Introduction and Basic Concepts in Income Tax

Contents
1.1 OBJECTIVES..........................................................................................................................................................2
1.2 INTRODUCTION...................................................................................................................................................2
1.3 REASON FOR THE GOVERNMENT TO LEVY AND COLLECT TAXES.................................................2
1.4 TYPES OF TAXES.................................................................................................................................................3
IN INDIA TAXES CAN BE CLASSIFIED INTO TWO TYPES:...........................................................................3
1.4.1 DIRECT TAXES....................................................................................................................................................3
1.4.2 INDIRECT TAXES.................................................................................................................................................3
1.5 SOURCES TO READ OR STUDY INCOME TAX............................................................................................3
1.6 BASIC DEFINITIONS...........................................................................................................................................3
1.6.1 PERSON: SECTION 2(31)......................................................................................................................................3
1.6.2 ASSESSEE: SECTION 2(7)....................................................................................................................................5
1.6.3 ASSESSMENT: SECTION 2(8)...............................................................................................................................5
1.6.4 ASSESSMENT YEAR: SECTION 2(9)......................................................................................................................5
1.6.5 PREVIOUS YEAR: SECTION 3 READ WITH SECTION 2(34)...................................................................................5
1.6.6 INCOME: SECTION 2(24).....................................................................................................................................6
1.7 NATURE OF RECEIPT: REVENUE OR CAPITAL.........................................................................................8
1.8 CLASSIFICATION OF INCOME........................................................................................................................8
1.9 CHECK YOUR PROGRESS.................................................................................................................................9
1.10 TAX SLABS FOR INDIVIDUALS AND HUF..................................................................................................9
1.11 SURCHARGE ON INCOME TAX...................................................................................................................10
1.12 MARGINAL RELIEF........................................................................................................................................10
1.13 REBATE U/S 87A...............................................................................................................................................10
1.14 HEALTH AND EDUCATION CESS (HEC)...................................................................................................11
1.15 ROUNDING OFF OF TOTAL INCOME – SECTION 288A........................................................................11
1.16 ROUNDING OFF OF AMOUNT PAYABLE & REFUND DUE – SECTION 288B...................................11
1.17 EXAMPLES TO UNDERSTAND COMPUTATION OF TAX IN VARIOUS CASES..............................11
1.18 CHECK YOUR PROGRESS.............................................................................................................................20
1.19 SUMMING UP....................................................................................................................................................20
SUGGESTED READINGS........................................................................................................................................23
ANSWERS TO CHECK YOUR PROGRESS.........................................................................................................23
PRACTICE QUESTIONS..........................................................................................................................................24
REFERENCES............................................................................................................................................................25
1.1 Objectives
On completion of the unit, you should be able to:
 Understand why the Government levies taxes
 Understand how the Government is empowered to levy income tax
 Understand various basic definitions in relation to income tax
 Identify the different types of receipts and be able to classify them as revenue receipt or
capital receipt
 Identify the basic exemption limit (maximum amount not chargeable to tax) and income
tax slabs with rates of tax
 Compute income tax for an individual (whether resident or non-resident) and HUF
 Understand applicability of surcharge & marginal relief
 Identify individuals eligible for relief u/s 87A and compute tax accordingly

1.2 Introduction
Under Entry 82 of the Schedule VII to the Constitution of India, the Central Government is
empowered to levy „Tax on income other than agricultural income in India. Accordingly, the
Parliament has enacted Income Tax Act, 1961 to provide for the scope and machinery for levy
and collection of Income Tax in India, supported by Income Tax Rules, 1962. The Central Board
of Direct Taxes (CBDT) along with the Ministry of Finance, Government of India issue circulars
and notifications from time to time dealing with various aspects of the levy of Income tax.

Section 4, the charging section, states that every person, who is an assessee and whose total
income exceeds the maximum exemption limit, shall be chargeable to the income tax at the rate
or rates prescribed in the Finance Act. Such income tax shall be paid, on the total income earned
during previous year, in the relevant assessment year. Therefore, it can be said that income tax
is a tax on the total income, of a person called the assesse, of the previous year relevant to the
assessment year at the rates prescribed in the relevant Finance Act.
Therefore, Section 4 empowers the Government to levy & collect income tax and leads us to the
understanding of some concepts including but not restricted to the following:
 Concept of gross total income and total income
 Meaning of person and assesse
 Other important definitions such as assesse, assessment, previous year, assessment year,
etc.
 How is tax charged?
 Rates of income tax
In this unit we will deal with the above aspects and learn computation of tax.

1.3 Reason for the government to levy and collect taxes

Government of India provides many types of services to its citizens and residents such as health
care, education, infrastructure facility, security etc. and most importantly a place where people
can earn their livelihood. In providing these facilities the government incurs a huge expenditure
and to meet these expenses the government requires funds. Therefore, we can conclude that tax
is charged by the government in order to provide the services. Taxes may be charged by the
government on a product, income or activity.
1.4 Types of taxes
In India taxes can be classified into two types:

1.4.1 Direct taxes

A direct tax is that tax whose burden is borne by the same person on whom it is levied. The
impact and the incidence are on same person. It is based on the income and property of a person.
Income tax, corporation tax on company‟s profits, property tax, capital gains tax, etc. are
examples of direct taxes.

1.4.2 Indirect taxes

An indirect tax is that tax which is initially paid by one person, but the burden of which is passed
over to some other person who ultimately bears it. The impact and incidence are on different
persons. It is levied on the expenditure of a person. Goods and services tax, Customs duty,
Excise duty etc. are examples of indirect taxes.

1.5 Sources to read or study income tax

Income Tax Act, 1961 Income tax act covers basic provisions of income tax, Assessment
procedures, penalties & prosecutions i.e. computation of income,
computation of tax liability etc
Income Tax Rules, 1962 Rules are made to carry out basic provisions of income tax
effectively and efficiently. However in any case rules cannot override
the basic provisions to income tax i.e. rules are sub-ordinate to the
act.
Annual Finance Act Finance Act, commonly known as budget, provides with information
about the rates of tax in advance i.e. rates of tax for the year in which
assessee would earn the income. e.g. Finance Act 2020 provides the
rates of tax for Assessment Year 2021-22 i.e. for the Previous Year
2020-21
Circulars & Notification Circulars are issued for internal department workings i.e. circulars
cannot bind assesse but the assessing officer is bound by it and
notifications are issued for general public, both the assesse and the
assessing officer are bound by it.
Legal Decision Of High Decisions of High court / Supreme Court can be used as points of
& Supreme Courts reference for the purpose of interpretation of law. They are binding
on all subordinate courts. Supreme Court decisions are final and
cannot be challenged either by the assessee or by the department.

