To calculate Mr.

B's taxable income and tax liability, we need to consider all sources of
income and the deductions available under the Indian Income Tax Act.

Income Sources:
1. Business Income: ₹75,00,000
2. Gift from Ex-Wife: ₹6,00,000 (Note: Gifts from specified relatives are not taxable,
hence this is not considered taxable income.)
3. Lottery Winnings: ₹19,00,000 (Taxable at a special rate)
4. Matured Life Insurance Policy: ₹32,00,000 (Subject to certain conditions for tax
exemption)

Expenditures and Investments:

1. Family Trip Expense: ₹15,00,000 (Not deductible)
2. Gift to Wife: ₹4,50,000 (Not deductible)
3. Life Insurance Premium: ₹50,000 annually (Eligible for deduction under Section 80C)
4. Tuition Fee for Daughter: ₹50,000 (Eligible for deduction under Section 80C)
5. PPF Investment: ₹80,000 (Eligible for deduction under Section 80C)
6. Medical Test: ₹6,000 (Not deductible)
7. Health Insurance Premium: ₹27,000 (Eligible for deduction under Section 80D)

Working Notes:
1. Calculate Gross Total Income
a. Business Income: ₹75,00,000
b. Lottery Winnings: ₹19,00,000 (Taxed at 30% flat rate, no deductions allowed)
c. Matured Life Insurance Policy: ₹32,00,000 (Assumed exempt if it qualifies
under Section 10(10D))
Total Gross Income (excluding non-taxable items):-
₹75,00,000 (Business Income) + ₹19,00,000 (Lottery Winnings) = ₹94,00,000

2. Deductions under Section 80C

 Life Insurance Premium: ₹50,000
 Tuition Fees: ₹50,000
 PPF Investment: ₹80,000
Total 80C Deductions:-
₹50,000 + ₹50,000 + ₹80,000 = ₹1,80,000
 Note: Maximum allowable deduction under Section 80C is ₹1,50,000.

3. Deductions under Section 80D

 Health Insurance Premium: ₹27,000

4. Calculate Net Taxable Income

a. Income excluding Lottery Winnings:
₹75,00,000 (Business Income)
b. Deductions:
 Section 80C: ₹1,50,000 (Max allowed)
 Section 80D: ₹27,000
Total Deductions:-
₹1,50,000 + ₹27,000 = ₹1,77,000

Net Taxable Income excluding Lottery Winnings:-

₹75,00,000 - ₹1,77,000 = ₹73,23,000

c. Taxable Income including Lottery Winnings:-

₹73,23,000 + ₹19,00,000 (Lottery Winnings) = ₹92,23,000

5. Calculate Tax Liability

a. Tax on Regular Income: ₹73,23,000
 Income up to ₹2,50,000: Nil
 ₹2,50,001 to ₹5,00,000: 5% of ₹2,50,000 = ₹12,500
 ₹5,00,001 to ₹10,00,000: 20% of ₹5,00,000 = ₹1,00,000
 Above ₹10,00,000: 30% of ₹63,23,000 = ₹18,96,900
Total Tax on Regular Income:-
₹12,500 + ₹1,00,000 + ₹18,96,900 = ₹20,09,400

b. Tax on Lottery Winnings: ₹19,00,000

 30% of ₹19,00,000 = ₹5,70,000
 Plus 4% Health and Education Cess on lottery tax: ₹5,70,000 4% =
₹22,800
Total Tax on Lottery Winnings:-
 ₹5,70,000 + ₹22,800 = ₹5,92,800

c. Total Tax Liability:-

₹20,09,400 (Regular Income Tax) + ₹5,92,800 (Lottery Tax) = ₹26,02,200

d. Add Health and Education Cess on Regular Income Tax:-

4% of ₹20,09,400 = ₹80,376

Final Total Tax Liability:

₹26,02,200 + ₹80,376 = ₹26,82,576

Conclusion
Mr. B's total taxable income is ₹92,23,000 and
his total tax liability is ₹26,82,576.