17

COMPUTATION OF TAX
LIABILITY OF INDIVIDUALS
Rates of Income Tax
The following are the rates ofincome tax for the Assessment Year 2020-21:
In the case of every Individual or Hindu Undivided Family or Association of Pereons or
Body ofIndividuals
(a) Individual-Senior citizen (resident in India, who is of the age of 60 years or more but
less than 80 years during the previous year)
On 3,00,000 Nil
Next on 7 2,00,000 5%
Next on 7 5,00,000 20%
Next-Balance 30%
b) Individual-Super senior citizen (resident in India, who is of the age of 80 yearsor
moreduring the previous year):
On 5,00,000 Nil
Next on 7 5,00,000 20%
Next-Balance 30%
(c) Other individuals, HUF, AOP or BOI:
On F 2,50,000 Nil
Next on F 2,50,000 5%
Next on 7 5,00,000 20%
Next-Balance 30%
Rebate of income tas: In the case of an individual resident in
India, whose total income
does not exceed z 5,00,000, shall be entitled to a deductionfrom the amount
up to 12,500.
of income tax payable
(Sec. 87A)
Sureharge
G) @ten per cent of such income tax in case of a person
fifty lakh rupees but not exceeding one crore rupees;
having a total income exceeding
i) @fifteen per cent of such income tax in case of a person
but not exceeding two crore having a total income exceeding
one crore
rupees rupees;
iii)@ twenty five per cent of such income tax in case of a person a total income
exceeding two crore rupees but not exceeding five crore rupees; having
and
iv)@thirty seven per cent of such income tax in
of a person having a total incom
case
exceeding five crore rupees.
Marginal relief-Where total income exceeding:
G) fifty lakh rupees but not exceeding one
income tax and surcharge on such incomecrore rupees, the total amount payable
shall not exceed the
fifty lakh rupees by more than the amount paya
as income tax on a total income of total
that exceeds fifty lakh rupees amount of inc
i) one crore rupees but not
exceeding two crore
income tax and surcharge on such income shall rupees, the total amount payable,
not exceed the total amount pay3
 COMPUTATION OF TAX LIABILITY
OF
income tax on a total income of one
INDIVIDUALS 483
exceed: one crore crore
that rupees; rupees by 1more than the amount of incom
ii) two crore
rupees but not
income tax and surcharge exceeding
income tax on a tOtal incomesuch income shall rupees
on
five
not exceed
crore es, the total amount payable as
of two ed the total amount
that exceeds two crore rupees; and crore rupees by more than the amount or payable
rore rupees, the
total amount payable as income hoa
oll not exceed the total amount payable as tax and surcharge on
nes by more than income such income
the amount of income tax on a total income
me of five crore
1eh&Education Cess: On the that
amount of incomeexceeds five crore
rupees.4%
tax and surcharge, shall De
|ee Roun ding off any amount payable and
refund
penalty, fine, etc.) and the amount
(tax, i n t e r e s t ,
due (section 288B) :
Any amount pay
of ten rupees.
of refund due shall be rounded
multiple off to the nearest
Tax oron Short-term Capital Gains
equity orlented fund arising from equity share in a companyy or unit of an
See chapter on "Capital Gains
unit of an
(Sec. 111A)
Tax on Long-Term Capital Gains
See chapter on Capital Gains'. (Sec. 112 & 112A4
Tax on Winnings from Lotteries, Crossword Puzzles, etc. (Sec. 115BB)
Where the income of
an assessee includes income by way of winnings from
crossword puzzle or race including horse raceany(not lottery
being income from the activityany
ar