1.6 Basic definitions

General definitions relevant to income tax are given under various clauses under section 2.

1.6.1 Person: Section 2(31)

Person Includes:
i. an Individual,
ii. a Hindu Undivided Family (HUF),
iii. a Company,
 iv. a Firm,
v. an Association of Persons (AOP) or a Body of Individuals (BOI), whether incorporated
or not,
vi. a Local Authority and
vii. every Artificial Juridical Person, not falling within any of the preceding sub-clauses

Analysis of the definition:

Includes Meaning and Examples

i) Individual Natural person i.e. human being, it also includes a minor or a person
of unsound mind.
ii) Hindu Undivided HUF is also a separate entity and is governed by Hindu Succession
Family (HUF) Act. It is applicable only on the persons covered by the Hindu law.
Under income tax HUF has a separate status; it can have separate
income and is assessed separately. HUF has no relation with the
individual income or status of it‟s members.
iii) Firm Under income tax “Firm” means a Partnership firm. In Income Tax
Act, Partnership, Partner and partnership firm have the same meaning
as assigned to them in the Indian Partnership Act. A firm also includes
a limited liability partnership
iv) Company (a) An Indian Company
(b) Any body corporate incorporated by or under the laws of a country
outside India
(c) Any institution or body which is or was assessable or was
assessed as a company under the Income tax Act, 1922 or which is or
was assessable or was assessed under this Act, as a company for any
assessment year commencing on or before the 1 st. Day of April 1970,
or
(d) Any institution or body (Indian or Foreign) which is declared by
the Board to be a company.
“Corporate assesses”.
v) Association Association of persons may include artificial persons like companies
of Persons (AOP) also but in case of Body of individuals, it comprises of only natural
or Body of persons. The tax treatment under the income tax Act, for both
Individuals Association of persons and Body of individuals is the same.
(BOI) , whether Eg: Board of cricket control in India is an AOP whereas legal heirs to
or not receive property of Late Mr. Vicky is a BOI
incorporated
vi) Local Authority Municipality, Municipal Corporation, Panchayat, Cantonment Board,
Krishi Upaj Mandi Samiti, Urban Improvement Trust, etc.
vii) Every other Bar council of India, Chamber of Commerce, University of Mumbai,
Artificial etc.
Juridical Person
Profit Motive Not Association of persons, Body of Individuals, Local authorities,
Mandatory Artificial Judicial person will be treated as persons irrespective of the
fact that they are formed for the purpose of earning profit or not
1.6.2 Assessee: Section 2(7)
Assessee means a person by whom any tax or any other sum (penalty/interest) is payable under
the Act and it includes:
i. every person in respect of whom any proceeding has been initiated under the Act for the
assessment of his income, loss or refund or the income, loss or refund of any other person
in respect of which he is assessable, or
ii. a person who is deemed to be an assesse under any provision of the Act, or
iii. a person who is deemed to be assessee in default under any provision of the Act.

Analysis of the definition:

The term „Assessee‟ is very important since it is the assesse who contributes money to the
government exchequer in the form of tax. A person can be termed as an assessee in default if the
person has defaulted in deducting tax while making payment (TDS) to other person even though
the said first person was not liable to pay any tax to the government.

1.6.3 Assessment: Section 2(8)

Assessment includes reassessment.
This is the procedure by which the income of an assessee is determined by the Assessing Officer.
It may be by way of a normal assessment or by way of reassessment of an income previously
assessed.

1.6.4 Assessment year: Section 2(9)

It means the period of 12 months commencing on the first day of April every year.
The year in which tax is paid is called the assessment year. Assessment year is a financial year
which immediately succeeds the relevant previous year. Income of previous year of an assessee
is taxed during the following assessment year at the rates prescribed by the relevant Finance Act.
eg: for the previous year 2015-16, the relevant assessment year is 2016-17, for assessment year
2018-19, the relevant previous year is 2017-18.

1.6.5 Previous year: Section 3 read with Section 2(34)

It means the previous year as defined under section 3.
According to section 3, previous year means the financial year immediately preceding the
assessment year. The financial year during which the income is earned is known as the previous
year. eg: for the previous year 2012-13, the relevant assessment year is 2013-14 i.e. income will
be earned during 2012-13 and tax on such income will be paid during 2013-14.

Points to Ponder
 In case of a newly setup business or profession or a new source of income, the previous
year shall be the period beginning with the date of setting up of the business or
profession or the date on which the new source of income comes into existence and
ending with 31st March of the said financial year. Thus, the first previous year of a new
business or profession or new source of income shall always be either less than 12
months or 12 months. eg: a person starts a retail business on 15/10/2017, the first
previous year will be from 15/10/2017 to 31/03/2018.
 A financial year plays a dual role: It is a previous year as well as an assessment year. eg:
financial year 2014-15 is previous year for the income received or accrued during 1st
 April, 2014 to 31st March, 2015 at the same time financial year 2014-15 is the
assessment year for the income received or accrued in the immediately preceding
previous year i.e. 1st April, 2013 to 31st March, 2014.
 The pair of previous year and corresponding assessment year is always unique, i.e. if
2012-13 is the previous year than the corresponding assessment year will be 2013-14 and
vice versa. Previous 2012-13 will not have any year other than 2013-14 as an assessment
year.

