Basic Concepts and General Tax Rates

Overview of Taxation in India

What is Tax?
Taxes are mandatory contributions levied on individuals or corporations by a government entity.

Taxes
• The Constitution of India has a lot of Articles.
• Article 265 of the Constitution says that the Government cannot impose tax without the
authority of law.
• Seventh Schedule to Article 246 contains three lists which enumerate the matters under which
the Parliament and the State Legislatures have the authority to make laws for the purpose of
levy of taxes. These lists are:
o Union List: Parliament has the exclusive power to make laws on the matters contained
in Union List.
o State List: The Legislatures of any State has the exclusive power to make laws on the
matters contained in the State List.
o Concurrent List: Both Parliament and State Legislatures have the power to make laws
on the matters contained in the Concurrent list.
• What gives Government the power to collect tax?
o Entry No. 82 of Union List of Constitution of India gives power to the Central
Government to levy tax on all income other than Agricultural Income
o Entry No. 46 of State List of Constitution of India gives power to the State Government
to levy tax on Agricultural Income
• There are two kinds of taxes:
o Direct Tax – Income Tax
o Indirect Tax – GST, Excise, Customs, etc.

Direct Tax
• We’ll be studying Income Tax Law, which constitutes of
o Income Tax Act, 1961 (as amended by Finance Act, 2022) – Charge of Income Tax is
governed by the Income-Tax Act, 1961, which came into force w.e.f. 1st April, 1962.
o Income Tax Rules, 1962 – Section 295 of the Act empowers the Central Board of Direct
Taxes to make Rules.
o Notifications and Circulars issued by CBDT – Section 119 of the Act empowers the
CBDT to issue orders, instructions and directions for the proper administration of the
Act.
o Judicial Decisions (Case Laws)

Finance Act
• Presenting the Finance Bill: Every year on the 1st of February, the Finance Minister of India
presents a Finance Bill in the Parliament, which contains various amendments proposed to be
made in the direct and indirect taxes levied by the Central Government.

CA NISHANT KUMAR 1
 • Approval and Assent of Bill: As soon as the Bill is passed by both the houses of the Parliament
and thereafter receives the assent of the President of India, it becomes the Finance Act.
• Incorporation of Amendments: The amendments proposed therein are then incorporated in
the Income Tax Act which are applicable from the very first day of the next Financial Year.
For example, amendments by Finance Act, 2022 are effective from 01-04-2023.

Some Important Terms

Assessee
• In simple terms, one who is being assessed is known as Assessee.
• In technical terms, a person who is required to pay tax is known as Assessee.

Person
• Individual
o Nishant Kumar
• Hindu Undivided Family (HUF)
o Nishant Kumar’s HUF
• Company
o Sorting Hat Technologies Pvt. Ltd.
o Reliance Industries Ltd.
• Partnership Firm (Including LLP)
• Association of Persons (AOP)/ Body of Individuals (BOI)
o Joint Ventures
o Clubs
• Local Authority
o Municipal Committee
o District Board, etc.
• Artificial Juridical Person
o Anything which is not covered above
o Deities
o Bar Council
o Universities, etc.

Heads of Income
• Income from Salaries
o Employer Employee Relationship
• Income from House Property
o Ownership of House Property
• Profits and Gains from Business or Profession
• Capital Gains
o Transfer of a Capital Asset
• Income from Other Sources
o Anything which is not covered above

CA NISHANT KUMAR 2
Previous Year and Assessment Year
• The period in which a person earns the income is known as the Previous Year in respect of
that income, and the period in which the person pays tax on this income is known as the
Assessment Year.
• For example, if a person earns income in the F.Y. 2022-23, he would be required to pay tax on
it in the F.Y. 2023-24. So, for the income earned in F.Y. 2022-23, the P.Y. is 2022-2023, and the
A.Y. is 2023-24.

Tax Rates Applicable for A.Y. 2023-24 (P.Y. 2022-23)

In case of Individual/HUF/AOP/BOI/AJP
1. In case of Individual/HUF/AOP/BOI/AJP (Resident/Non-Resident)
Income Tax Rate
Upto ₹2,50,000 NIL
Above ₹2,50,000 upto ₹5,00,000 5%
Above ₹5,00,000 upto ₹10,00,000 20%
Above ₹10,00,000 30%
2. In case of Senior Citizens (Resident Individual aged 60 years or more in the P.Y.)
Income Tax Rate
Upto ₹3,00,000 NIL
Above ₹3,00,000 upto ₹5,00,000 5%
Above ₹5,00,000 upto ₹10,00,000 20%
Above ₹10,00,000 30%
3. In case of Super Senior Citizens (Resident Individual aged 80 years or more in the P.Y.)
Income Tax Rate
Upto ₹5,00,000 NIL
Above ₹5,00,000 upto ₹10,00,000 20%
Above ₹10,00,000 30%
60th/80th Birthday on 1st April, 2023
He’ll also get the benefit of Senior Citizen/Super Senior Citizen.

