ILLUSTRATION 1
Mr. A invested Rs. 100000 in 9% tax –free debentures of a company. What will be his
taxable interest for the previous year ending on 31-03-2024 if the rate of deduction of a tax at
source is @ 10% interest accrues on 1st January every year.
SOLUTION:
Net interest due = 100000 x 9/100
=Rs.9000
Grossed up = 9000x 100/(100-10) = 9000x100/90 = Rs.10000
Interest to be added in gross total income of Mr. A for the previous year ending 0n
31-03-2024 shall be Rs. 10000.
ILLUSTRATION 2
From the following particulars of Mr. Amarpreet Thind, compute the amount of taxable
gifts chargeable as “Income under the head other sources” :
i. He received a cheque of Rs. 100000 as a gift from his grandfather on 15 May 2023.
ii. He received Rs. 21000 from his friend from Canada as a gift on 31 May 2023.
iii. He received Rs. 500000 under a will from his grandmother on 30 June 2023.
iv. He received Rs. 50000 from his father’s friend on 30 June 2023.
v. He received Rs. 75000 as a gift from his uncle on 30 September 2023 on his birthday.
vi. He received Rs. 20000 as gift from his employer on 1 October 2023.
vii. He received a gift of Rs. 51000 from his father’s brother 0n 30 November 2023.
SOLUTION:
Calculation of taxable gifts chargeable under the head income from other sources
Monetary gifts RS.
Gift cheque from grandfather on 15 May NIL
2023
(Exempt as received from relative)
Cash gift from friend from Canada on 31 21000
May 2023
Cash gift from grandmother under a will NIL
on 30 June 2023
(Exempt as received from relative)
Cash gift from father’s friend on 30 June 50000
2023
Cash gift from uncle on 30 September 75000
2023
Cash gift from employer on 1 October NIL
2023
Cash gift from father’s brother on 31 NIL
November 2023
(Exempt as received from relative)
TOTAL MONETARY GIFTS 146000
ILLUSTRATION 3
Mr. X has the following incomes during the year ending 31-03-2024;
1. Dividend declared by M .Co. on 31-3-2023(Indian Co.) 6000
2. Dividend declared by Z Co. on 31-3-2024(Indian Co.) 9000
3. Interim dividend received on 1-5-2023(Indian Co.) 3000
4. He won gold worth Rs. 1000000 from Punjab state lottery
5. During March 2024 he earned Rs. 100000 incurred on maintenance of horse races.
These horses are owned by him and expenditure incurred on maintenance of these
horses amounted to Rs. 160000.
Compute income from other sources for the assessment year 2024-2025.
SOLUTION ;
COMPUTATION OF INCOME FROM OTHER SOURCES
DIVIDEND RS
Declared by M .Co. on 31-3-2023 NIL
(not income of 2023-24)
Declared by Z co on 31-3-2024— 9000
Taxable
Interim dividend received on 1-5- 3000
2023—Taxable
Winning from lottery:
Gold from Punjab state lottery 1000000
Prize money of races horses
I. Declared by M .Co. on 31-3-2023 (not income of 2023-24) NIL
II. Declared by Z co on 31-3-2024—Taxable 9000
III. Interim dividend received on 1-5-2023—Taxable 3000
Winning from lottery:
Gold from Punjab state lottery 1000000
Prize money of races horses 100000
Less: Expenses on maintenance of these horses 160000
Less : to be carried forward 60000 NIL
Income from other sources 10,12,000
ILLUSTRATION 4
Income of D and Mrs. D for the previous year 2023-24 is as follows :
Mr. D Mrs. D
Salary from Himalaya ltd. 215000 NIL
Capital gain : Short term 90000 NIL
Income from other sources :
Bank interest 12000 6250
Interest on Govt. securities 3600 2750
Total 320600 9000
D, having no qualifications or experience, is employed by Himalayas Ltd. Mrs. D holds 22%
equity share capital in Himalayas Ltd. From September 12, 2023. Find out the gross total
income of D and Mrs. D for the assessment year 2024-25.