1.6.6 Income: Section 2(24)

Income includes:
(i) profits and gains
(ii) dividend
(iia) voluntary contributions received by a trust created wholly or partly for charitable or
religious purposes or by an institution established wholly or partly for such purposes or by an
association or institution referred to in clause (21) or clause (23), or by a fund or trust or
institution referred to in sub-clause (iv) or sub-clause (v) or by any university or other
educational institution referred to in sub-clause (iiiad) or sub-clause (vi) or by any hospital or
other institution referred to in sub-clause (iiiae) or sub-clause (via) of clause (23C) of section 10
or by an electoral trust.
(iii) the value of any perquisite or profit in lieu of salary taxable under clauses (2) and (3) of
section 17
(iiia) any special allowance or benefit, other than perquisite included under sub-clause (iii),
specifically granted to the assessee to meet expenses wholly, necessarily and exclusively for the
performance of the duties of an office or employment of profit
(iiib) any allowance granted to the assessee either to meet his personal expenses at the place
where the duties of his office or employment of profit are ordinarily performed by him or at a
place where he ordinarily resides or to compensate him for the increased cost of living
(iv) the value of any benefit or perquisite, whether convertible into money or not, obtained from
a company either by a director or by a person who has a substantial interest in the company, or
by a relative of the director or such person, and any sum paid by any such company in respect of
any obligation which, but for such payment, would have been payable by the director or other
person aforesaid
(iva) the value of any benefit or perquisite, whether convertible into money or not, obtained by
any representative assessee mentioned in clause (iii) or clause (iv) of sub-section (1) of section
160 or by any person on whose behalf or for whose benefit any income is receivable by the
representative assessee (such person being hereafter in this sub-clause referred to as the
"beneficiary") and any sum paid by the representative assessee in respect of any obligation
which, but for such payment, would have been payable by the beneficiary
(v) any sum chargeable to income-tax under clauses (ii) and (iii) of section 28 or section 41 or
section 59
(va) any sum chargeable to income-tax under clause (iiia) of section 28
(vb) any sum chargeable to income-tax under clause (iiib) of section
28 (vc) any sum chargeable to income-tax under clause (iiic) of section
28
(vd) the value of any benefit or perquisite taxable under clause (iv) of section 28
(ve) any sum chargeable to income-tax under clause (v) of section 28
(vi) any capital gains chargeable under section 45
(vii) the profits and gains of any business of insurance carried on by a mutual insurance company
or by a co-operative society, computed in accordance with section 44 or any surplus taken to be
such profits and gains by virtue of provisions contained in the First Schedule
(viia) the profits and gains of any business of banking (including providing credit facilities)
carried on by a co-operative society with its members
(viii) [Omitted by the Finance Act, 1988, w.e.f. 1-4-1988. Original sub-clause (viii) was inserted
by the Finance Act, 1964, w.e.f. 1-4-1964;]
(ix) any winnings from lotteries, crossword puzzles, races including horse races, card games and
other games of any sort or from gambling or betting of any form or nature whatsoever.
(x) any sum received by the assessee from his employees as contributions to any provident fund
or superannuation fund or any fund set up under the provisions of the Employees' State Insurance
Act, 1948 (34 of 1948), or any other fund for the welfare of such employees
(xi) any sum received under a Keyman insurance policy including the sum allocated by way of
bonus on such policy.
Explanation: For the purposes of this sub-clause, the expression "Keyman insurance policy" shall
have the meaning assigned to it in the Explanation to clause (10D) of section 10;
(xii) any sum referred to in clause (va) of section 28
(xiia) the fair market value of inventory referred to in clause (via) of section 28
(xiii) any sum referred to in clause (v) of sub-section (2) of section 56
(xiv) any sum referred to in clause (vi) of sub-section (2) of section 56
(xv) any sum of money or value of property referred to in clause (vii) or clause (viia) of sub-
section (2) of section 56
(xvi) any consideration received for issue of shares as exceeds the fair market value of the shares
referred to in clause (viib) of sub-section (2) of section 56
(xvii) any sum of money referred to in clause (ix) of sub-section (2) of section 56
(xviia) any sum of money or value of property referred to in clause (x) of sub-section (2) of
section 56
(xviib) any compensation/other payment referred to in clause (xi) of sub-section (2) of section 56
(xviii) assistance in the form of a subsidy or grant or cash incentive or duty drawback or waiver
or concession or reimbursement (by whatever name called) by the Central Government or a State
Government or any authority or body or agency in cash or kind to the assessee other than,
(a) the subsidy or grant or reimbursement which is taken into account for determination
of the actual cost of the asset in accordance with the provisions of Explanation 10 to clause (1) of
section 43; or
(b) the subsidy or grant by the Central Government for the purpose of the corpus of a
trust or institution established by the Central Government or a State Government, as the case
may be;

Analysis of the definition:

Income tax is payable on income earned during the previous year. We can broadly sum up the
term „income‟ by saying that it is the true increase in the amount of wealth derived by a person
during a fixed period of time. In general, income may also be termed as a periodic monetary
return which accrues or is expected to accrue regularly from definite source. Income may be
received in cash or in kind. The income-tax law does not make any distinction between income
accrued or arisen from a legal source and income tainted with illegality i.e. even illegal income is
taxable. eg: income arising from smuggling operations is also subject to tax under income tax
provisions. It is not necessary that a source of income should exist in the assessment year. If
there is an income during the previous year, it is chargeable to tax for the following assessment
year even if the source of income does not exist during the assessment year. Income includes
loss. If a person receives income on which tax is deducted by the person making payment on
behalf of the recipient, it has to be grossed up for inclusion in his total income. eg: TCS Ltd. pays
Rs.9,00,000 p.a. as salary to Mr. Programmer after deducting tax of Rs. 1,00,000 for the year
than the amount of income taxable in the hands of Mr. Programmer will be Rs.10,00,000 p.a.

Points to Ponder
 Unless specified otherwise, taxability of income depends on the method of accounting
i.e. cash method of accounting or mercantile method of accounting. Therefore, income
may accrue to an assessee without actual receipt of the income.
 Same income cannot be taxed twice i.e. if an income was taxed in earlier years on
accrual basis, it cannot be taxed again at the time of receipt.
 Pin money: Pin money received by wife for her clothing or personal expenses and small
savings made by a woman out of money received from her husband for meeting
household expenses is not treated as income. But if the savings are invested than the
income on such investments will be treated as income.

1.7 Nature of receipt: Revenue or Capital

Any receipt of money can either be categorized as revenue receipt or capital receipt.
Revenue receipts are receipts that are generated from routine operations and are always fully
taxable unless specifically exempted.
Capital receipts are amounts of money received from transfer of a revenue generating asset and
are never taxable. eg: loan taken from a bank is not taxed. However, some of the capital receipts
are taxable since they have been specifically provided in the definition of income such as tax on
capital gains on sale of any capital asset.

Examples:
1. Income from sale of shares will be capital receipt and dividend income arises out of it will be
revenue receipt.
2. Income from transfer of house property will be capital receipt and rental income arising from
it will be revenue receipt.
3. Income from transfer of machine will be capital receipt and sale of product made using the
machine will be revenue receipt.

