Scribd
Upload
40 views3 pages

Tax Calculation for Mr. B's Income

Mr. B has a gross total income of 1,05,00,000, which includes earnings from business, gifts, and lottery winnings. After deductions totaling 1,70,000, his taxable income is calculated to be 1,03,30,000, with a normal taxable income of 2,311,500 and an additional 600,000 from lottery winnings. His total tax liability, including a 4% health and education cess, amounts to 3,027,960.

Uploaded by

kirmipatel1234
Copyright
© All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as DOCX, PDF, TXT or read online on Scribd
40 views3 pages

Tax Calculation for Mr. B's Income

Mr. B has a gross total income of 1,05,00,000, which includes earnings from business, gifts, and lottery winnings. After deductions totaling 1,70,000, his taxable income is calculated to be 1,03,30,000, with a normal taxable income of 2,311,500 and an additional 600,000 from lottery winnings. His total tax liability, including a 4% health and education cess, amounts to 3,027,960.

Uploaded by

kirmipatel1234
Copyright
© All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as DOCX, PDF, TXT or read online on Scribd

Assignment

Mr B aged 52 years, has earned rupees 78,00,000 out of his business. His ex- wife
gifted him cash in account worth rupees 7 lakh. He spent a total of rupees 21 lakh
during a family trip. He won a lottery of 20 lakh rupees. Out of happiness he gifted
his wife cash of rupees 450000. He bought a life insurance policy and paid a
premium of 60000 annually. He paid tuition fee for his daughter for rupees 40000.
He invested rupees 40000 in PPF. One of his existing life insurance policy got
matured and he received a total of rupees 30 lakh. Seeing his health conditions the
doctor adviced him a medical test of rupees 6000 following he bought a health
insurance for rupees 38000. Calculate his taxable income and tax liability.

Mr. B’s taxable income and tax liability

1. Income from business

78,00,000/-

2. Income from other sources

 Gift from ex wife - 7,00,000


 Lottery - 20,00,000
 Matured life insurance - 30,00,000 ( tax free)

Total income from other sources = 7,00,000 + 20,00,000


= 27,00,000

Gross total income = 78,00,000 (business) + 27,00,000 (other sources)


= 1,05,00,000/-
o Deductions :
Section 80 c Amount
Life insurance prrmium 60000
Tution fees for daughter 40000
Ppf investment 40000
Total 140000

Maximum limit is 1,50,000/- . So, 1,40,000/- is tax free.

Section 80 D Amount Deduction


Medical test 6000 5000
Insurance premium 38000 25000
Total 44000 30000

Total deduction = 1,40,000 + 30,000


= 1,70,000/-

Taxable income = total income – deduction (excluding lottery income)


= 85,00,000 – 1,70,000
= 83,30,000/-

TOTAL INCOME 8330000


Slab Percantage Taxable Tax
income
0-250000 0% 250000 0
250000-500000 5% 250000 12500
500000-1000000 20% 500000 100000
1000000- above 30% 7330000 2199000
TOTAL 2311500
Income from lottery winnings and online games are included under the head 'Other source of
Income' and is taxable at the special rate of 30% without providing the benefit of basic
exemption and deduction like 80C, 80D etc.

INCOME FROM LOTTERY AMOUNT


INCOME PERCANTA
GE
2000000 30% 600000

TOTAL TAXABLE INCOME 2311500 + 600000 2911500

Add 4% health and education Cess :


=2911500 * 4%
=116460

Total tax liability = 2911500 + 116460


= 3027960/-

SUMMARY :

INCOME AMOUNT
Gross total income 1,05,00,000
Less :Total deduction 1,70,000
Total income 1,03,30,000
Normal taxable income 2311500
Taxble income of lottery 600000
4% cess 116460
TOTAL TAX LIABILITY 3027960

You might also like