Question 5 OR (a)
Total income and tax under the new regime with winnings, a gift of property and share gains
12 marks
- Time to write
- About 24 minutes
- Notes
- Crux notes
Question
Question 5 OR (a) · 12 marksMs. Tannu (a residential individual, age: 28 years) furnished the information below for tax year 2026-27. For tax year 2026-27, compute her taxable income and tax liability. Assume Ms. Tannu has opted to be taxed under the new tax regime.
| 1) Income under the salary head | Rs. 300000 |
|---|---|
| 2) Bank interest on Fixed Deposit | Rs. 40000 |
| 3) A gift received from her brother on her marriage | Rs. 70000 |
| 4) From her close friend Ms. Karishma, purchased a house property | Rs. 700000 |
| The stamp value of the property is, however, | Rs. 1050000 |
| 5) Kaun Banega Crorepati winnings (TDS @ 30% deducted; net) | Rs. 490000 |
| 6) Dividend of from Microsoft Co. | Rs. 300000 |
| 7) On account of listed equity shares, long term capital loss of FY 2024-25 | (Rs. 75000) |
| 8) On listed equity shares, short term capital gain, and STT is paid | Rs. 140000 |
Paper note: Set under the Income-tax Act, 1961 for assessment year 2024-25 (previous year 2023-24); answered under the Income-tax Act, 2025 for tax year 2026-27, so the year term moves forward by 3 years and every date in the question moves forward by the same 3 years, so that intervals, holding periods and ages are as printed. Every figure and name is as printed. "Residential individual" is read as resident. "Dividend of from" is as printed.
Reworded from the university paper: names and figures differ, the task is the same. The original paper belongs to the University of Delhi. See DU's question bank.
Before you write
Read off the question and its marks
Read from the question
- Assume MsThe paper fixes this: use it as given, and say so in your answer.
- computeHead by head: each income under its head, exempt items marked exempt, then the deductions and the tax.
Write it in this order
- Read the data; note exactly what is asked 2 min
- 1 Gift from brother, gift of property and winnings 4 marks 7 min
- 2 Dividend, interest, capital gain and the brought-forward loss 3 marks 5 min
- 3 Total income 1½ marks 2 min
- 4 Tax at slab and special rates, cess and tax payable 3½ marks 6 min
- Check: arithmetic, units (₹, %), final answer underlined 2 min
Try it first. About 24 minutes for 12 marks. Write it out, then open the solution.
Solution
Hover or tap a marked figure, like 72,000, to see how it is made and where else it appears.
- Ms. Tannu is resident, and read as resident and ordinarily resident (the question does not say); her income under the salary head is the income chargeable under that head, after the standard deduction.
- She is taxed under the default regime of section 202(1), as the question says.
- The short-term gain is on listed equity shares sold on a recognised stock exchange with securities transaction tax paid (section 196(1)).
- The Microsoft dividend accrues outside India, as it is paid by a foreign company, so it is taxed to her as ordinarily resident (section 5(1)(c)). If not (she is not ordinarily resident and it was first received outside India), it is not part of her total income: total income ₹15,30,000, tax liability ₹2,62,600 and tax payable ₹52,600.
| Item | Treatment | Rs. |
|---|---|---|
| 1. Salary | Taxable under Salaries | 3,00,000 |
| 2. Interest on fixed deposit | Income from other sources; no deduction for deposit interest under the default regime | 40,000 |
| 3. Gift from brother on her marriage | Not taxable: received from a relative, and on marriage (section 92(3)(a), (b)) | Nil |
| 4. House bought from a friend for ₹7,00,000 with stamp duty value ₹10,50,000 | The excess, ₹3,50,000, exceeds the higher of ₹50,000 and 10% of the price (₹70,000), so all of it is income from other sources (section 92(2)(m)(ii)(B)) | 3,50,000 |
| 5. Kaun Banega Crorepati winnings: ₹4,90,000 received after tax deducted at 30% | Grossed up: ₹4,90,000 × 100/70; taxed at 30% with no deduction or basic exemption (sections 94(4), 194(1) Table: Sl. No. 1) | 7,00,000 |
| 6. Dividend from Microsoft Co. (a foreign company) | Income from other sources, at slab rates | 3,00,000 |
| 7. Long-term capital loss of 2024-25 on listed shares, brought forward | Can be set off only against long-term capital gains (section 111(1)(a)(ii)); there are none this year, so it is carried forward | — |
| 8. Short-term capital gain on listed shares, securities transaction tax paid | Taxed at 20% (section 196(1)) | 1,40,000 |
Computation of total income for tax year 2026-27
| Particulars | Rs. |
|---|---|
| Salaries | 3,00,000 |
| Short-term capital gain on listed shares | 1,40,000 |
| Income from other sources: interest | 40,000 |
| Income from other sources: excess stamp duty value of the house | 3,50,000 |
| Income from other sources: winnings (gross) | 7,00,000 |
| Income from other sources: foreign dividend | 3,00,000 |
| Gross total income = total income (no Chapter VIII deduction applies) | 18,30,000 |
The long-term capital loss of ₹75,000 is carried forward to the next tax year; it may be carried forward for eight tax years after the year in which it arose (section 111(2)).
| Particulars | Rs. |
|---|---|
| Income at slab rates (₹18,30,000 − ₹7,00,000 − ₹1,40,000) | 9,90,000 |
| Tax at the section 202(1) slabs: up to ₹4,00,000 nil; ₹4,00,001 to ₹8,00,000 at 5% | 20,000 |
| ₹8,00,001 to ₹9,90,000 at 10% | 19,000 |
| Winnings ₹7,00,000 at 30% | 2,10,000 |
| Short-term capital gain ₹1,40,000 at 20% | 28,000 |
| Tax before cess | 2,77,000 |
| Add: Health and Education Cess at 4% | 11,080 |
| Tax liability | 2,88,080 |
| Less: Tax deducted at source on the winnings | 2,10,000 |
| Tax payable | 78,080 |
No rebate is due: the total income exceeds ₹12,00,000, and the tax is far below the excess over ₹12,00,000 (section 156(2)). There is no surcharge, as the total income is below ₹50,00,000.
What changed from the Income-tax Act, 1961
The slabs of the default regime (₹4,00,000 nil band, then 5% steps of ₹4,00,000) and the 20% rate on short-term gains on listed shares (from 23 July 2024) replace the slabs and 15% rate of assessment year 2024-25. As set (given separately), the tax liability is ₹3,01,080.
Where the 12 marks sit
| # | Component | Marks |
|---|---|---|
| 1 | Gift from brother, gift of property and winnings | 4 |
| 2 | Dividend, interest, capital gain and the brought-forward loss | 3 |
| 3 | Total income | 1.5 |
| 4 | Tax at slab and special rates, cess and tax payable | 3.5 |
| Total | 12 |
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