Points to Ponder
 Income of the 'previous year' is taxed in the 'assessment year' at the rates applicable for
that assessment year
 Rate of Tax for an assessment year is fixed by the Finance Act every year and not by the
Income Tax Act

1.8 Classification of income

According to the provisions of income tax, income is classified and computed under five
categories called „heads of income‟. The income chargeable under a particular head cannot be
charged under any other head. Classification of income under a particular head depends upon
the type of activity and the intention of the assesse. The Act has specific provisions in respect
of each head of income. Below are the five heads of income in their respective order:
1. Income from Salary
2. Income from House Property
3. Profits and Gains of Business or Profession
4. Capital Gains
5. Income from other Sources

1.9 Check your progress

1. Why does the government levy and collect tax?
2. Name the types of taxes and give examples.
3. Distinguish between direct and indirect tax
4. What are the sources to study income tax?
5. Explain the following terms:
a) Person
b) Assessee
c) Assessment
d) Previous year
e) Assessment year
f) Income
6. Distinguish between revenue receipts and capital receipts
7. According to income tax, income can be classified into how many heads? Name them.

1.10 Tax slabs for individuals and HUF

Income-tax is to be charged at the rates fixed for the year by the annual Finance Act (Budget).

The following tax slab is applicable to a resident individual aged less than sixty years, a non-
resident individual (irrespective of the age) and an HUF (Table A)

Total income falling within the slab Rate of tax

Upto Rs. 2,50,000 0%
Rs. 2,50,000 to Rs. 5,00,000 5%
Rs. 5,00,000 to Rs. 10,00,000 20%
Above Rs. 10,00,000 30%

The following tax slab is applicable to a resident individual aged sixty years or above, any time
during the previous year, up to seventy nine years (resident senior citizen) (Table B)

Total income falling within the slab Rate of tax

Upto Rs. 3,00,000 0%
Rs. 3,00,000 to Rs. 5,00,000 5%
Rs. 5,00,000 to Rs. 10,00,000 20%
Above Rs. 10,00,000 30%
The following tax slab is applicable to a resident individual aged eighty years or above, any time
during the previous year (resident very senior citizen) (Table C)

Total income falling within the slab Rate of tax

Upto Rs. 5,00,000 0%
Rs. 5,00,000 to Rs. 10,00,000 20%
Above Rs. 10,00,000 30%

New optional tax regime u/s 115BAC

Total income falling within the slab Rate of tax

Upto Rs. 300,000 0%
Rs. 3,00,000 to Rs. 6,00,000 5%
Rs. 6,00,000 to Rs. 9,00,000 10%
Rs. 9,00,000 to Rs. 12,00,000 15%
Rs. 12,00,000 to Rs. 15,00,000 20%
Above Rs. 15,00,000 30%

An individual or HUF can opt for the above optional tax regime if the conditions contained in
section 115BAC(2) are satisfied. These conditions shall be discussed along with the respective
topics.

1.11 Surcharge on income tax

Range of total income Rate of surcharge on tax

Upto Rs. 50,00,000 0%
Exceeding Rs. 50,00,000 up to Rs. 1,00,00,000 10% of tax
Exceeding Rs. 1,00,00,000 15% of tax

1.12 Marginal relief

In the case of persons having total income exceeding rupees fifty lakh or rupees one crore, the
total amount payable as income-tax and surcharge on such income shall not exceed the total
amount payable as income-tax on a total income of rupees fifty lakh or rupees one crore by more
than the amount of income that exceeds rupees fifty lakh or rupees one crore. i.e. when
incremental tax is greater than incremental income the person is eligible for marginal relief. The
amount of marginal relief shall be equal to the difference between incremental tax and
incremental income.
 1.13 Rebate u/s 87A
An assessee, being an individual resident in India, whose total income does not exceed Rupees
Five lakhs (5,00,000) in the Old Tax regime and Seven Lakh(700000) in New tax regime, shall
be entitled to a deduction, from the amount of income-tax, on his total income with which he is
chargeable for any assessment year, of an amount equal to hundred per cent (100%) of such
income-tax or an amount of Rupees Twelve thousand five hundred (12,500), whichever is less.
In Default tax regime U/S 115BAC rebate amount is Rs 25000.
Therefore, the rebate shall be available if an individual satisfies both the following conditions:
 He / she is a resident individual and
 His / her Total Income is equal to or less than Rs. 5,00,000 under old tax regime or Rs 700000
Under new tax regime(115BAC)

In order to provide tax relief to the individual tax payers, section 87A provides a rebate from the tax
payable by an assessee, being an individual resident in India

Case 1: Rebate to resident individual paying tax under default tax regime u/s 115BAC If total income of
such individual does not exceed Rs 7,00,000, the rebate shall be equal to the amount of income-tax
payable on his total income for any assessment year or an amount of 25,000, whichever is less.

The amount of rebate under section 87A shall not exceed the amount of Income Tax (as computed before
rebate on total Income.
Example:
Mr. Raghav Age 26 years and resident in India have Total Income 650000 Rs. Compute tax Liability
under default Tax regime U/S 115BAC.
Case 2
If total income of such individual exceeds 7,00,000 and income-tax payable on such total income
exceeds the amount by which the total income is in excess of 7,00,000, the rebate would be as follows.
Step 1- Total income (-) 7 lakhs (A)
Step 2- Compute income-tax liability on total income (B)
Step 3 - If B>A, rebate under section 87A would be a B-A.

The amount of rebate under section 87A shall not exceed the amount of income-tax (as computed
before allowing such rebate) on the total income of the assessee.

Example:
Mr. Pawan aged 35 years and a resident in India, has a total income of 715,000, comprising his salary
income and interest on bank fixed deposit. Compute his tax liability for A.Y,2024-25 under default tax
regime under section 115BAC.

Solution:

1.14 Health and education cess (HEC)

Health and Education Cess shall be levied at the rate of 4% of the Income tax.
This levy of 4% HEC shall be calculated & levied on the amount of Income tax even if no
surcharge is applicable. In case surcharge is applicable, HEC shall be levied on the aggregate
amount of Income tax and surcharge thereon (after allowing marginal relief, wherever
applicable). HEC shall be computed after allowing rebate u/s 87A, wherever applicable.
1.15 Rounding off of total income – Section 288A
The amount of total income computed in accordance with the provisions of the Act shall be
rounded off to the nearest multiple of ten rupees. For this purpose, paise shall be ignored and five
rupees and above shall be rounded off to the next multiple of ten rupees and less than five rupees
shall be rounded off to earlier multiple of ten rupees.
eg: if the amount of total income is Rs. 99,994.59 the same shall be rounded off to Rs. 99,990
and if the amount of total income is Rs. 99,995.95 the same shall be rounded off to Rs. 1,00,000