SOLUTION :
INCOME Mr. D Mrs. D
Salary received by Mr. D shall be added in the
income of Mrs. D as she holds 20% or more equity
shares in the company in which her husband is an
employee and Mrs. D does not posses any qualifications or
experience NIL
215000
capital gains : Short term 90000 NIL
Income from other sources :
Bank interest 12000 6250
Interest on Govt. Securities 3600 15600 9000
GROSS TOTAL INCOME 105600 224000
ILLUSTRATION 5
From the following particulars given below compute the total income of Mr. X for the
assessment year 2024-25 under old tax regime explaining each point clearly:
1. Income from profession
86500
2. Income of minor son (singing in his profession) 12000
3. Winnings from lottery : ticket purchased in the name of the Mr. X’s
minor daughter
6800
4. Mr. X’s father gifted debentures in an Indian company to Mr. X’s
minor son and company paid gross interest 6650
5. Mr. X’s wife is a government servant and her income
Computed under the head salaries 56000
6. Interest on debentures purchased by Mr. X but gifted to
Mrs. X
18000
SOLUTION:
Computation of total income of Mr. X under old tax regime:
Profits and gains of business or profession
RS.
Income from profession :
86500
Income from other sources:
1. Interest on debentures gifted to wife (Note 1) 18000
2. Winnings from lottery ticket in the name of minor
daughter 6800
less: Exempted u/s 10(32) (Allowed under old tax regime) 1500
Taxable amount 5300
3. Interest accruing on the income of minor son 5150
(6650 less exemption u/s 10(32) – 1500) 28450
GROSS TOTAL INCOME AS TOTAL INCOME 114950
ILLUSTRATION 6
The following are the particulars of income and loss of an individual under different heads of
income. Set-off losses in the assessment year 2024-25 and find out gross total income (A)
under old tax regime and under new tax regime:
RS.
Income from house property A 5000
Income from house property B (-)8000
Income from interest on securities 20000
income from a cycle business (-)20000
profit from speculation business 20000
loss from short-term capital asset 6000
Long-term capital loss 25000
Long-term capital gain (Investments) 21000
SOLUTION:
(A) Computation of gross total income (under old tax regime)
House property income: RS. RS.
Income from house property A 5000
Income from house property B (-)8000
Can be set-off against income of other heads (-)3000
Business income:
Profit from speculation business 20000
Profit from cycle business (-)20000
NIL
Capital gains:
Long-term capital gains (+)21000
Income from another long-term capital asset (-)25000
Long-term capital loss to be C/F 4000
Short-term capital loss to be C/F 6000
Income from other sources:
Interest on securities 20000
Gross total income 17000
(B) Calculation of gross total income (under new tax regime):
Under new tax regime, loss U/H house property cannot be set-off against income
of other heads:
Gross total income = Rs.20000.
ILLUSTRATION 7
Computable taxable income and loss to be C/F under old tax Regime :
RS.
i. Business profit for the previous year 2023-24
20000
ii. B/F business loss of 2021-22
10000
iii. Capital loss on shares
60000
iv. Loss from self-occupied house (u/s 24)
5000
SOLUTION:
Adjustment of losses during Assessment year 2024-25
(under old tax regime)
RS.
House property: income from self-occupied house (u/s 24) (-)5000
Profits and gains: business profit (-)20000
Available income (+)15000
B/F Business loss of 2021-22 10000
Total income (+)5000
Capital gain: capital loss to be C/F 60000
Long term capital loss of shares (STT paid) not allowed to be C/F and so it is ignored.
ILLUSTRATION 8
From the following particulars of Mr. X, compute the amount of deduction u/s 80C for the
previous year 2023-24 under old tax regime.