End maintaining race horses) or card of owning

game and other
hetting of any form or nature whatsoever, the income taxgame of any sort or from gambling or
(i) on aforesaid income @ 30%, and payable shall be the aggregate of:
(i) the amount of income tax with which the
assessee would have been
by the amount of income referred tochargeable
total income has been reduced had his
in (i) above.
Surcharge : For surcharge and marginal relief (see Ante).
Health & Education Cess : On the amount
of income tax and surcharge 4%.
Tax on dividends received from domestic companies (Sec. 115BBDA
Who is liable to pay tax All resident
i) a domestic
: persons except:
company;
i) a fund or institution or trust or any university or other educational institution
Upital or other medical institution or any
mentioned in Sec. 10(23C).
1) a trust or institution registered under Sec. 12A or 12AA of the Income-Tax Act.

uantum of dividends declared distributed or paid: In aggregate exceeding ten lakh.

ate of taxation: i) On the amount of dividends exceeding 7 ten lakh@ 10.
On the balance of total income as per other provisions of the Act.
raertain deductions not allowed From the amount of dividends, any expenditure or allowance
Se-off of losses shall not be allowed.
otes:1. Dividends shall
shal not include the amount
of dividends falling in Sec. 222Me).
urcharge, marginal relief and health & education cess see Rates of lncome Tax
Tax
on on Income
Inco
from Transfer of Carbon Credit (w.e.1. the Assessment Year 2018-19)
(Sec. 115BBG)
Who is liable
to pay tax: All assessees.
ate of taxation:
:(i) Income from transfer of Carbon Credits @ 10%, and
Certebalance of total income as per other provisions of the Act.
Certain deductio
De allowed. tions not allowed: From such income, any enditure or allowance shall not

Explanation:
Note:e Por ation : Carbon Credit can be traded in the market at its prevailing market
drge, marginal relief and health & education cess see Rates of Income Tax
price.
486 INCOME TAX

COMPUTATION OF ASSESSMENT FOR THE ASSESSMENT YEAR 2020-21

The computation of the assessment of an assessee is done in the follovwing manner
(1) Compute the gross total income of the assessee.
(2) Deduct therefrom the deductions admissible under sections 80C to 80U. TheThe balance
balane
is called total income.
T h e total income is rounded off to the nearest multiple of7 10.
(4) Where the assessee is an individual or H.U.F. or a body of individuals or other
association of persons whose total income exceeds exemption limit and the net
agricultural income, if any, exceeds 7 5,000, the net agricultural income and total
income are aggregated.
(5) Calculate income tax on the aggregate other income at the specified rates and on
short-term capital gains specified in section 111A and on long-term capital gains us
l12, or ws 112A, as if such aggregate income were the total income.
(6) Calculate income tax on the net agricultural income as increased by exemption limit,
as if such increased net agricultural income were the total income.
(7) The amount of income tax determined under (6) above will be deducted from the
amount of the income tax determined under (5) above.
(8) The balance of amount of income tax left as per (7) above will be the income tax in
respect of the total income.
9) Find out the average rate of income tax by dividing the income tax determined under
(8) above by the total income.
(10) Ascertain the amounts included in total income which are exempt from income tax at
the average rate.
(11) Calculate the amount of rebate to be granted on the exemptions at the average rate of
income tax (share of a member from an association of persons or body of individuals)
and deduct it from income tax calculated under (8) above.
(12) Add surcharge, if any, and health & education cess on the amount of income tax and
surcharge.
(13) Deduct the following from the amount of tax calculated under No. (12) above:
(i) Tax deducted and collected at the source.

(ii) Advance tax paid.

(iii) Double taxation relief.
140A (Self-assessment).
(iv) Amount of tax paid under section
amount left after deduction of items given in No. (13) above, shal be
(14) The balance of
the net tax payable by the assessee or if the aggregate of the amount to be deducted
under item (13) above, exceeds the aggregate amount of tax determined in No. (
the amount refundable to the assessee.
above, the excess shall be
(15) Along with the amount of net tax payable, the assessee shall have to pay penalties or fines
under the Income Tax Act.
if any, imposed on him
of Tax of a n Individual Neither
Chart Showing Computation
n o r a Super Senior citizen resident in India
A Senior citizen
(Assessee does not have Agricultural Income)
at special rates
(A) Tax on income liable to tax card game, betting, horse race etc.) @ 30%
****