1.16 Rounding off of amount payable & refund due – Section 288B
Any amount of tax payable or refund due under the provisions of the Act shall be rounded off to
the nearest multiple of ten rupees. For this purpose, paise shall be ignored and five rupees and
above shall be rounded off to the next multiple of ten rupees and less than five rupees shall be
rounded off to earlier multiple of ten rupees.
eg: if the amount of tax payable is Rs. 29,994.90 the same shall be rounded off to Rs. 29,990 and
if the amount of tax payable is Rs. 29,995.01 the same shall be rounded off to Rs. 30,000

1.17 Examples to understand computation of tax in various cases

Case 1: Resident individual aged less than sixty years, having total income of Rs. 4,80,000 (not
opted for payment of tax u/s 115BAC)

Tax slab Rate of tax (%) Income falling Amount of tax

(A) (B) within the slab (Rs.) [(D) = C x B]
(C)
Upto Rs. 2,50,000 0 2,50,000 0
Rs. 2,50,000 to 4,80,000 5 2,30,000 11,500
Total tax 11,500
(-) Rebate u/s 87A 11,500
Tax payable 0
Case 2: Non-Resident individual aged less than sixty years, having total income of Rs. 4,80,000
(not opted for payment of tax u/s 115BAC)

Tax slab Rate of tax (%) Income falling Amount of tax

(A) (B) within the slab (Rs.) [(D) = C x B]
(C)
Upto Rs. 2,50,000 0 2,50,000 0
Rs. 2,50,000 to 4,80,000 5 2,30,000 11,500
Total tax 11,500
(+) 4% Health & Education cess 460
Total tax payable 11,960

Note: A non-resident individual is not eligible for Rebate u/s87A

Case 3: Resident individual aged sixty years (resident senior citizen), having total income of Rs.
4,80,000 (not opted for payment of tax u/s 115BAC)

Tax slab Rate of tax (%) Income falling Amount of tax

(A) (B) within the slab (Rs.) [(D) = C x B]
(C)
Upto Rs. 3,00,000 0 3,00,000 0
Rs. 3,00,000 to 4,80,000 5 1,80,000 9,000
Total tax 9,000
(-) Rebate u/s 87A 9,000
Tax payable 0

Case 4: Non-Resident individual aged sixty years, having total income of Rs. 4,80,000 (not
opted for payment of tax u/s 115BAC)

Tax slab Rate of tax (%) Income falling Amount of tax

(A) (B) within the slab (Rs.) [(D) = C x B]
(C)
Upto Rs. 2,50,000 0 2,50,000 0
Rs. 2,50,000 to 4,80,000 5 2,30,000 11,500
Total tax 11,500
(+) 4% Health & Education cess 460
Total tax payable 11,960

Note: A non-resident individual is not eligible for Rebate u/s87A and is also not eligible for
higher basic exemption limit.
Case 5: Resident individual aged eighty years (resident very senior citizen), having total income
of Rs. 4,80,000 (not opted for payment of tax u/s 115BAC)

Tax slab Rate of tax (%) Income falling Amount of tax

(A) (B) within the slab (Rs.) [(D) = C x B]
(C)
Upto Rs. 5,00,000 0 4,80,000 0
Total tax 0

Case 6: Non-Resident individual aged eighty years, having total income of Rs. 4,80,000 (not
opted for payment of tax u/s 115BAC)

Tax slab Rate of tax (%) Income falling Amount of tax

(A) (B) within the slab (Rs.) [(D) = C x B]
(C)
Upto Rs. 2,50,000 0 2,50,000 0
Rs. 2,50,000 to 4,80,000 5 2,30,000 11,500
Total tax 11,500
(+) 4% Health & Education cess 460
Total tax payable 11,960

Note: A non-resident individual is not eligible for Rebate u/s87A and is also not eligible for
higher basic exemption limit.

Case 7: Resident individual aged less than sixty years, having total income of Rs. 7,80,000 (not
opted for payment of tax u/s 115BAC)

Tax slab Rate of tax (%) Income falling Amount of tax

(A) (B) within the slab (Rs.) [(D) = C x B]
(C)
Upto Rs. 2,50,000 0 2,50,000 0
Rs. 2,50,000 to 5,00,000 5 2,50,000 12,500
Rs. 5,00,000 to 7,80,000 20 2,80,000 56,000
Total tax 68,500
(+) 4% Health & Education cess 2,740
Tax payable 71,240
Case 8: Non-Resident individual aged less than sixty years, having total income of Rs. 7,80,000
(not opted for payment of tax u/s 115BAC)

Tax slab Rate of tax (%) Income falling Amount of tax

(A) (B) within the slab (Rs.) [(D) = C x B]
(C)
Upto Rs. 2,50,000 0 2,50,000 0
Rs. 2,50,000 to 5,00,000 5 2,50,000 12,500
Rs. 5,00,000 to 7,80,000 20 2,80,000 56,000
Total tax 68,500
(+) 4% Health & Education cess 2,740
Total tax payable 71,240

Case 9: Resident individual aged sixty years (resident senior citizen), having total income of Rs.
7,80,000 (not opted for payment of tax u/s 115BAC)

Tax slab Rate of tax (%) Income falling Amount of tax

(A) (B) within the slab (Rs.) [(D) = C x B]
(C)
Upto Rs. 3,00,000 0 3,00,000 0
Rs. 3,00,000 to 5,00,000 5 2,00,000 10,000
Rs. 5,00,000 to 7,80,000 20 2,80,000 56,000
Total tax 66,000
(+) 4% Health & Education cess 2,640
Total tax payable 68,640

Case 10: Non-Resident individual aged sixty years, having total income of Rs. 7,80,000 (not
opted for payment of tax u/s 115BAC)

Tax slab Rate of tax (%) Income falling Amount of tax

(A) (B) within the slab (Rs.) [(D) = C x B]
(C)
Upto Rs. 2,50,000 0 2,50,000 0
Rs. 2,50,000 to 5,00,000 5 2,50,000 12,500
Rs. 5,00,000 to 7,80,000 20 2,80,000 56,000
Total tax 68,500
(+) 4% Health & Education cess 2,740
Total tax payable 71,240
Case 11: Resident individual aged eighty years (resident very senior citizen), having total
income of Rs. 7,80,000 (not opted for payment of tax u/s 115BAC)

Tax slab Rate of tax (%) Income falling Amount of tax

(A) (B) within the slab (Rs.) [(D) = C x B]
(C)
Upto Rs. 5,00,000 0 5,00,000 0
Rs. 5,00,000 to 7,80,000 20 2,80,000 56,000
Total tax 56,000
(+) 4% Health & Education cess 2,240
Total tax payable 58,240