₹
1. Life insurance premium paid – on 30000
own policy
- On the life of wife 10000
- On the life of father 10000
- On the life of married daughter and her 10000
husband (joint policy)
All life policies were taken in 2010
2. Contribution of recognised provident
fund Rs.2000 p.m. 24000
3. Deposit in public provident fund in 45000
March, 2024
4. Group insurance premium 3000
5. Investment made during 2023-24 in 10000
N.S.C. (Ⅷissue) out of agriculture
income
6. Repayment of loan taken from L.I.C. 48000
for the construction of residential
house ₹ 4000 p.m. including ₹ 1000
p.m. as interest
7. Accured interest on NSC (Ⅷissue) 4000
8. Insurance premium on the life of 8000
minor son paid on 2.4.2024
SOLUTION:
Computation of qualifying amount u/s C for assessment year 2024-25
(under old tax regime)
1. Life insurance premium paid during the
previous year 2023-24
- On own life-qualifies for deduction 30000
- On life of wife-qualifies for deduction 10000
- On the life of father-does not qualify NIL
- On the joint life policy of daughter and
her husband-does not qualify NIL
2. Contribution to recognized provident
fund (qualify for deduction) 24000
3. Deposit in public provident fund during
2023-24 45000
4. Group insurance premium paid during
2023-24 3000
5. Investment made to buy NSC 10000
(Ⅷissue)
6. Repayment of loan taken from LIC for
construction of house 36000
7. Accured interest on NSC (Ⅷissue) 4000
TOTAL QUALIFYING SAVINGS 162000
Least of following two amount shall be the deduction u/s 80 C:
1. Total qualifying savings ₹ 1,62,000
2. ₹1,50,000
Therefore, deduction u/s 80 C is ₹1,50,000.
ILLUSTRATION 9
Mr. A got medical insurance of self-paid by cheque
₹
1. Mr. A got medical insurance of self-paid
by cheque 10000
2. Medi-claim premium of wife paid in
cash 5000
3. Medical insurance premium of 16 years
old son paid by cheque to a private
insurance company approved by
Insurance Regulatory and Development
Authority 3000
4. Medi-claim premium paid on the
medical insurance of his father and
mother 22000
5. Medi-claim premium on the policy of
dependent younger brother 4000
6. Preventive medical check-up of wife 4000
Calculate amount of deduction u/s 80D under old tax regime.
SOLUTION:
Calculation of amount of deduction u/s 80D (under old tax regime)
₹
Medi-claim premium of self 10,000
Medi-claim premium of dependent son 3000
Medi-claim premium of wife paid in cash (not
eligible) NIL
Preventive medical check-up of wife 4000
17,000
Actual premium paid ₹17000 or ₹25000
whichever is less 17,000
Medi-claim premium paid for father and
mother
Actual amount paid ₹22000 or ₹50000
whichever is less 22,000
Medi-claim premium paid for the policy of
dependent brother (not eligible) NIL
TOTAL AMOUNT ALLOWED AS DEDUCTION
UNDER SECTION 80D 39,000
ILLUSTRATION 10
Compute the amount of tax payable for the assessment year 2024-25 under old tax regime in
following cases:
a) Total income of Mr. X is ₹5,20,064;
b) Income of Mr. Y is a (resident senior citizen) is ₹5,20,064;
c) Income of Mr. Z (a resident super senior citizen) is ₹5,20,064;
d) Income of Mr. A is as under;
Income from salary ₹4,20,000
Income from short term capital gain = ₹30,000
Income from long term capital gain = ₹40,000
Winning from lottery = ₹50,000.
SOLUTION:
Computation of tax liability under old tax regime
Case (a) total income of Mr. X ₹5,20,060 ₹
(rounded off to ₹5,20,060)
Tax on first ₹2,50,000 NIL
Tax on next ₹2,50,000 @ 5% 12,500
On balance ₹20,060 @ 20% 4012
TOTAL 16,512
Add: health and education cess @ 4% of
₹16,512 660
TAX 17,172
TAX ROUNDED OFF TO ₹17,170.