(a) Casual income (Lottery,

ws 111A @15%
(6)Short-term capital gains
us 112.
C)Long-term capital gains or zero coupon bonds
i) On listed securities excluding units
****

Computed without indexing

the cost of acquisition@ 10%
i ) Other LTCG @ 20%
(d) LTCG us 112A@ 10%
 COMPUTATION OF TAX LIABILITY 487
OF INDIVIDUALS
on other income (Normal rates):
onfirst 2,50,000
Nil
n Dext? 2,50,000 @5%
on
next
5,00,000
@20% ***

on balance 30%
***

Add Surcharge
***

Add : Health & Education Cess @ 4%

Gross Tax
Less: (i) Tax deducted at Source
ii) Tax paid in advance
**********

Net Tax payable

Rounded off .
Chart Showing Computation of Tax of an Individual
a Senior citizen nor a
Neither
Super Senior Citizen resident in India
Assessee has Agricultural Income)
Total Income
Add Agricultural Income
Aggregate Income
Tax on Aggregate Income:
(A) Tax on income liable to tax at special rates
(a) Casual income @ 30% ********

(b) Tax on STCG u/s 111A@ 15%

(c) Tax on LTCG w/s 112@ 20%/10%
(d) Tax on LTCG Ws 112A @ 10%
(B) Tax on balance of income
(Aggregate income - income in (A) at normal rates)

Less: Tax on agricultural income +7 2,50,000 at normal rates

Add : Surcharge

Add Health &

Education.Cess 4% Gross Tax **°

Less: (i) Tax deducted at Source ******

ii) Tax paid in advance

Net Tax Payable °*°**°*°

Rounded off?.
lustration1
From the
e tollowing information compute tax payable by Mr. Ram for the Assessment Year
2020-21
Income from House
Property (Computed) 80,000
3. Interest on Gover
ernment Securities 10,000
Long
Incometerm fromCapital Gains u/s 112
Business 50,000
10,55,000
Agricultural
6A
mount
Income 1,00,0000
urchasedwithdraw1
from Public Provident Fund 50,000
N.S.C. VIII Issue 30,000
Deposited in PPF 60,000
Subscription to eligible issue of capital 35,000
490 INCOME TAX

lustration 3
The taxable income of an individual is 7 9,70,000 from Business and 7 60,000 from Housa
Property for the previous year 31st March, 2020. His wife is also employed andis getting a salarv
of 16,500 per month. Prepare his assessment for the relevant assessment year.
Solution Computation of Total Income and Tax Liability
for the Assessment Year 2020-21)

1. Income from House Property 60,000

2. Income from Business
Total Income
9,70,000
10,30,000
Income tax on first 7 5,00,000 (F 2,50,000 exempt and on
7 2,50,000@5%) ,000 12,500
Income tax on 7 5,00,000@ 20% 1,00,000
Income tax on balance of7 30,000 @ 30% 9,000
1,21,500
Add Surcharge Nil
1,21,500
Add Health & Education Cess @4% 4,860
Tax Liability 1,26,360
lustration 4
The particulars of income of Smt. Rani (age 62 years) for the previous year ended 31st
March, 2020 are as under
(1) Taxable income from the house property 27,000
(2) Profits and gains of business 9,80,000
Capital gains respe
(3) Capital gains in
in respect of Short-term Capital Assets
n.term Capital
5,000
4) Capital loss in respect of Long-term Capital Assets being
being Buildings
Buildings 20,000
Find out the tax liability for the Assessment Year 2020-21.
Solution
Computation of Total Income and Tax Liability
for the Assessment Year 2020-21)
1. Income from House Property 27,000
2. Profits and Gains of Business 9,80,000
3. Capital gains in respect of Short-term Capital Assets 5,000
4. Long-term Capital Loss C/fd - 20,000

