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ANSWERS OF MODEL TEST PAPER 2 
INTERMEDIATE COURSE: GROUP - I 
PAPER – 3: TAXATION 
SECTION – A: INCOME TAX LAW 
Division A – Multiple Choice Questions 
MCQ 
No. 
Sub-part Most Appropriate 
Answer 
 MCQ 
No. 
Most Appropriate 
Answer 
1. (i) (b)  2. (b) 
 (ii) (d)  3. (c) 
 (iii) (b)    
 (iv) (a)    
 (v) (a)    
 (vi) (a)    
Division B – Descriptive Questions 
1.  Computation of total income of Mr. Sunil for A.Y. 2025-26 under default 
tax regime under section 115BAC 
 Particulars ? ? ? 
I Income from house property     
 Let out portion [First floor]    
 Gross Annual Value [Rent received 
is taken as GAV, in the absence of 
other information] 
 2,95,000  
 Less: Municipal taxes paid by him in 
the P.Y. 2024-25 pertaining to let 
out portion [ ? 25,000/2] 
  
   12,500 
 
 Net Annual Value (NAV)  2,82,500  
 Less: Deduction u/s 24     
 (a) 30% of ? 2,82,500 84,750   
 (b) Interest on housing loan  
[ ? 1,50,000/2] 
75,000 1,59,750  
   1,22,750  
 Self-occupied portion [Ground 
Floor] 
   
 Annual Value  Nil  
 [No deduction is allowable in 
respect of municipal taxes paid] 
  
 
 
 
 Less: Interest on housing loan [Not 
allowable under section 115BAC] 
             Nil  
   Nil  
 Income from house property    1,22,750 
489
Page 2


ANSWERS OF MODEL TEST PAPER 2 
INTERMEDIATE COURSE: GROUP - I 
PAPER – 3: TAXATION 
SECTION – A: INCOME TAX LAW 
Division A – Multiple Choice Questions 
MCQ 
No. 
Sub-part Most Appropriate 
Answer 
 MCQ 
No. 
Most Appropriate 
Answer 
1. (i) (b)  2. (b) 
 (ii) (d)  3. (c) 
 (iii) (b)    
 (iv) (a)    
 (v) (a)    
 (vi) (a)    
Division B – Descriptive Questions 
1.  Computation of total income of Mr. Sunil for A.Y. 2025-26 under default 
tax regime under section 115BAC 
 Particulars ? ? ? 
I Income from house property     
 Let out portion [First floor]    
 Gross Annual Value [Rent received 
is taken as GAV, in the absence of 
other information] 
 2,95,000  
 Less: Municipal taxes paid by him in 
the P.Y. 2024-25 pertaining to let 
out portion [ ? 25,000/2] 
  
   12,500 
 
 Net Annual Value (NAV)  2,82,500  
 Less: Deduction u/s 24     
 (a) 30% of ? 2,82,500 84,750   
 (b) Interest on housing loan  
[ ? 1,50,000/2] 
75,000 1,59,750  
   1,22,750  
 Self-occupied portion [Ground 
Floor] 
   
 Annual Value  Nil  
 [No deduction is allowable in 
respect of municipal taxes paid] 
  
 
 
 
 Less: Interest on housing loan [Not 
allowable under section 115BAC] 
             Nil  
   Nil  
 Income from house property    1,22,750 
489
II Profits and gains of business or 
profession 
   
 Income from SEZ unit   40,00,000 
III Capital Gains    
 Long-term capital gains on sale 
of land (since held for more than 
24 months) 
   
 Full Value of Consideration [Actual 
consideration of ? 15 lakhs, since 
stamp duty value of ? 16 lakhs does 
not exceed 110% of actual 
consideration of ? 15 lakhs]  
 15,00,000  
 Less: Cost of acquisition  
[ ? 4,00,000] (As transfer is on or 
after 23.07.2024, the indexation 
benefit would not be available)   
  
4,00,000 
 
 
11,00,000 
 Cost of acquisition    
 Higher of -    
 - Actual cost ? 2.80 lakhs + ? 0.12 
lakhs = ? 2.92 lakhs and 
   
 - Fair Market Value (FMV) as on 
1.4.2001 = ? 4.8 lakhs but cannot 
exceed stamp duty value of ? 4 
lakhs. 
   
