solve it........

R, has computed his gross total income for the A.Y. 2009-10. which amounted to Rs. 290000.

 

It includes:

*Rs. 150000 on account of LTCG &,

*Rs. 10000 on account of winning horse races.

 

He has deposited Rs. 70000 in a PPF during the P.Y.

 

Compute the tax payable by R, assuming that :

1. he is less than 65 years of age.

2. he is more than 65 years of age & resident in India.

3. he is more than 65 years of age & non-resident in India.

Replies (5)

if he is less than 65 yrs..

deduction u/s 80C to  U is not applicable to long term capital gains.

so the tax computed will be on 220000

since R is taxable only because of capital gains the tax liability comes to

220000-160000 (i.e 50000 @ 20% = Rs. 10000 and horse income @ 30% of 10000 =3000)

total =13000+EC+SHEC

if he is more than 65 yrs

then the taxable income comes to 220000 , hence not taxable

Rs.10000/- will get taxed @ 30% flat rate .

thanks

LTCG-Rs.150000, Winning....-Rs.10000,  'Other' Income-Rs.130000

CASE 1 :

  1. Winning.. Rs.10000 taxable @ 30%(u/s115BB) - Rs.3000
  2. LTCG Rs.150000 taxable @ 20% (u/s 112 - after basic limit exemption for Resident Ind & HUF). Therefore LTCG taxable wud be

              150000-[150000-(130000-70000)]

              LTCG-[Basic Limit-('other' income-PPF u/s 80C)]

               = 60000 * 20% = Rs.12000

             

Total Tax Payable wud be - (12000+3000)Rs.15000+450(cess)=Rs.15450


CASE 2 :

  1. Same as above - Rs.3000
  2. Now Basic Exemption Limit wud be Rs.225000, and therefore LTCG wont be taxable,  [since after adjusting Rs.60000(other income after 80 C dedn.) against the basic limit of Rs.225000, still Rs.165000 wud be available for adjusting against LTCG whereas LTCG=Rs.150000 only]

Total Tax Payable wud be-Rs.3000+90= Rs.3090


CASE 3:

  1. Same as above - Rs.3000
  2. Whole of LTCG - Rs.150000 wud be taxable @ 20% [since adjusting Basic Exemption Limit against LTCG is not allowed for Non Residents] - Rs.30000
  3. Other income - Rs.130000-70000< basic exemption limit of Rs.225000, therefore no tax

Total Tax payable - (3000+30000)  Rs.33000+990=Rs.33990


 

  • my doubt is whether Winning.... wud be added to Gross Total Income in CASE 1, 2nd Step in order to find the GTI adjusted against Basic exemption Limit. [in case 2 it wudn't make a difference even if its added]
  • my reason for not adding it is - Winnings are taxed @ 30% flat rate irrespective of GTI, therefore it must not be added

CORRECT ME IF IAM WRONG...

Why no posts after my reply, maybe is it toooooo long to read & reply. well here's my TRY on simplifying it:

  1. Winnings from Lottery wud be taxable @ 30% flat rate (as posted already by Mangesh)
  2. LTCG for first 2 cases wud be taxabe @ 20% after deducting available BASIC LIMIT(150000, 225000 respectively). Available basic limit would be Basic Limit (-) 130000 (-) 70000 [Chapter VI A Dedn.]. For the 3rd case LTCG wud be wholly taxable @ 20% without any ded. from it
  3. The 'other' income [i.e.income other than Winning..., LTCG] in all 3 cases wud be less than the BASIC LIMIT, therefore income taxable @ normal rates wud be NIL.

and my doubt again posted here 4 those who haven't read the above.

  • my doubt is whether Winning.... wud be added to Gross Total Income in CASE 1, 2nd Step in order to find the GTI adjusted against Basic exemption Limit. [in case 2 it wudn't make a difference even if its added]
  • my reason for not adding it is - Winnings are taxed @ 30% flat rate irrespective of GTI, therefore it must not be added

CORRECT ME IF IAM WRONG...

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