Taxable income and tax with capital gains, lottery winnings and Chapter VI-A deductions (as set, 1961 Act, AY 2022-23)

Readings

1. X. A resident individual; his age is not given and he is read as below 60. The alternative regime is disregarded, as the question says.
2. Winnings. The ₹1,40,000 is net of tax deducted at source at 30% (section 194B), so the gross winnings are ₹1,40,000 × 100/70 = ₹2,00,000 (Finance Act, 2021, First Schedule, Part II: 30% on winnings from lotteries, puzzles and games).
3. Shares. The short-term gain on shares is read as on listed equity shares sold with securities transaction tax paid (section 111A, 15%). The gold has been held for more than three years (the gain is printed as long-term).
4. Premium and donation. The medical insurance premium paid on his own life is read as a premium on his own health insurance, paid otherwise than in cash out of his income chargeable to tax (section 80D(1)). The public provident fund account is read as his own (section 80C(2)(v) admits an account of a person named in section 80C(4)(a), which also admits a spouse's or child's). The donation to the approved charitable institution is read as paid otherwise than in cash.
5. Royalty. Read as income from other sources (X is not shown to be an author or inventor carrying on a profession).

Computation of gross total income

Deductions under Chapter VI-A

• Section 80DD: a resident individual who spends on the medical treatment of a dependant with a disability gets ₹75,000; ₹1,25,000 only where the disability is severe (80% or more). A sister is a dependant if wholly or mainly dependent on him (Explanation to section 80DD). (Persons with Disabilities Act, 1995, section 2(t): not less than 40% of a disability, certified by a medical authority; section 56(4): 80% or more for a severe disability.) He must furnish a copy of the medical authority's certificate, in the prescribed form and manner, with his return under section 139 (section 80DD(4)); it is taken to be so furnished. Where the certificate calls for a reassessment, nothing is allowed for a previous year beginning after the end of the previous year in which it expired, unless a new certificate is obtained and furnished with the return (proviso to section 80DD(4)).
• Section 80G qualifying limit: donations to the charitable institution count only up to 10% of the adjusted gross total income (section 80G(4)): gross total income ₹35,10,000 less the long-term gain ₹1,00,000 (section 112(2)), the gain of section 111A ₹70,000 (section 111A(2)) and every other Chapter VI-A deduction he is entitled to, ₹2,60,000 (sections 80C, 80D, 80DD and 80TTA) = ₹30,80,000; 10% is ₹3,08,000. The winnings stay in this base: they bear tax, and section 115BB has no rule like sections 112(2) and 111A(2) reducing gross total income. The ₹2,10,000 donated is within it, so 50% of ₹2,10,000 is deducted.
• No deduction against special-rate income: Chapter VI-A deductions do not reduce the long-term gain (section 112(2)), the gain of section 111A (section 111A(2)) or the winnings (section 58(4) and section 115BB). They are set against his other income of ₹31,40,000, which is well above ₹4,65,000.

Computation of taxable income

Computation of tax liability

If the facts are read otherwise

• X a resident aged 60 or more (but below 80): the exemption limit is ₹3,00,000, the section 80D limit ₹50,000 (so the whole ₹26,000) and section 80TTB replaces section 80TTA (the whole ₹40,000 of savings interest). Deductions ₹4,96,000, taxable income ₹30,14,000, tax liability ₹7,21,450 (₹7,21,448 rounded).
• X a resident aged 80 or more: the same deductions and taxable income as above (₹30,14,000), but the exemption limit is ₹5,00,000, so the slab tax on ₹26,44,000 is ₹5,93,200: tax ₹6,83,700, tax liability ₹7,11,050 (₹7,11,048 rounded).
• The shares sold without securities transaction tax (section 111A not met): the ₹70,000 is taxed at the slab rates instead of 15%; the deductions and taxable income (₹30,45,000) do not change, the slab part becomes ₹27,45,000 (slab tax ₹6,36,000), so tax on total income ₹7,16,000, tax liability ₹7,44,640 and tax payable ₹6,84,640.