IV Income from Other Sources     
 Interest on savings bank deposits     30,000  
 Interest on fixed deposits     40,000     70,000 
 Gross Total Income   52,92,750 
 Less: Deduction under Chapter  
VI-A 
   
 Deduction under section 80JJAA   7,12,800 
 30% of the employee cost of the 
new employees employed during 
the P.Y. 2024-25 for 240 days or 
more during the P.Y. 2024-25 
allowable as deduction [30% of  
? 23,76,000 (12 x 18,000 x 11)]   
As per section 115BAC, no 
deduction under section 10AA or 
under Chapter VI-A is allowable 
except u/s 80JJAA 
   
 Total Income   45,79,950 
 
  
490
Page 3


ANSWERS OF MODEL TEST PAPER 2 
INTERMEDIATE COURSE: GROUP - I 
PAPER – 3: TAXATION 
SECTION – A: INCOME TAX LAW 
Division A – Multiple Choice Questions 
MCQ 
No. 
Sub-part Most Appropriate 
Answer 
 MCQ 
No. 
Most Appropriate 
Answer 
1. (i) (b)  2. (b) 
 (ii) (d)  3. (c) 
 (iii) (b)    
 (iv) (a)    
 (v) (a)    
 (vi) (a)    
Division B – Descriptive Questions 
1.  Computation of total income of Mr. Sunil for A.Y. 2025-26 under default 
tax regime under section 115BAC 
 Particulars ? ? ? 
I Income from house property     
 Let out portion [First floor]    
 Gross Annual Value [Rent received 
is taken as GAV, in the absence of 
other information] 
 2,95,000  
 Less: Municipal taxes paid by him in 
the P.Y. 2024-25 pertaining to let 
out portion [ ? 25,000/2] 
  
   12,500 
 
 Net Annual Value (NAV)  2,82,500  
 Less: Deduction u/s 24     
 (a) 30% of ? 2,82,500 84,750   
 (b) Interest on housing loan  
[ ? 1,50,000/2] 
75,000 1,59,750  
   1,22,750  
 Self-occupied portion [Ground 
Floor] 
   
 Annual Value  Nil  
 [No deduction is allowable in 
respect of municipal taxes paid] 
  
 
 
 
 Less: Interest on housing loan [Not 
allowable under section 115BAC] 
             Nil  
   Nil  
 Income from house property    1,22,750 
489
II Profits and gains of business or 
profession 
   
 Income from SEZ unit   40,00,000 
III Capital Gains    
 Long-term capital gains on sale 
of land (since held for more than 
24 months) 
   
 Full Value of Consideration [Actual 
consideration of ? 15 lakhs, since 
stamp duty value of ? 16 lakhs does 
not exceed 110% of actual 
consideration of ? 15 lakhs]  
 15,00,000  
 Less: Cost of acquisition  
[ ? 4,00,000] (As transfer is on or 
after 23.07.2024, the indexation 
benefit would not be available)   
  
4,00,000 
 
 
11,00,000 
 Cost of acquisition    
 Higher of -    
 - Actual cost ? 2.80 lakhs + ? 0.12 
lakhs = ? 2.92 lakhs and 
   
 - Fair Market Value (FMV) as on 
1.4.2001 = ? 4.8 lakhs but cannot 
exceed stamp duty value of ? 4 
lakhs. 
   