Total Income 10,12,000

Income tax on 10,12,000
N
on 7 3,00,000
on 7 2,00,000 @ 5% 10,000

on 7 5,00,000 @ 20% 1,00,000

3,600
on 7 12,000 30%
1,13,600

Nil
Add Surcharge
1,13,600

Add Health & Education Cess@4%

4544

1,18,144
Tax Liability
Rounded offt 1,18,140.
Note: L.TC.L. can be set-off only against L.TC.G.
 COMPUTATION OF TAX LIABILITY OF 491
INDIVIDUALS
Illustration15

The income of a disabled individual for the Assessment Year 2020-21 consists of the following
from business 5,47,000
(1) Income 50,000
(2) One-third share from an A.0.P.
3) One-fourth share in the profit from a firm 42,000
4) Income from House Property (computed) 50,000
(5) Bank Interest on time deposit 20,000
Income 7,09,000
Find out his tax liability for the Assessment Year 2020-21 if his wife has also a taxable
income ofT 3,75,000.
Solution Computation of Total Income and Tax Liability
for the Assessment Year 2020-21)
Income from House Property 50,000
Income from Business 5,47,0000
1/3rd Share from an A.O.P. Exempt
1/4th Share in Profit of a firm Exempt
Income from Other Source : Bank Interest on Time Deposit 20,000
Gross Total Incomne 6,17,000
Less: Deduction for disability ws 80U 75,000
Total Income 5,42,0000
Income tax on 7 5,42,000:
on 2,50,000 Nil
on 7 2,50,000 5% 12,500
on 42,000 @ 20% 8,400 20,900
Add : Surcharge Nil
20,900
Add: Health & Education Cess4 836
Tax Liability 21,736
Rounded off7 21,740.
Notes3*1 It is immaterial whether the income of wife is taxable or not.
h a r e of income in the firm is exempt u/s l0(2A).
. The share in A.o.P. shall not be included in the income of a member because a member is liable to pay tax
on his income and in such case, the A.O.P. will have to pay tax at the maximum marginal rate.
(Sec. 86)
lustration
Mr.
X,an
6
individual, has the following incomes during the Previous Year 2019-20:
rOSs Income from Salaries 1,05,000
ncome from House Property (computed) 37,000
Income from Business 5,20,400
He
eognis a life insurance premium of 7 5,000 on his own life and
6,62,400o
ributed 12% to the
i s Prprovident fund. His employer also contributed a 8imilar amount. Findout the amount
rOss tax liability for the
Assessment Year 2020-21.
Solution Computation of Total Ineome and Gross Tax Liability
Year 2020-21)
for the Assessment
1.
Gross Incomefrom Salaries 1,05,0000
Less Standard Deductionn
50,000 55,000
2 Income from Salaries
ncome 55,000
ncome from
from House Property
Business 37,000
Gross Total Income 5,20,400
Less
ess:Deduction u/s 80C 6,12,400
Total Income 17,600
5,94,8000
 492
INCOME TAX
Amount Qualifying for deduction uls 80C
Employee's Contribution to R.P.F.
Life Insurance Premium 12,600
5,000
Income tax on total income of 17,600
Tax on 2,50,000
7 5,94,800
Tax on 2,50,000@5% Nil
Tax on T 94,800 @ 20% 12,500
18,9
Add Surcharge 31,460
Nil
Add Health & Education Cess @4% 31,460
258
Gross Tax Liability 32,718
Rounded off7 32,720
hustration 7
An individual (aged 82 years) has the following sources of income for the Assessment Year
2020-21
(1) Gross Income from Salaries (pension) 1,30,000
(2) Income from House Property (computed) 34,000
(3) Income from Business 5,14,000
4) Interest on deposit in bank 48,000
He has paid life insurance premium of7 8,000 and donated a sum of7 5,000 to an approved
charitable institution by cheque. Calculate the gross tax liability of the assessee for the
Assessment Year 2020-21.
Solution
Computation of Total Income and Gross Tax Liability
for the Assessment Year 2020-21)