Case 12: Non-Resident individual aged eighty years, having total income of Rs. 7,80,000 (not
opted for payment of tax u/s 115BAC)

Tax slab Rate of tax (%) Income falling Amount of tax

(A) (B) within the slab (Rs.) [(D) = C x B]
(C)
Upto Rs. 2,50,000 0 2,50,000 0
Rs. 2,50,000 to 5,00,000 5 2,50,000 12,500
Rs. 5,00,000 to 7,80,000 20 2,80,000 56,000
Total tax 68,500
(+) 4% Health & Education cess 2,740
Total tax payable 71,240

Case 13: Resident individual aged less than sixty years, having total income of Rs. 13,00,000
(not opted for payment of tax u/s 115BAC)

Tax slab Rate of tax (%) Income falling Amount of tax

(A) (B) within the slab (Rs.) [(D) = C x B]
(C)
Upto Rs. 2,50,000 0 2,50,000 0
Rs. 2,50,000 to 5,00,000 5 2,50,000 12,500
Rs. 5,00,000 to 10,00,000 20 5,00,000 1,00,000
Exceeding Rs. 10,00,000 30 3,00,000 90,000
Total tax 2,02,500
(+) 4% Health & Education cess 8,100
Tax payable 2,10,600
Case 14: Non-Resident individual aged less than sixty years, having total income of Rs.
13,00,000 (not opted for payment of tax u/s 115BAC)

Tax slab Rate of tax (%) Income falling Amount of tax

(A) (B) within the slab (Rs.) [(D) = C x B]
(C)
Upto Rs. 2,50,000 0 2,50,000 0
Rs. 2,50,000 to 5,00,000 5 2,50,000 12,500
Rs. 5,00,000 to 10,00,000 20 5,00,000 1,00,000
Exceeding Rs. 10,00,000 30 3,00,000 90,000
Total tax 2,02,500
(+) 4% Health & Education cess 8,100
Tax payable 2,10,600

Case 15: Resident individual aged sixty years (resident senior citizen), having total income of
Rs. 13,00,000 (not opted for payment of tax u/s 115BAC)

Tax slab Rate of tax (%) Income falling Amount of tax

(A) (B) within the slab (Rs.) [(D) = C x B]
(C)
Upto Rs. 3,00,000 0 3,00,000 0
Rs. 3,00,000 to 5,00,000 5 2,00,000 10,000
Rs. 5,00,000 to 10,00,000 20 5,00,000 1,00,000
Exceeding Rs. 10,00,000 30 3,00,000 90,000
Total tax 2,00,000
(+) 4% Health & Education cess 8,000
Total tax payable 2,08,000

Case 16: Non-Resident individual aged sixty years, having total income of Rs. 13,00,000 (not
opted for payment of tax u/s 115BAC)

Tax slab Rate of tax (%) Income falling Amount of tax

(A) (B) within the slab (Rs.) [(D) = C x B]
(C)
Upto Rs. 2,50,000 0 2,50,000 0
Rs. 2,50,000 to 5,00,000 5 2,50,000 12,500
Rs. 5,00,000 to 10,00,000 20 5,00,000 1,00,000
Exceeding Rs. 10,00,000 30 3,00,000 90,000
Total tax 2,02,500
(+) 4% Health & Education cess 8,100
Tax payable 2,10,600
Case 17: Resident individual aged eighty years (resident very senior citizen), having total
income of Rs. 13,00,000 (not opted for payment of tax u/s 115BAC)

Tax slab Rate of tax (%) Income falling Amount of tax

(A) (B) within the slab (Rs.) [(D) = C x B]
(C)
Upto Rs. 5,00,000 0 5,00,000 0
Rs. 5,00,000 to 10,00,000 20 5,00,000 1,00,000
Exceeding Rs. 10,00,000 30 3,00,000 90,000
Total tax 1,90,000
(+) 4% Health & Education cess 7,600
Total tax payable 1,97,600

Case 18: Non-Resident individual aged eighty years, having total income of Rs. 13,00,000 (not
opted for payment of tax u/s 115BAC)

Tax slab Rate of tax (%) Income falling Amount of tax

(A) (B) within the slab (Rs.) [(D) = C x B]
(C)
Upto Rs. 2,50,000 0 2,50,000 0
Rs. 2,50,000 to 5,00,000 5 2,50,000 12,500
Rs. 5,00,000 to 10,00,000 20 5,00,000 1,00,000
Exceeding Rs. 10,00,000 30 3,00,000 90,000
Total tax 2,02,500
(+) 4% Health & Education cess 8,100
Tax payable 2,10,600

Case 19: An individual aged less than sixty years, having total income of Rs. 60,00,000 (not
opted for payment of tax u/s 115BAC)

Tax slab Rate of tax (%) Income falling Amount of tax

(A) (B) within the slab (Rs.) [(D) = C x B]
(C)
Upto Rs. 2,50,000 0 2,50,000 0
Rs. 2,50,000 to 5,00,000 5 2,50,000 12,500
Rs. 5,00,000 to 10,00,000 20 5,00,000 1,00,000
Exceeding Rs. 10,00,000 30 50,00,000 15,00,000
Tax 16,12,500
(+) 10% Surcharge 1,61,250
Tax payable 17,73,750
(+) 4% Health & Education cess 70,950
Total tax payable 18,44,700
Case 20: An individual aged less than sixty years, having total income of Rs. 1,20,00,000 (not
opted for payment of tax u/s 115BAC)

Tax slab Rate of tax (%) Income falling Amount of tax

(A) (B) within the slab (Rs.) [(D) = C x B]
(C)
Upto Rs. 2,50,000 0 2,50,000 0
Rs. 2,50,000 to 5,00,000 5 2,50,000 12,500
Rs. 5,00,000 to 10,00,000 20 5,00,000 1,00,000
Exceeding Rs. 10,00,000 30 1,10,00,000 33,00,000
Tax 34,12,500
(+) 15% Surcharge 5,11,875
Tax payable 39,24,375
(+) 4% Health & Education cess 1,56,975
Total tax payable 40,81,350

Case 21: An individual aged less than sixty years, having total income of Rs. 50,50,000 (not
opted for payment of tax u/s 115BAC)

Tax slab Rate of tax (%) Income falling Amount of tax

(A) (B) within the slab (Rs.) [(D) = C x B]
(C)
Upto Rs. 2,50,000 0 2,50,000 0
Rs. 2,50,000 to 5,00,000 5 2,50,000 12,500
Rs. 5,00,000 to 10,00,000 20 5,00,000 1,00,000
Exceeding Rs. 10,00,000 30 40,50,000 12,15,000
Tax 13,27,500
(+) 10% Surcharge 1,32,750
Tax payable (a) 14,60,250
(-) Marginal relief 97,750
Tax payable 13,62,500
(+) 4% Health & Education cess 54,500
Total tax payable 14,17,000