IV Income from Other Sources     
 Interest on savings bank deposits     30,000  
 Interest on fixed deposits     40,000     70,000 
 Gross Total Income   52,92,750 
 Less: Deduction under Chapter  
VI-A 
   
 Deduction under section 80JJAA   7,12,800 
 30% of the employee cost of the 
new employees employed during 
the P.Y. 2024-25 for 240 days or 
more during the P.Y. 2024-25 
allowable as deduction [30% of  
? 23,76,000 (12 x 18,000 x 11)]   
As per section 115BAC, no 
deduction under section 10AA or 
under Chapter VI-A is allowable 
except u/s 80JJAA 
   
 Total Income   45,79,950 
 
  
490
Computation of tax liability of Mr. Sunil under section 115BAC 
Particulars ? ? 
Tax on total income of ? 45,79,950   
Tax on LTCG on sale of vacant land  
As the asset is a long term capital asset, being 
land acquired before 23.07.2024 and transferred 
on or after 23.07.2024 by a resident individual, the 
tax shall be computed @20% with indexation 
benefit or @12.5% without indexation benefit, 
whichever is more beneficial to the assessee.  
Tax @20% with indexation  
Sale consideration = 15,00,000 
Cost of acquisition = 4,00,000 x 363/100 = 14,52,000 
Gain = 48,000 
Tax @20% = 48,000 x 20% = 9,600 
Tax @12.5% without indexation  
Tax @12.5% = 11,00,000 x 12.5% = 1,37,500 
Tax on LTCG on sale of vacant land @20% with 
indexation  
  
 
 
 
 
 
 
 
 
 
 
 
 
 
9,600 
 
Tax on remaining total income of ? 34,79,950   
Upto ? 3,00,000 Nil  
? 3,00,001 – ? 7,00,000 [@5% of ? 4 lakhs] 20,000  
? 7,00,001 – ? 10,00,000 [@10% of ? 3 lakhs] 30,000  
? 10,00,001 – ? 12,00,000 [@15% of ? 2 lakhs] 30,000  
? 12,00,001 – ? 15,00,000 [@20% of ? 3 lakhs] 60,000  
? 15,00,001 – ? 34,79,950 [@30% of ? 19,79,950] 5,93,985  
7,33,985 
  7,43,585 
Add: Health and education cess@4%     29,743 
Total tax liability  7,73,328 
Tax liability (Rounded off)  7,73,330 
Note - An individual paying tax u/s 115BAC is not liable to alternate 
minimum tax u/s 115JC. 
2. (a)  Under section 6(1), an individual is said to be resident in India in any 
previous year, if he satisfies any one of the following conditions: 
(i) He has been in India during the previous year for a total period of 
182 days or more, or 
(ii) He has been in India during the 4 years immediately preceding 
the previous year for a total period of 365 days or more and has 
been in India for at least 60 days in the previous year. 
491
Page 4


ANSWERS OF MODEL TEST PAPER 2 
INTERMEDIATE COURSE: GROUP - I 
PAPER – 3: TAXATION 
SECTION – A: INCOME TAX LAW 
Division A – Multiple Choice Questions 
MCQ 
No. 
Sub-part Most Appropriate 
Answer 
 MCQ 
No. 
Most Appropriate 
Answer 
1. (i) (b)  2. (b) 
 (ii) (d)  3. (c) 
 (iii) (b)    
 (iv) (a)    
 (v) (a)    
 (vi) (a)    
Division B – Descriptive Questions 
1.  Computation of total income of Mr. Sunil for A.Y. 2025-26 under default 
tax regime under section 115BAC 
 Particulars ? ? ? 
I Income from house property     
 Let out portion [First floor]    
 Gross Annual Value [Rent received 
is taken as GAV, in the absence of 
other information] 
 2,95,000  
 Less: Municipal taxes paid by him in 
the P.Y. 2024-25 pertaining to let 
out portion [ ? 25,000/2] 
  
   12,500 
 
 Net Annual Value (NAV)  2,82,500  
 Less: Deduction u/s 24     
 (a) 30% of ? 2,82,500 84,750   
 (b) Interest on housing loan  
[ ? 1,50,000/2] 
75,000 1,59,750  
   1,22,750  
 Self-occupied portion [Ground 
Floor] 
   
