Question 5 OR (b)
Net income of a severely disabled senior citizen under the old regime
12 marks
- Time to write
- About 24 minutes
- Notes
- Crux notes
Question
Question 5 OR (b) · 12 marksMr. Rahul (62 years, a severely disable person certified by AIMS Delhi) gives this information for the tax year ending 31st March, 2027.
| SN | Particulars | Amount (Rs.) |
|---|---|---|
| 1 | Business A carried on in India: profits | 185000 |
| 2 | Business B carried on in India: loss | (135000) |
| 3 | Salary income (computed) | 2250000 |
| 4 | Securities interest (net of TDS @10%) | 90000 |
| 5 | Purchase of an antique painting from his friend for a cost of Rs. 20000; the painting's market value is Rs. 125000 | |
| 6 | Minor daughter's professional income (out of her skills) | 10000 |
| 7 | Donation (in kind) of school bags to children | 7500 |
| 8 | Donation to the clean ganga fund | 150000 |
| 9 | Premium for medical insurance: himself Rs. 60000, parents Rs.65000 | 125000 |
| 10 | NSC VIII issue purchase | 120000 |
Assuming that he is a resident and ordinarily resident in India, determine his net income for the tax year 2026-27 under the old tax regime. (12)
Paper note: Set under the Income-tax Act, 1961 for assessment year 2025-26 (previous year 2024-25); answered under the Income-tax Act, 2025 for tax year 2026-27, so the year term moves forward by 2 years and every date in the question moves forward by the same 2 years, so that intervals, holding periods and ages are as printed. Every figure and name is as printed. "Severely disable person" and "AIMS Delhi" are 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
- Assuming that he is a resident…The paper fixes this: use it as given, and say so in your answer.
- determineFormula first, then the working, then the answer with its unit (₹, %, units).
Write it in this order
- Read the data; note exactly what is asked 2 min
- 1 Business income after set off, and salary 2 marks 3 min
- 2 Interest grossed up and the painting under the gift rule 3 marks 5 min
- 3 Minor's income and the donation in kind 2 marks 3 min
- 4 Deductions under sections 123, 126, 133 and 154 4 marks 7 min
- 5 Net income 1 mark 2 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.
- Mr. Rahul is resident and ordinarily resident and has opted out of the default regime (section 202(4)).
- His parents are senior citizens (he is 62), and the premiums and the donation to the Clean Ganga Fund were paid otherwise than in cash.
- He holds the medical authority's certificate of severe disability (80% or more) and furnishes it with his return.
| Particulars | Rs. | Rs. |
|---|---|---|
| Salaries (computed) | 22,50,000 | |
| Profits and gains of business | ||
| Business A: profit | 1,85,000 | |
| Business B: loss set off against business A (section 108) | (1,35,000) | 50,000 |
| Income from other sources | ||
| Interest on securities (₹90,000 grossed up at 10%) | 1,00,000 | |
| Antique painting bought from a friend for ₹20,000; fair market value ₹1,25,000; the difference exceeds ₹50,000, so the whole ₹1,05,000 is income (section 92(2)(m)) | 1,05,000 | 2,05,000 |
| Gross total income | 25,05,000 |
- Minor daughter's professional income (₹10,000): it comes from her own skill, so it is not clubbed with her parent's income (section 99(1)(c)).
- Donation of school bags (₹7,500): section 133 allows only sums of money donated; a donation in kind is not deductible.
| Particulars | Rs. |
|---|---|
| Section 123 (Schedule XV): NSC VIII issue | 1,20,000 |
| Section 126(8)(a): health insurance for himself, ₹60,000, limited to ₹50,000 (senior citizen) | 50,000 |
| Section 126(8)(a): health insurance for his parents, ₹65,000, limited to ₹50,000 (senior citizens) | 50,000 |
| Section 133(1)(a)(xxi): Clean Ganga Fund, 100%, no qualifying limit (resident donor) | 1,50,000 |
| Section 154: person with severe disability | 1,25,000 |
| Total deductions | 4,95,000 |
| Particulars | Rs. |
|---|---|
| Gross total income | 25,05,000 |
| Less: Deductions | 4,95,000 |
| Net (total) income | 20,10,000 |
The tax deducted on the securities interest (₹10,000) is credited against the tax on this income.
Where the 12 marks sit
| # | Component | Marks |
|---|---|---|
| 1 | Business income after set off, and salary | 2 |
| 2 | Interest grossed up and the painting under the gift rule | 3 |
| 3 | Minor's income and the donation in kind | 2 |
| 4 | Deductions under sections 123, 126, 133 and 154 | 4 |
| 5 | Net income | 1 |
| Total | 12 |
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