Tax on income of Rs. 50,50,000, after adding surcharge is Rs. 14,60,250 (point a).
Tax on income if it was exactly Rs. 50,00,000 would be Rs. 13,12,500.
Therefore, the incremental tax is Rs. 1,47,750 (14,60,250 – 13,12,500) whereas incremental
income is Rs. 50,000 (50,50,000 – 50,00,000), but increase in tax cannot be greater than increase
in income therefore marginal relief shall be provided for Rs. 97,750 (1,47,750 – 50,000)
Case 22: An individual aged less than sixty years, having total income of Rs. 1,01,00,000 (not
opted for payment of tax u/s 115BAC)

Tax slab Rate of tax (%) Income falling Amount of tax

(A) (B) within the slab (Rs.) [(D) = C x B]
(C)
Upto Rs. 2,50,000 0 2,50,000 0
Rs. 2,50,000 to 5,00,000 5 2,50,000 12,500
Rs. 5,00,000 to 10,00,000 20 5,00,000 1,00,000
Exceeding Rs. 10,00,000 30 91,00,000 27,30,000
Tax 28,42,500
(+) 15% Surcharge 4,26,375
Tax payable (a) 32,68,875
(-) Marginal relief 75,125
Tax payable 31,93,750
(+) 4% Health & Education cess 1,27,750
Total tax payable 33,21,500

Tax on income of Rs. 1,01,00,000, after adding surcharge is Rs. 32,68,875 (point a).
Tax on income if it was exactly Rs. 1,00,00,000 would be Rs. 30,93,750. (since Rs. 1,00,00,000
is greater than Rs. 50,00,000, 10% surcharge will be applicable while calculating the amount of
tax on income of exactly Rs. 1,00,00,000)
Therefore, the incremental tax is Rs. 1,75,125 (32,68,875 – 30,93,750) whereas incremental
income is Rs. 1,00,000 (1,01,00,000 – 1,00,00,000), but increase in tax cannot be greater than
increase in income therefore marginal relief shall be provided for Rs. 75,125 (1,75,125 –
1,00,000)

Case 23: An individual or HUF, having total income of Rs. 20,00,000 and has opted for payment
of tax u/s 115BAC

Tax slab Rate of tax (%) Amount of tax

(A) (B) [(D) = C x B]

Upto Rs. 300,000 0 0

Rs. 300,000 to 6,00,000 5 15000
Rs. 6,00,000 to 900,000 10 30,000
Rs. 900,000 to 12,00,000 15 45,000
Rs. 12,00,000 to Rs. 1500,000 20 60,000
Exceeding Rs. 15,00,000 30 1,50,000
Total Tax 300000
(+) 4% Health & Education cess 12000
Total tax payable 3,12,000

Note: The tax computation shall be same for HUF and an individual irrespective of the
residential status and age of the individual.
Case 24: XYZ HUF, having total income of Rs. 4,80,000 (not opted for payment of tax u/s
115BAC)

Tax slab Rate of tax (%) Income falling Amount of tax

(A) (B) within the slab (Rs.) [(D) = C x B]
(C)
Upto Rs. 2,50,000 0 2,50,000 0
Rs. 2,50,000 to 4,80,000 5 2,30,000 11,500
Total tax 11,500
(+) 4% Health and education cess 460
Tax payable 11,960

Note: An HUF is not eligible for Rebate u/s87A but can claim marginal relief if total income
exceeds Rs. 50,00,000 or Rs. 1,00,00,000 as the case may be.

1.18 Check your progress:

1. Specify the slab rates applicable in the following cases:
a) resident individual aged less than sixty years
b) non-resident individual aged less than sixty years
c) resident individual who is a senior citizen
d) non-resident individual who is a senior citizen
e) resident individual who is a very senior citizen
f) non-resident individual who is a very senior citizen
g) Resident HUF
h) Non-resident HUF
2. When is surcharge applicable and at what rate?
3. Who is eligible for rebate u/s 87A?
4. Explain provisions relating to rounding off of total income
5. Explain provisions relating to rounding off of tax payable

1.19 Summing up

Taxes (a source of revenue for the government)

Direct taxes (impact and incidence is on Indirect taxes (impact & incidence is on
same person) differend people)
 Sources to Read Income Tax

Legal Decision
Annual Finance Of High Court
Income Act & Supreme
Income Tax Act Tax Rules Court
1961 1962 Circulars &
(Finance Act Notification
tells about the (Decisions of
(Income tax (Rules are rates of tax in High
act covers made to carry advance i.e. (Circulars are court/Supreme
basic out basic rates of tax for issued for Court are final
provisions of provisions of the year in internal decisions i.e.
income tax, income tax which assessee department neither the
Assessment effectively and would earn the workings i.e. assessee nor the
procedures, efficiently. income. For circulars cannot department can
Penalties & However in any e.g..Finance act bind assessee challenge the
prosecutions case rules 2018 tells and decision of
i.e. computation cannot override about the rates notifications Supreme Court.
of income, the basic of tax for are issued for Note- High
computation of provisions to assessment general public.) court decision
tax liability income tax i.e. year 2019-20 can be
etc.) rules are sub- i.e. for the challenged in
ordinate to the previous year Supreme
act.) 2018-19 Court.)

Some important definitions

Assessment
Person Assessee Assessment Previous Income
Year
Year
 Receipts

Revenue Capital

Generated from routine operations Generated from transfer of a revenue

generating asset

Always taxable unless specifically Always exempted unless

exempt specifically taxed

Income (classified under five heads)

Income from Profits &

Salary Income from Capital Gains Income from
House Property Gains of
other sources
business or
profession
 Status Income tax slabs
Nil 5% 20% 30%
Resident individual below 60 Upto Rs. 2,50,000 – 5,00,000 to exceeding
years, non-resident individual and 2,50,000 5,00,000 10,00,000 10,00,000
HUF
Resident individual (60 to 79 Upto Rs. 3,00,000 – 5,00,000 to exceeding
years) 3,00,000 5,00,000 10,00,000 10,00,000
Resident individual (80 years & Upto Rs. - 5,00,000 to exceeding
above) 5,00,000 10,00,000 10,00,000