 Annual Value  Nil  
 [No deduction is allowable in 
respect of municipal taxes paid] 
  
 
 
 
 Less: Interest on housing loan [Not 
allowable under section 115BAC] 
             Nil  
   Nil  
 Income from house property    1,22,750 
489
II Profits and gains of business or 
profession 
   
 Income from SEZ unit   40,00,000 
III Capital Gains    
 Long-term capital gains on sale 
of land (since held for more than 
24 months) 
   
 Full Value of Consideration [Actual 
consideration of ? 15 lakhs, since 
stamp duty value of ? 16 lakhs does 
not exceed 110% of actual 
consideration of ? 15 lakhs]  
 15,00,000  
 Less: Cost of acquisition  
[ ? 4,00,000] (As transfer is on or 
after 23.07.2024, the indexation 
benefit would not be available)   
  
4,00,000 
 
 
11,00,000 
 Cost of acquisition    
 Higher of -    
 - Actual cost ? 2.80 lakhs + ? 0.12 
lakhs = ? 2.92 lakhs and 
   
 - Fair Market Value (FMV) as on 
1.4.2001 = ? 4.8 lakhs but cannot 
exceed stamp duty value of ? 4 
lakhs. 
   
IV Income from Other Sources     
 Interest on savings bank deposits     30,000  
 Interest on fixed deposits     40,000     70,000 
 Gross Total Income   52,92,750 
 Less: Deduction under Chapter  
VI-A 
   
 Deduction under section 80JJAA   7,12,800 
 30% of the employee cost of the 
new employees employed during 
the P.Y. 2024-25 for 240 days or 
more during the P.Y. 2024-25 
allowable as deduction [30% of  
? 23,76,000 (12 x 18,000 x 11)]   
As per section 115BAC, no 
deduction under section 10AA or 
under Chapter VI-A is allowable 
except u/s 80JJAA 
   
 Total Income   45,79,950 
 
  
490
Computation of tax liability of Mr. Sunil under section 115BAC 
Particulars ? ? 
Tax on total income of ? 45,79,950   
Tax on LTCG on sale of vacant land  
As the asset is a long term capital asset, being 
land acquired before 23.07.2024 and transferred 
on or after 23.07.2024 by a resident individual, the 
tax shall be computed @20% with indexation 
benefit or @12.5% without indexation benefit, 
whichever is more beneficial to the assessee.  
Tax @20% with indexation  
Sale consideration = 15,00,000 
Cost of acquisition = 4,00,000 x 363/100 = 14,52,000 
Gain = 48,000 
Tax @20% = 48,000 x 20% = 9,600 
Tax @12.5% without indexation  
Tax @12.5% = 11,00,000 x 12.5% = 1,37,500 
Tax on LTCG on sale of vacant land @20% with 
indexation  
  
 
 
 
 
 
 
 
 
 
 
 
 
