Case Study 2

Computation of Total Income and Tax Liability of Mr. Rohith for the Assesment Year 2019-20
Amoun
Particulars Amount t
Income from Salary 450000  
Deductions u/s 16(1A) 40000 410000
Income from House Property   30000
Income from Business/Profession   -80000
Income from Capital gain    
.Short term Capital Gain 20000  
.Long term Capital Gain 12000 32000
Income from Other Sources    
.Casual income 66000  
.Interest income 10000 76000
Gross Total Income   548000
Deductions Under Chapter VI A    
. Section 80C    
.1 Contribution to RPF (1000*12) 12000  
.2 LIC Premium(Self) 20000  
.Section 80CC    
.Contribution towards LIC pension Fund 12000 44000
.Section 80D    
.Medical Insurance Premium    
.Self 16000  
.Spouse 12000  
.Father 8000  
.Mother 5000 41000
Section 80DD    
.Paid for old Father's Treatment who is a handicap   60000
.Section 80E    
. Payment of interest on loan taken for his Son's Higher Education   24000
Set off u/s 71 80000  
House Property -30000  
Capital Gains -32000  
Income from Other Sources -10000  
Carry forward of Business loss for next Assessment Year   8000
Total Income   376000
Computation of Tax liability    
Basic Exemption Limit(250000)   0
(310000-250000) * 5%   3000
Casual income(winnings from various games) u/s 115 BB @ 30% 66000*30 19800
 %
(+) 4% Health and Education Cess   792
Tax liability   20592
Tax liability after rounding of u/s 288B   20590

As per Section 32 of Income Tax Unabsorbed Depreciation can be set off u/s 70 against any
business income . The Unabsorbed portion can be set off u/s 71 against any other income of the
Assessee for the same year except salary and casual winnings. Remaining Unabsorbed
Depreciation will be carried forward u/s 32(2) to be set off against any income except salary
and casual winnings till it is set off, i.e. without any time limit.

Mr. Rohith can reduce his tax liability by claiming deductions which are available under Chapter
VI A which is already mentioned above in the calculation of Total income.