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Exercise 11.1 · Q2

Q.Mr A had Income from Salary of ₹3,00,000. Income from House property rentals comes out to be ₹1,50,000. Income from Capital gains is ₹3,00,000. Income from other sources is ₹50,000. Deduction made under section 80C: PF – ₹40,000; PPF – ₹40,000; Fixed deposits – ₹30,000; LIC – ₹40,000. Calculate the Income Tax liability of Mr. A.

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Aggregate Mr A's income across four heads (after standard deduction on salary), cap the 80C deduction, apply slab rates and cess — no rebate applies since taxable income exceeds ₹5,00,000.

Gross Total Income == (Salary −- Standard Deduction) ++ House Property ++ Capital Gains ++ Other Sources. Taxable Income == Gross Total Income −- 80C deductions (capped at ₹1,50,000). Old-regime slabs (FY 2019-20): Nil to ₹2,50,000; 5% on next ₹2,50,000; 20% on next ₹5,00,000; 30% above ₹10,00,000. Cess =4%=4\% of tax. Section 87A rebate applies only if taxable income ≤₹5,00,000\le₹5{,}00{,}000.

Given: Salary =₹3,00,000=₹3{,}00{,}000; House Property =₹1,50,000=₹1{,}50{,}000; Capital Gains =₹3,00,000=₹3{,}00{,}000; Other Sources =₹50,000=₹50{,}000; 80C: PF ₹40,000 + PPF ₹40,000 + FD ₹30,000 + LIC ₹40,000.

  1. Standard Deduction on Salary:

Net Salary=300000−50000=₹2,50,000\text{Net Salary}=300000-50000=₹2{,}50{,}000

  1. Gross Total Income:

250000+150000+300000+50000=₹7,50,000250000+150000+300000+50000=₹7{,}50{,}000

  1. 80C deductions: 40000+40000+30000+40000=₹1,50,00040000+40000+30000+40000=₹1{,}50{,}000 — exactly at the cap, so fully allowed.
  2. Taxable Income: 750000−150000=₹6,00,000750000-150000=₹6{,}00{,}000 …

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