 
9,600 
 
Tax on remaining total income of ? 34,79,950   
Upto ? 3,00,000 Nil  
? 3,00,001 – ? 7,00,000 [@5% of ? 4 lakhs] 20,000  
? 7,00,001 – ? 10,00,000 [@10% of ? 3 lakhs] 30,000  
? 10,00,001 – ? 12,00,000 [@15% of ? 2 lakhs] 30,000  
? 12,00,001 – ? 15,00,000 [@20% of ? 3 lakhs] 60,000  
? 15,00,001 – ? 34,79,950 [@30% of ? 19,79,950] 5,93,985  
7,33,985 
  7,43,585 
Add: Health and education cess@4%     29,743 
Total tax liability  7,73,328 
Tax liability (Rounded off)  7,73,330 
Note - An individual paying tax u/s 115BAC is not liable to alternate 
minimum tax u/s 115JC. 
2. (a)  Under section 6(1), an individual is said to be resident in India in any 
previous year, if he satisfies any one of the following conditions: 
(i) He has been in India during the previous year for a total period of 
182 days or more, or 
(ii) He has been in India during the 4 years immediately preceding 
the previous year for a total period of 365 days or more and has 
been in India for at least 60 days in the previous year. 
491
 If an individual satisfies any one of the conditions mentioned above, he 
is a resident. If both the above conditions are not satisfied, the 
individual is a non-resident.  
 Therefore, the residential status of Mrs. Sia D’Souza, an American, for 
A.Y.2025-26 has to be determined on the basis of her stay in India 
during the previous year relevant to A.Y. 2025-26 i.e. P.Y.2024-25 and 
in the preceding four assessment years. 
 Her stay in India during the previous year 2024-25 and in the preceding 
four years are as under: 
 P.Y. 2024-25 
 01.04.2024 to 16.08.2024  - 138 days 
 23.03.2025 to 31.03.2025  -     9 days 
       Total 147 days 
Four preceding previous years 
P.Y.2023-24 [1.4.2023 to 31.3.2024] -  14 days 
P.Y.2022-23 [1.4.2022 to 31.3.2023] -  Nil 
P.Y.2021-22 [1.4.2021 to 31.3.2022] -  Nil 
P.Y.2020-21 [1.4.2020 to 31.3.2021] -          Nil 
  Total             14 days 
 The total stay of Mrs. Sia D’Souza during the previous year in India 
was less than 182 days and during the four years preceding this year 
was for 14 days. Therefore, due to non-fulfillment of any of the two 
conditions for a resident, she would be treated as non-resident for the 
Assessment Year 2025-26. 
 Computation of total income of Mrs. Sia D’Souza for the  
A.Y. 2025-26 
Particulars ? ? 
Income from house property   
Flat located in Mumbai let-out from 01.06.2024 
to 31.03.2025 @ ? 26,000 p.m.  
Gross Annual Value [26,000 x 10]
1
  
 
 
2,60,000 
 
Less: Municipal taxes          Nil  
Net Annual Value (NAV) 2,60,000  
Less: Deduction under section 24    
30% of NAV 78,000   
Interest on loan [fully allowable as 
deduction, since property is let-out]  
2,05,000 2,83,000 (23,000) 
 
1
 Actual rent received has been taken as the gross annual the value in absence of other information 
(i.e. Municipal value, fair rental value and standard rent) in the question. 
492
Page 5


ANSWERS OF MODEL TEST PAPER 2 
INTERMEDIATE COURSE: GROUP - I 
PAPER – 3: TAXATION 
SECTION – A: INCOME TAX LAW 
Division A – Multiple Choice Questions 
MCQ 
No. 
Sub-part Most Appropriate 
Answer 
 MCQ 
No. 
Most Appropriate 
Answer 
1. (i) (b)  2. (b) 
 (ii) (d)  3. (c) 
 (iii) (b)    
 (iv) (a)    
 (v) (a)    
 (vi) (a)    
Division B – Descriptive Questions 
1.  Computation of total income of Mr. Sunil for A.Y. 2025-26 under default 
tax regime under section 115BAC 
 Particulars ? ? ? 
I Income from house property     
 Let out portion [First floor]    
 Gross Annual Value [Rent received 
is taken as GAV, in the absence of 
other information] 
 2,95,000  
 Less: Municipal taxes paid by him in 
the P.Y. 2024-25 pertaining to let 
out portion [ ? 25,000/2] 
  
   12,500 
 
 Net Annual Value (NAV)  2,82,500  
 Less: Deduction u/s 24     
 (a) 30% of ? 2,82,500 84,750   
 (b) Interest on housing loan  
[ ? 1,50,000/2] 
75,000 1,59,750  
   1,22,750  
 Self-occupied portion [Ground 
Floor] 
   
 Annual Value  Nil  
 [No deduction is allowable in 
respect of municipal taxes paid] 
  
 
 
 
 Less: Interest on housing loan [Not 
allowable under section 115BAC] 
             Nil  
   Nil  
 Income from house property    1,22,750 
489
II Profits and gains of business or 
profession 
   
