1.

Mr. Jitesh furnishes the following information for the year ended 31-03-2020ParticularsIncome From Business1,35,000Income From House Property(15,000)Lottery Winning (Gross)5,00,000Income by way of Salary (Computed)60,000Long term capital Gain u/s 11270,000Compute his total income and tax liability.

Answer»

Computation of total income of Balamurugan for the year ended 31.03.2020

Salaries60,000
Less: Loss from house property(15000)
Net Salary (after set off loss f rom house property)45,000
Profit and gains of business or profession
Income from business1,35,000
Capital gains
Long term capital gain70,000
Income from other sources
Lottery winnings (Gross)5,00,000
Total Income7,50,000

Computation of tax liability

On total income of 2,50,000 (excluding lottery winning)Nil
On lottery winnings of 5,00,000 @ 30%1,50,000
Add: Health and Education cess @ 4%6,000
Total tax liability1,56,000

Notes: The basic exemption limit of Rs.2,50,000 has to be first exhausted against salary income of 45,000 and business income of Rs. 1,35,000. The unexhausted basic exemption limit of 70,000 can be adjusted against long-term capital gains of Rs. 70,000 as per section 112, but not against lottery winnings which are taxable at a flat rate of 30% under section 115BB.



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