Health & Education Cess @ 4%

Surcharge @ 10% of tax where total income exceeds Rs. 50 lakh – for all persons
Surcharge @ 15% of tax where total income exceeds Rs. 1 crore – for all persons
In case of payment of surcharge, always check if the person is eligible for marginal relief
Rebate upto Rs. 12,500 available to resident individuals having income ≤ Rs. 500,000
Total income and total tax payable should always be rounded off to the nearest multiple of
rupees ten

New Optional Tax regime u/s 115BAC

Any individual / HUF Tax Rate

Up to Rs. 2,50,000 0%
From Rs. 2,50,000 to Rs. 5,00,000 5%
From Rs. 5,00,000 to Rs. 7,50,000 10%
From Rs. 7,50,000 to Rs. 10,00,000 15%
From Rs. 10,00,000 to Rs. 12,50,000 20%
From Rs. 12,50,000 to Rs. 15,00,000 25%
Above Rs. 15,00,000 30%
Suggested readings
Students guide to Income Tax by Vinod Singhania and Monica Singhania – Taxmann
Publications Pvt. Ltd., New Delhi

Systematic approach to Income tax by Girish Ahuja and Ravi Gupta – Bharat Law House, Delhi

Answers to check your progress

Answers to Section 1.9
1. Why does the government levy and collect tax? – Refer Section 1.3
2. Name the types of taxes and give examples. – Refer Section 1.4
3. Distinguish between direct and indirect tax – Refer Section 1.4
4. What are the sources to study income tax? – Refer Section 1.5
5. Explain the following terms:
 a) Person – Refer Section 1.6.1
b) Assessee – Refer Section 1.6.2
c) Assessment – Refer Section 1.6.3
d) Previous year – Refer Section 1.6.5
e) Assessment year – Refer Section 1.6.4
f) Income – Refer Section 1.6.6
6. Distinguish between revenue receipts and capital receipts – Refer Section 1.7
7. According to income tax, income can be classified into how many heads? Name them. –
Refer Section 1.8

Answers to Section 1.18

1. Specify the slab rates applicable in the following cases:
a) resident individual aged less than sixty years – Refer Section 1.10 – Table A
b) non-resident individual aged less than sixty years – Refer Section 1.10 – Table A
c) resident individual who is a senior citizen – Refer Section 1.10 – Table B
d) non-resident individual who is a senior citizen – Refer Section 1.10 – Table A
e) resident individual who is a very senior citizen – Refer Section 1.10 – Table C
f) non-resident individual who is a very senior citizen – Refer Section 1.10 – Table A
g) Resident HUF – Refer Section 1.10 – Table A
h) Non-resident HUF – Refer Section 1.10 – Table A
2. When is surcharge applicable and at what rate? – Refer Section 1.11
3. Who is eligible for rebate u/s 87A? – Refer Section 1.13
4. Explain provisions relating to rounding off of total income – Refer Section 1.15
5. Explain provisions relating to rounding off of tax payable – Refer Section 1.16

Practice questions
Determine the total tax payable in the following cases: (assuming that the assesse has not opted
for the optional tax regime u/s 115BAC unless specifically mentioned)
1. Mr. X a resident aged less than sixty years having total income of Rs.5,05,004
Hint: Total tax payable = Rs. 14,040
2. Mr. X a non-resident aged less than sixty years having total income of Rs.5,19,997
Hint: Total tax payable = Rs. 17,160
3. Mr. X a resident senior citizen having total income of Rs.5,15,635
Hint: Total tax payable = Rs. 13,650
4. Mr. X a non-resident senior citizen has total income of
Rs.12,50,000 Hint: Total tax payable = Rs. 1,95,000
5. Mr. X resident very senior citizen having total income of
Rs.24,00,000 Hint: Total tax payable = Rs. 5,40,800
6. Mr. X a non-resident very senior citizen having total income of
Rs.14,00,000 Hint: Total tax payable = Rs. 2,41,800
7. Mr. X a non-resident senior citizen having total income of
Rs.4,50,000 Hint: Total tax payable = Rs. 10,400
8. Mr. X a resident very senior citizen having total income of
Rs.4,99,000 Hint: Total tax payable = Nil
9. ABC HUF having total income of Rs. 15,00,000
Hint: Total tax payable = Rs. 2,73,000
10. Mr. X a resident senior citizen having total income of Rs. 50,50,000
Hint: Total tax payable = Rs. 14,14,400
11. Mr. X a resident very senior citizen having total income of Rs.
50,50,000 Hint: Total tax payable = Rs. 14,04,000
12. Mr. X a resident senior citizen having total income of Rs. 1,01,00,000
Hint: Total tax payable = Rs. 33,18,640
13. Mr. X a resident very senior citizen having total income of Rs.
1,01,00,000 Hint: Total tax payable = Rs. 33,07,200
14. Mr. X a non-resident aged less than sixty years having total income of Rs. 51,00,000
Hint: Total tax payable = Rs. 14,69,000
15. Mr. X a resident senior citizen having total income of Rs. 51,00,000
Hint: Total tax payable = Rs. 14,66,400
16. Mr. X a resident very senior citizen having total income of Rs.
51,00,000 Hint: Total tax payable = Rs. 14,56,000
17. Mr. X a resident aged less than sixty years having total income of Rs. 1,02,00,000
Hint: Total tax payable = Rs. 34,25,500
18. Mr. X a resident senior citizen having total income of Rs. 1,02,00,000
Hint: Total tax payable = Rs. 34,22,640
19. Mr. X a resident very senior citizen having total income of Rs.
1,02,00,000 Hint: Total tax payable = Rs. 34,11,200
20. ABC HUF having total income of Rs. 50,10,000
Hint: Total tax payable = Rs. 13,75,400
21. ABC HUF having total income of Rs. 1,00,50,000
Hint: Total tax payable = Rs. 32,69,500
22. ABC HUF having total income of Rs. 25,00,000 & opted for payment of tax u/s115BAC
Hint: Total tax payable = Rs. 5,07,000
23. Mr. X a resident individual total income of Rs. 35,00,000 & opted for payment of tax
u/s115BAC (assuming age to be 35 years, 71 years and 86 years)
Hint: Total tax payable = Rs. 8,19,000 irrespective of the age of the individual
24. Mr. X a non-resident individual total income of Rs. 35,00,000 & opted for payment of tax
u/s115BAC (assuming age to be 35 years, 71 years and 86 years)
Hint: Total tax payable = Rs. 8,19,000 irrespective of the age of the individual
References
Income Tax Act, 1961
Income Tax Rules, 1962
Applicable Annual Finance Act
www.incometaxindia.gov.in