 Income from SEZ unit   40,00,000 
III Capital Gains    
 Long-term capital gains on sale 
of land (since held for more than 
24 months) 
   
 Full Value of Consideration [Actual 
consideration of ? 15 lakhs, since 
stamp duty value of ? 16 lakhs does 
not exceed 110% of actual 
consideration of ? 15 lakhs]  
 15,00,000  
 Less: Cost of acquisition  
[ ? 4,00,000] (As transfer is on or 
after 23.07.2024, the indexation 
benefit would not be available)   
  
4,00,000 
 
 
11,00,000 
 Cost of acquisition    
 Higher of -    
 - Actual cost ? 2.80 lakhs + ? 0.12 
lakhs = ? 2.92 lakhs and 
   
 - Fair Market Value (FMV) as on 
1.4.2001 = ? 4.8 lakhs but cannot 
exceed stamp duty value of ? 4 
lakhs. 
   
IV Income from Other Sources     
 Interest on savings bank deposits     30,000  
 Interest on fixed deposits     40,000     70,000 
 Gross Total Income   52,92,750 
 Less: Deduction under Chapter  
VI-A 
   
 Deduction under section 80JJAA   7,12,800 
 30% of the employee cost of the 
new employees employed during 
the P.Y. 2024-25 for 240 days or 
more during the P.Y. 2024-25 
allowable as deduction [30% of  
? 23,76,000 (12 x 18,000 x 11)]   
As per section 115BAC, no 
deduction under section 10AA or 
under Chapter VI-A is allowable 
except u/s 80JJAA 
   
 Total Income   45,79,950 
 
  
490
Computation of tax liability of Mr. Sunil under section 115BAC 
Particulars ? ? 
Tax on total income of ? 45,79,950   
Tax on LTCG on sale of vacant land  
As the asset is a long term capital asset, being 
land acquired before 23.07.2024 and transferred 
on or after 23.07.2024 by a resident individual, the 
tax shall be computed @20% with indexation 
benefit or @12.5% without indexation benefit, 
whichever is more beneficial to the assessee.  
Tax @20% with indexation  
Sale consideration = 15,00,000 
Cost of acquisition = 4,00,000 x 363/100 = 14,52,000 
Gain = 48,000 
Tax @20% = 48,000 x 20% = 9,600 
Tax @12.5% without indexation  
Tax @12.5% = 11,00,000 x 12.5% = 1,37,500 
Tax on LTCG on sale of vacant land @20% with 
indexation  
  
 
 
 
 
 
 
 
 
 
 
 
 
