Capital Gains u/s. 111A and 112

Sir

I want to have clarification on the following issue:

An assessee has total income of Rs.270000 for a.y,2009-2010 including LTCG Rs.65000. What would be his tax liablity out of the given two:

1. Tax on Total Income excl.LTCG i.e.205000         5500                  

     Tax on LTCG                                                            13000

      Total Tax                                                                   18500

2. Basic Exemption limit would first be adjusted out OF LTCG and rest of the income will be taxable at 10%.

    Basic Exemption Limit           85000+65000 =     150000

    Balance Income 120000            Total Tax =      12000

 Thanks in advance.

DHIRAJ