Taxation - Income TaxQuestion 5625 of 146
All Questions

3. Compute her total income for the assessment year 2024-25

Options

A` 1,93,800
B` 2,00,000
CNil
D` 2,05,000 (2 Marks) Case Scenario 2 Mr. Desai (aged 52 years) is an Indian resident. He gives the following information to you relating to the P.Y. 2023-24: (i) Profit from the business carried out in Dubai controlled from Dubai ` 13,10,000 (received in a bank account in Dubai). (ii) Loss from a business in Delhi - ` 4,50,000 (iii) During the F.Y. 2023-24, he also played some online games on a particular Indian website Game.com. Game.com is a manufacturer of men's shirts. During the year, Mr. Desai won 6 such shirts. The cost to manufacture such shirts by Game.com is ` 3,000 per piece and it sells these shirts at ` 10,000 per piece (excluding GST @18%). However, to play such games, Mr. Desai had to deposit a sum of ` 50,000 with the website as a refundable deposit. (iv) On 23rd May 2023, he gifted listed equity shares in an Indian company to his son's daughter, Ms. Shanaya. These shares were purchased by him on 1.4.2020 for ` 65,000. The market value as on the date of transfer was ` 1,00,000. Shanaya sold these shares for a consideration of ` 50,000 on 31.3.2024. (v) He had taken a loan of ` 25,00,000 for the purchase of an electric vehicle (for his personal purposes) on 1.4.2022 from a scheduled bank. He paid ` 5,00,000 as interest on such loan during the P.Y. 2023-24. (vi) He opts2 to be governed by the default provisions of taxation regime under the Act. 2 Read “opts” as “wants” TAXATION Based on the above information, answer multiple choice question no. 4-6:
For any discrepancies in this question, email contact@cadada.in

Correct Answer

✅ Option B — ` 2,00,000

All Options:

  • A` 1,93,800
  • B` 2,00,000 ✓
  • CNil
  • D` 2,05,000 (2 Marks) Case Scenario 2 Mr. Desai (aged 52 years) is an Indian resident. He gives the following information to you relating to the P.Y. 2023-24: (i) Profit from the business carried out in Dubai controlled from Dubai ` 13,10,000 (received in a bank account in Dubai). (ii) Loss from a business in Delhi - ` 4,50,000 (iii) During the F.Y. 2023-24, he also played some online games on a particular Indian website Game.com. Game.com is a manufacturer of men's shirts. During the year, Mr. Desai won 6 such shirts. The cost to manufacture such shirts by Game.com is ` 3,000 per piece and it sells these shirts at ` 10,000 per piece (excluding GST @18%). However, to play such games, Mr. Desai had to deposit a sum of ` 50,000 with the website as a refundable deposit. (iv) On 23rd May 2023, he gifted listed equity shares in an Indian company to his son's daughter, Ms. Shanaya. These shares were purchased by him on 1.4.2020 for ` 65,000. The market value as on the date of transfer was ` 1,00,000. Shanaya sold these shares for a consideration of ` 50,000 on 31.3.2024. (v) He had taken a loan of ` 25,00,000 for the purchase of an electric vehicle (for his personal purposes) on 1.4.2022 from a scheduled bank. He paid ` 5,00,000 as interest on such loan during the P.Y. 2023-24. (vi) He opts2 to be governed by the default provisions of taxation regime under the Act. 2 Read “opts” as “wants” TAXATION Based on the above information, answer multiple choice question no. 4-6:

Ad

Detailed Solution & Explanation

Let us compute the total income of Ms. Prerna for Assessment Year 2024-25:
1. **Income from House Property (Let-out portion - frac23textrd\displaystyle \\frac{2}{3}\\text{rd}):**
- **Municipal Value:** u20b92,40,000timesfrac23=u20b91,60,000\displaystyle \\u20b92,40,000 \\times \\frac{2}{3} = \\u20b91,60,000 per annum.
- **Fair Rent:** Given as u20b930,000\displaystyle \\u20b930,000 per month for the let-out portion only, i.e., u20b930,000times12=u20b93,60,000\displaystyle \\u20b930,000 \\times 12 = \\u20b93,60,000.
- **Standard Rent:** u20b93,00,000timesfrac23=u20b92,00,000\displaystyle \\u20b93,00,000 \\times \\frac{2}{3} = \\u20b92,00,000 per annum.
- **Expected Rent (ER):** Higher of Municipal Value (u20b91,60,000\displaystyle \\u20b91,60,000) and Fair Rent (u20b93,60,000\displaystyle \\u20b93,60,000), restricted to Standard Rent (u20b92,00,000\displaystyle \\u20b92,00,000). Thus, textER=u20b92,00,000\displaystyle \\text{ER} = \\u20b92,00,000.
- **Actual Rent:** u20b912,000textp.m.times12textmonths=u20b91,44,000\displaystyle \\u20b912,000 \\text{ p.m.} \\times 12 \\text{ months} = \\u20b91,44,000.
- **Gross Annual Value (GAV):** Higher of Expected Rent (u20b92,00,000\displaystyle \\u20b92,00,000) and Actual Rent (u20b91,44,000\displaystyle \\u20b91,44,000). Thus, textGAV=u20b92,00,000\displaystyle \\text{GAV} = \\u20b92,00,000.
- **Less: Municipal Taxes paid:** 10\displaystyle 10\\% of Municipal Value = 10\displaystyle 10\\% \\times \\u20b92,40,000 = \\u20b924,000 for the entire property.
- Municipal taxes paid for let-out portion = u20b924,000timesfrac23=u20b916,000\displaystyle \\u20b924,000 \\times \\frac{2}{3} = \\u20b916,000.
- **Net Annual Value (NAV):** textGAV−textMunicipalTaxespaid=u20b92,00,000−u20b916,000=u20b91,84,000\displaystyle \\text{GAV} - \\text{Municipal Taxes paid} = \\u20b92,00,000 - \\u20b916,000 = \\u20b91,84,000.
- **Less: Deductions under Section 24:**
- (a) Standard Deduction @ 30\displaystyle 30\\% of NAV = 30\displaystyle 30\\% \\times \\u20b91,84,000 = \\u20b955,200.
- (b) Interest on loan (as computed in Q1) = u20b91,35,000\displaystyle \\u20b91,35,000.
- Total Deductions = u20b955,200+u20b91,35,000=u20b91,90,200\displaystyle \\u20b955,200 + \\u20b91,35,000 = \\u20b91,90,200.
- **Income from let-out portion:** u20b91,84,000−u20b91,90,200=−u20b96,200\displaystyle \\u20b91,84,000 - \\u20b91,90,200 = -\\u20b96,200 (Loss of u20b96,200\displaystyle \\u20b96,200).
2. **Income from House Property (Self-occupied portion - frac13textrd\displaystyle \\frac{1}{3}\\text{rd}):**
- Annual Value = Nil.
- Deduction for interest under Section 24(b) is Nil under default tax regime (Section 115BAC).
- Net income = Nil.
3. **Total Income Computation:**
- Loss under the head "Income from house property" = −u20b96,200\displaystyle -\\u20b96,200.
- Other Income = u20b92,00,000\displaystyle \\u20b92,00,000.
- Under the default tax regime of Section 115BAC, loss from house property cannot be set off against any other head of income.
- Thus, the house property loss of u20b96,200\displaystyle \\u20b96,200 cannot be set off against "Other Income".
- Total Income = u20b92,00,000\displaystyle \\u20b92,00,000.

Hence, **Option B** is the correct answer.

More Questions from Taxation - Income Tax

On solving the inequalities 5x+y≤100\displaystyle 5x + y \le 100, x+y≤60\displaystyle x + y \le 60, x≥0\displaystyle x \ge 0, y≥0\displaystyle y \ge 0, we get the following solution:

An employer recruits experienced (x)\displaystyle (x) and fresh workmen (y)\displaystyle (y) for his under the condition that he cannot employ more than 11\displaystyle 11 people x\displaystyle x and y\displaystyle y can be related by the inequality.

The solution set of the equations x+2>0\displaystyle x + 2 > 0 and 2x−6>0\displaystyle 2x - 6 > 0 is

On solving the inequalities; we get 6x+y≥18\displaystyle 6x + y \ge 18, x+4y≥12\displaystyle x + 4y \ge 12, 2x+y≥10\displaystyle 2x + y \ge 10

Solve for x\displaystyle x of the inequalities 2≤3x−25≤4\displaystyle 2 \le \frac{3x - 2}{5} \le 4 where x∈N\displaystyle x \in N

The common region in the graph of the inequalities x+y≤4\displaystyle x + y \le 4, x−y≤4\displaystyle x - y \le 4, x≥2\displaystyle x \ge 2 is

Ready to Master Taxation - Income Tax?

Practice all 146 questions with instant feedback, earn XP, track your streaks, and ace your CA Foundation exam.

Start Practicing — It's Free