 
9,600 
 
Tax on remaining total income of ? 34,79,950   
Upto ? 3,00,000 Nil  
? 3,00,001 – ? 7,00,000 [@5% of ? 4 lakhs] 20,000  
? 7,00,001 – ? 10,00,000 [@10% of ? 3 lakhs] 30,000  
? 10,00,001 – ? 12,00,000 [@15% of ? 2 lakhs] 30,000  
? 12,00,001 – ? 15,00,000 [@20% of ? 3 lakhs] 60,000  
? 15,00,001 – ? 34,79,950 [@30% of ? 19,79,950] 5,93,985  
7,33,985 
  7,43,585 
Add: Health and education cess@4%     29,743 
Total tax liability  7,73,328 
Tax liability (Rounded off)  7,73,330 
Note - An individual paying tax u/s 115BAC is not liable to alternate 
minimum tax u/s 115JC. 
2. (a)  Under section 6(1), an individual is said to be resident in India in any 
previous year, if he satisfies any one of the following conditions: 
(i) He has been in India during the previous year for a total period of 
182 days or more, or 
(ii) He has been in India during the 4 years immediately preceding 
the previous year for a total period of 365 days or more and has 
been in India for at least 60 days in the previous year. 
491
 If an individual satisfies any one of the conditions mentioned above, he 
is a resident. If both the above conditions are not satisfied, the 
individual is a non-resident.  
 Therefore, the residential status of Mrs. Sia D’Souza, an American, for 
A.Y.2025-26 has to be determined on the basis of her stay in India 
during the previous year relevant to A.Y. 2025-26 i.e. P.Y.2024-25 and 
in the preceding four assessment years. 
 Her stay in India during the previous year 2024-25 and in the preceding 
four years are as under: 
 P.Y. 2024-25 
 01.04.2024 to 16.08.2024  - 138 days 
 23.03.2025 to 31.03.2025  -     9 days 
       Total 147 days 
Four preceding previous years 
P.Y.2023-24 [1.4.2023 to 31.3.2024] -  14 days 
P.Y.2022-23 [1.4.2022 to 31.3.2023] -  Nil 
P.Y.2021-22 [1.4.2021 to 31.3.2022] -  Nil 
P.Y.2020-21 [1.4.2020 to 31.3.2021] -          Nil 
  Total             14 days 
 The total stay of Mrs. Sia D’Souza during the previous year in India 
was less than 182 days and during the four years preceding this year 
was for 14 days. Therefore, due to non-fulfillment of any of the two 
conditions for a resident, she would be treated as non-resident for the 
Assessment Year 2025-26. 
 Computation of total income of Mrs. Sia D’Souza for the  
A.Y. 2025-26 
Particulars ? ? 
Income from house property   
Flat located in Mumbai let-out from 01.06.2024 
to 31.03.2025 @ ? 26,000 p.m.  
Gross Annual Value [26,000 x 10]
1
  
 
 
2,60,000 
 
Less: Municipal taxes          Nil  
Net Annual Value (NAV) 2,60,000  
Less: Deduction under section 24    
30% of NAV 78,000   
Interest on loan [fully allowable as 
deduction, since property is let-out]  
2,05,000 2,83,000 (23,000) 
 
1
 Actual rent received has been taken as the gross annual the value in absence of other information 
(i.e. Municipal value, fair rental value and standard rent) in the question. 
492
Income from other sources   
- Gold chain worth ? 1,50,000 received from 
parents of husband would be exempt, 
since parents of husband fall within the 
definition of relatives and gifts from a 
relative are not chargeable to tax. 
 
Nil 
 
- Gift received from friends of her husband 
aggregating to ? 1,65,000 is taxable under 
section 56(2)(x) since the amount of cash 
gifts of ? 1,65,000 exceeds ? 50,000.  
 
 
 
1,65,000 
 
 
 
1,65,000 
Gross Total income/ Total Income  1,42,000 
(b) TDS implications 
(i) Tax @ 5% till ? 7 lakhs and 20% thereafter, is required to be 
collected u/s 206C(1G) by the seller of an overseas tour 
programme package, from Mr. Harish, being the buyer of an 
overseas tour package, even if payment is made by account 
payee cheque.   
 Accordingly, tax has to be collected@5% on ? 7 lakh and 20% on 
? 3 lakhs. 
 TCS = ? 95,000 
(ii) Mr. Aditya has to deduct tax at source@5% u/s 194M, although 
his turnover for the P.Y. 2023-24 does not exceed ? 1 crore and 
he is not liable to deduct tax at source under section 194C, since 
the payment to contractor, Mr. Naresh, exceeds ? 50 lakhs. 
Accordingly, tax has to be deducted @5% on ? 55 lakhs. 
TDS = ? 2,75,000 
3.  (a) Computation of gross total income of Ms. Priyanka for the  
A.Y. 2025-26 under normal provisions of the Act 
 Particulars ? ? 
(a) Income from salaries (See Working 
Note below) 
 5,71,000 
(b) Income from Other Sources    
 (i) Interest on fixed deposit with a 
company 
7,000  
 (ii) Income from specified mutual fund 3,000  
 (iii) Interest on Fixed Deposit received 
by minor daughter ( ? 4,000 -  
? 1500) 
 
2,500 
 
     12,500 
Gross total income  5,83,500 
 
  
493
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