1. Gross Income from Salaries 1,30,0000

Less : Standard Deduction 80,000
50,000
Income from Salaries 80,000
2. Income from House Property 34,000
3. Income from Business 5,14,000
4. Income from Other Sources : Interest 48,000
Gross Total Income 6,76,000
Less : Deductions: i) LIP u/s 80C
8,000
(ii) 60% of donations of 7 5,000 /s 80G 2,500
Interest Ws 80TTB up to 7 50,000 58,500
48,000
Total Income 6,17,500
Amount Qualifying for deduction ws 80C
Life Insurance Premium 8,000
Income tax on Total Income of 7 6,17,500
On 7 5,00,000 Nil
On 7 1,17,500 20% 23,500
23,500
Add Surcharge Nil
23,500
Add Health & Education Cess@4% 940
Gross Tax Liability
2 4 , 4 4 0
 COMPUTATION OF TAX LIABILITY OFINDIVIDUALS 493

lustration 8
m the following information compute
the tax liability of Y for the Assessment Year
Fror

p20-21:
Business Loss -20,000
Short-term capital gains 5,000
2.55
2,55,000
Long-term capital gains
Interest on securities 15,000
fund 5,000
Deposit in public provident
Computation of Total Income and Tax Liability
Sotution for the Assessment Year 2020-21)

- 20,000
Business Loss
Capital Gains: Short-term 5,000
2,55,000 2,60,000
Long-term
Other Sources: Int. securities 15,000
Income from on
Gross Total Income 2,55,000
Less Deduction u/s 80C : PPF 5,000
Total Income 2,50,000
Nil
Taxon 2,50,000
Notes:
1 Business loss has been set-off against LTCG.
2 Where the total income of the resident individual and resident HUF, as reduced by the LTCG is below the maximum
amount which is not chargeable to tax, then such LTCG shall be reduced by the amount by which such total income
exclusive of LTCG) falls short of exemption limit and tax on balance LTCG shall be computed @ 20%.

Inthis Dlustration total income (excluding LTCG) is 7 15,000 (STCG 7 5,000 +Interest 7 15,000 PPF T 5,000).
from LTCG will be 7 2,50,000 15,000 =7 2,35,000.
Sothe exemption available
-

LTCG7 2,55,000 Business loss 20,0007 =7 2,35,000. Hence, tax payable Nil.
lustration 9 Mr. A furnishes the and
h respect of the Assessment Year 2020-21, following particulars
quests you to work out his tax liability:
1. Business Income 6,70,000
2. Capital Gains Long-term 60,000
3.Other Sources: 9,000
a) Interest on Govt. Securities
b) Interest on Debentures (No TDS) 5,000 14,000
Gross Total Income 7,44,000o
Deductions:
1) Contributions towards:
(a) LIC Pension Scheme 15,000
(b) LIC Premium 10,000
Contribution to Public Provident Fund 10,000
nvestment in National Savings Certificates 45,000
iv) ledical Treatmento Disabled Dependent 20,000
Solution Computation of Total
Income
2020-21)
(for the Assessment Yeur
Business Income 6,70,000
Inong-term Capital Gains 60,000
from Other Sources :
interest on Govt. Securities 9,000
interest on Debentures 5,000 14,000
Gross Total Income 7,44,000
Less Deducti (7 65,000+15,000) 80,000
Ws 80C and ws 8OCCC
u/soons
80DD 75,000 1,55,000
Total Income 5,89,000
 494 INCOME TAX

QA. for deduction u/s 80C:

L.I.C. Premium
Public Provident Fund 100
National Savings Certificates 10,0M
45,000
Computation of Tax Liability 65,0
(for the Assessment Year 2020-21)
Income tax on other income of 7 5,29,000:
on 2,50,000 Nil
on F 2,50,000@5% 12,500
on 29,000 @ 20%
Income tax on LTCG of7
5,800 18,300
60,000@200% 12,0
Add: Surcharge 30,30
Add Health &Education Cess4% 30,300
1,212
Tax Liability 31,512
Rounded off7 31,510.
lustration 10
From the following data for the Assessment Year
total income and tax liability on 2020-21, you are
required to find out the
Pension
self-assessment by
Mr. a Bharat, person above 60 years:
Interest on 2,05,000
Company Deposits (No T.D.S.) 75,000
Capital Gains Long-term
83,00
Investment in National Savings Certificates VIII 3,63,00
Series7 10,000.
Solution
Computation of Total Income and Tax Liability
for the Assessment Year 2020-21)
Pension 2,05,00
Less: Standard Deduction
50,00
1,55,000
Long-term Capital Gains 83,000
Interest Income
76,000
, 1 3 , 0 0 0

Less: Deduction /s 80C NSC Gross Total Incomne

10,00

3,03,000
Income tax on 7 3,00,000 Total Income N
Income tax on 3,000 LTCG@20% 600

600

Less Rebate /s 87A up to 12,500

(Total income does not
exceed7 5,00,000) 600
NI
Ilustration 11 Tax Liability
From the following
particulars
liability for the Assessment of an individual calculate his total
Year 2020-21 andnet
income ana
tar

i) Rent from let properties

out 20,000

(ii) Long-term capital gains ,00

(iii) Profit from own business (computed) 6,31,000

(iv) Income from Lottery (Gross) 4,00,000

(v) Net Agricultural Income 10,000
 COMPUTATION OF TAX LIABILITY OF INDIVIDUALS 495

Computation of Total Income

oUoN
for the Assessment Year 2020-21)

House Property
Income from 20,000
Rent (A. V.) 6,000 14,000
L e s s :3 0 % ofA.V.
6,31,000
2 .B u s i n e s s P r o f i t s

3.CapitalGains LTCG
30,000
O t h e r Sources

4, Jncome
from 1,00,000
Lottery Gross Total Income 7,75,000
Nil
Less: Deductions
Total Income 7,75,000
7,85,0000
Income (7 7,75,000 +7 10,000)
Aggregate
Computation of Net Tax Liability
for the Assessment Year 2020-21) 30,000
@ 30%)
Tax Lottery Income (7 1,00,000
on 6,000
20%)
Tax on LTCG (7 30,000 7 6,55,000:
Tax on Other Income Nil
on 2,50,000 12,500
on 2,50,000 @5% 31,000
on 7 1,55,000 20%
43,500
Less Tax on 7 2,50,000+ Agricultural 43,000
500
Income 10,000 2,60,000 =
79,000
Nil
Add Surcharge 79,000
3,160
Add: Health & Education Cess@ 4% Gross Tax Liability 82,160
Less: Tax deducted at source on lottery
income 1,00,000@ 30%
30,000
Net Tax Liability 52,160
Education Cess deductible at source on income-tax on lottery income.
, & are not

