,000 @ 15% 37,500
Next 2,50,000 @ 20% 50,000
Balance 74,600 @ 25% 18,650 1,51,650
Add: Cess @ 4% 6,066
Tax Payable u/s 140A 1,57,716

Ex - 21: Following particulars is the receipts and payments account of Mr Krishnakumar, aged
63 years an Chartered Accountant for the previous year.

Receipts:

- Audit fees Rs 8,00,000

- Consultation fee Rs 4,00,000
- Appellate Tribunal Appearance Rs 1,80,000
- Presents from Clients Rs 80,000
- Miscellaneous receipts Rs 2,00,000
- Interest on Fixed Deposit Rs 60,000
- Rent Received Rs 96,000
 - Race Winnings (Gross) Rs 50,000
Payments:

- Office expenses Rs 1,60,000

- Office Rent Rs 1,44,000
- Salaries and Wages Rs 2,80,000
- Stipend to Articles Clerks Rs 60,000
- Printing and Stationary Rs 18,000
- Subscription to CA Institute Rs 12,000
- Purchase of Books for Professional use Rs 25,000
- Donation to Rajiv Gandhi Memorial Fund Rs 50,000
- Tuition fee paid for his three children Rs 60,000 each
- Medical insurance premium self & Family Rs 75,000
Compute taxable income being Dep on books are 40%.

Assignment:

Ex-1 (Nov 2019): A Chartered Accountant has supplied the following particulars.
Compute his total income for the assessment year 2022–23.

(a) Professional gain Rs 52,400

(b) Rent received from houses at Delhi Rs 18,000
(c) Municipal taxes Rs 1,500
(d) Long-term capital gain (Loss) Rs 10,000
(e) Part time salary as lecturer in tax laws Rs 25,000
(f) Rent paid at Kanpur Rs 2,500 p.m
(g) Interest on govt securities Rs 25,000

Ex-2 (April 2019): Calculate the deduction allowable under section 80 GG to an assessee having
the following incomes for the assessment year:
- Business income Rs. 55,000
- Income from Bank Rs. 5,000
- Other Income Rs. 60,000
- Rent paid by him for a house occupied for the purpose of residence Rs. 1,250 per month.