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Taxability of A Senior Citizen

Shivam Rastogi (Articled Assistant) (34 Points)

26 October 2010

MR. SARVESH, A RESIDENT SENIOR CITIZEN WHOM TOTAL INCOME IS2,50,000. THIS INCOME INCLUDES "INCOME FROM WINNING FROM LOTTERIES" 20,000. COMPUTE THE TAX LIABILITY OF MR. SARVESH FOR THE A.Y. 2010-2011.

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A RESIDENT INDIVIDUAL WHOM TOTAL INCOME IS RS 20,000 ONLY FROM "INCOME FROM WINNING FROM LOTTERIES". COMPUTE THE TAX LIABILITY OF INDIVIDUALFOR THE A.Y. 2010-2011.

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18 Replies

CA Navin Jain (MANAGER (FINANCE & ACCOUNTS)) (11768 Points)
Replied 26 October 2010

Tax liability is Rs. 1030

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(Guest)

his tax liability will be 20000*30%=6000 if income from lotteries is before tds

remaining income will not be taxed because it is under exemption limit.

if 20000 is after tds ,tax will be computed as 20000/70*30=8571

(Guest)

ca.navin sir can u please explain

Bhavin Bhadra (Job) (174 Points)
Replied 26 October 2010

agreed with Gaurav

rohit jain (ipcc student) (32 Points)
Replied 26 October 2010

please explain the above

in my view

solution:computation of tax liability for the assesment yr 2010-2011

gross total income (taxable) = Rs 2,50,000

includes winnings from lottery Rs 20,000 @ 30% (comes under casual income)

= Rs 6,000

balance amount = Rs 2,50,000 - 20,000 = Rs 2,30,000(taxable as per slab rate)

bt in case of senior citizen up to Rs 2,40,000 tax liability is nil

and we have only Rs 2,30,000 < Rs 2,40,000 hence no tax on this amount

therfore total tax liability = Rs 6,000

kindly notify me if i am wrong :rohit jain

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Abhijit (CA final Student) (214 Points)
Replied 27 October 2010

I also agree with Gaurav and Rohit but cant understand the logic behind Mr. Navin Jains unswer, would he please explain his point?

Dattatray (Account Executive) (51 Points)
Replied 27 October 2010

Hiii

I fully agree with Rohit Jain.

Bcoz Income tax slab rate for Senior Citizen for AY 10-11 is 2,40,000 is basic exemption

and if his income includes winning from lotteries then 2,50,000 minus 20,000

on 2,30,000 no tax have to pay but

Income from Winning from lotteries is Rs.20,000/- so 20,000 * 30% = 6,000

and as per Shivam's another question

If he dont have any other income apart from winning from lotteries then also his tax liability will be the same i.e. Rs.6,000.00

vaibhav (M.Com. CA ) (178 Points)
Replied 27 October 2010

Hi friends

In the case of income from lottery etc. no basic exemption is available

hence tax liability shall be 20000*30 % = 6000+180 cess=6180 in both cases.

you may refer sec 12 BB of IT ACT 1961

vaibhav

rohit jain (ipcc student) (32 Points)
Replied 27 October 2010

agreed with vaibhav ec @ 3% is mandatory ec is computed on the total tax liability and the amount is added to the total tax liability u/s 12BB of the income tax act 1961

Ankit Mundra (CA Final Student B.Com L.L.B. (3rd Year)) (129 Points)
Replied 27 October 2010

well... if you are asking this question referring to a practical (real world) situation, then the Assessee has to file a Nil Return because Income from Lottery is always received after TDS, but as the assessee's gross taxable income is above the Rs 2,40,000/- , he needs to file his return.

The tax computation shown by others is correct.

In Theoritical questions (from some book), you need to specify TDS calculation also.