llustration 12
From following particulars compute the total income and tax liability of Mr. Raj Kumar,
ho isis 7ne
70
years old and disablec for the Assessment Year 2020-21 70,000
ncome from house property (computea) 10,10,000
acome from business or profession 10,000
Short-term capital gains 15,000
-term capital loss in respect of assets
sank Interest 14,000
olution on
deposits
Computation of Total Income and Tax Liability
for the Assessment Year 2020-21) 70,000
ncome from House Property 10,10,000
uncome from Business
Capital Gains 10,000
Short-term capital gains
comeLong-term capital loss c/f 15,000
from Other
Bank InterestSources 14,000
11,04,000
Gross Tbtal Income
496
INCOME TAX
Less 1) Deduction /s 80TTB: Bank Interest up to 7 50,000
1) Deduction u/s 80U: 14,000
Disabled 75,000 89 0m
Tax on 10,15,000: Total Income 10,15,0
Tax on7 3,00,000
Tax on 2,00,000
5%
Tax on 5,00,000 20% 10 0
Tax on 15,000 @ 30%
1,00,0
4500
Add Surcharge
1,14 500
Add: Health & Education Nil
Cess4% 1,1450
4,580
Note: LTOCL can be
set-off only against LTCG. Tax Liability 1,19.080
llustration 13
The following
particulars are submitted
by Mr. Sahu for the Assessment Year
are required to compute total income, Gross Tax 2020-21. Yon
Income from Medical Profession and Liability Net Tax Liability
Income from House
Agricultural Income
Property (Computed) 5,68,00
38,000
Long-term Capital Gains 15,000
Lottery Winning from Assam State 20,000
Life Insurance Premium Paid (Policy 50,000
Income from Card Game
7 Lakh taken in 2011)
75,000
Solution 19,000
Computation of Total Income
(for the Assessment Year 2020-21)
Income from House Property
Income from Profession 38,00
Capital Gains: Long-term 5,68,000
Income from Other Sources: 20,000
Lottery winning
Card gamne 50,000
19,000 69,000
Less Deduction u/s 80C : LIP Gross Total Income 6,95,000
75,000
Agricultural Income Total Income 6,20,000
15,000
Aggregate Income 6,35,000
Computation of Gross Tax Liability
for the Assessment Year 2020-21)
Tax on LTCG 7 20,000 @ 20%
Tax on lottery and card 4,000
game 7
Tax on other income 7 5,46,000:69,000 30%
@ 20,700

on 2,50,000
on7 2,50,000 5% Nil
on 46,000 @ 20%
12,500
Less: Tax on 9,200
agricultural income T 2,50,000+ 15,000) 21,700 20,950
750
Add : Surcharge 45,660

NI
Add Health & Education 45,650
Cess@ 4% 826
47,476
Gross Tax Liability
 COMPUTATION OF TAX LIABILITY OF INDIVIDUALS 497

deductedat source on lottery income

Tax
and card game F 69,000 @ 30% 20,700
Net Tax Liability 26,776
Rounded off7 26,780
ducation Cess is not deductible at source on income-tax on lottery and card game income.
Health & i
NoteMustration 14
information for
Smt.
Sn Radha, the singer, of the age of 45 years has furnished the following
2020-21:
Year
theAssessment
Gross Total Income 6,30,000
Contribution to RPF 20,000
Contribution to PPF 10,000
own & husband's life) 8,000
Life insurance premium (On 10,000
NSC VIII issue being purchased 5,000
Interest accrued on NSC
Repayment of housing loan. The house was completed in 2014
and is used for self-residence 15,000
Compute total income and tax liability of the assessee.

Computation of Total Income and Tax Liability

Solution
for the Assessment Year 2020-21)
Gross Total Income 6,30,000
Less: Deduction u/s 80C
Qualifying amount ws 80C:
Contribution to RPF 20,000
Contribution to PPF 10,000
Life insurance premium 8,000
NSC VIII Issue 10,000
Interest accrued on NSC 5,000
Repayment of housing loan 15,000 68,000
Total Income 5,62,000
Tax on 7 5,62,000 Nil
on 2,50,000
on 2,50,000 @5% 12,500
on 62,000 @ 20% 12,400
24,900
Add Surcharge Nil
24,900
Add: Health & Education 996
Cess@ 4% Tax Liability 25,896
Rounded off 7 25,900
Mlustration
From
15 income and net tax liability of Mrs. Rani
or
nethe A e tollowing information compute total
1. Assessment Year 2020-21:
Income
2. Interestfrom House Property (Computed)
95,000
75,000
on Governm Securities
1,00,000
.Winning from Lottery
Donation to P.M. National Relief Fund by cheque
5. Sala
50,000
3,00,000
income (Computed)