Surcharge
Surcharge means Extra Tax.

Income Tax Rate

Above ₹50,00,000 upto ₹1,00,00,000 10% of Tax
Above ₹1,00,00,000 upto ₹2,00,00,000 15% of Tax
Above ₹2,00,00,000 upto ₹5,00,00,000 25% of Tax
Above ₹5,00,00,000 37% of Tax
Health and Education Cess
• Cess means collection of tax for a specified purpose.
• It is calculated @ 4% on Tax (including Surcharge)

Question 1

Total Income of Ms. Madhuri, a Resident individual is ₹2,50,000. Calculate tax liability for A.Y. 2023-
24, assuming her age is 21 years.

CA NISHANT KUMAR 3
Solution

Computation of Tax Liability of Ms. Madhuri (Age 21 Years)

Particulars ₹
Tax Liability:
First ₹2,50,000 NIL -
-
Add: Surcharge -
-
Add: Health and Education Cess @ 4% -
Net Tax Payable -

Question 2

Total Income of Mr. Bansal, a Resident individual is ₹5,50,000. Calculate tax liability for A.Y. 2023-24,
assuming his age is 25 years.

Solution

Computation of Tax Liability of Mr. Bansal (Age 25 Years)

Particulars ₹
Tax Liability:
First ₹2,50,000 NIL -
Next ₹2,50,001 - ₹5,00,000 5% of ₹2,50,000 12,500
Next ₹5,00,001 - ₹5,50,000 20% of ₹50,000 10,000
22,500
Add: Surcharge -
22,500
Add: Health and Education Cess @ 4% 900
Net Tax Payable 23,400

Question 3

Mr. X has a total income of ₹12,00,000 for P.Y.2022-23, comprising of income from house property
and interest on fixed deposits. Compute his tax liability for A.Y.2023-24 assuming his age is 45 years.

Solution

Computation of Tax Liability of Mr. X (Age 45 Years)

Particulars ₹
Tax Liability:
First ₹2,50,000 NIL -
Next ₹2,50,001 - ₹5,00,000 5% of ₹2,50,000 12,500
Next ₹5,00,001 - ₹10,00,000 20% of ₹5,00,000 1,00,000
Balance, i.e., ₹12,00,000 minus ₹10,00,000 30% of ₹2,00,000 60,000
1,72,500
Add: Surcharge -
1,72,500
Add: Health and Education Cess @ 4% 6,900
Net Tax Payable 1,79,400

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Question 4

Total Income of Ms. Priyanka, a Resident individual is ₹15,10,000. Calculate tax liability for A.Y. 2023-
24, assuming her age is 21 years.

Solution

Computation of Tax Liability of Ms. Priyanka (Age 21 Years)

Particulars ₹
Tax Liability:
First ₹2,50,000 NIL -
Next ₹2,50,001 - ₹5,00,000 5% of ₹2,50,000 12,500
Next ₹5,00,001 - ₹10,00,000 20% of ₹5,00,000 1,00,000
Balance, i.e., ₹15,10,000 minus ₹10,00,000 30% of ₹5,10,000 1,53,000
2,65,500
Add: Surcharge -
2,65,500
Add: Health and Education Cess @ 4% 10,620
Net Tax Payable 2,76,120

Question 5

Total Income of NISH10 (Age 31 Years) is ₹15,60,000. Calculate tax liability for A.Y. 2023-24.

Solution

Computation of Tax Liability of NISH10 (Age 31 Years)

Particulars ₹
Tax Liability:
First ₹2,50,000 NIL -
Next ₹2,50,001 - ₹5,00,000 5% of ₹2,50,000 12,500
Next ₹5,00,001 - ₹10,00,000 20% of ₹5,00,000 1,00,000
Balance, i.e., ₹15,60,000 minus ₹10,00,000 30% of ₹5,60,000 1,68,000
2,80,500
Add: Surcharge -
2,80,500
Add: Health and Education Cess @ 4% 11,220
Net Tax Payable 2,91,720

Question 6

Total Income of Mr. Ghanshyam, a Resident individual is ₹50,00,000. Calculate tax liability for A.Y.
2023-24, assuming his age is 40 years.

Solution

Computation of Tax Liability of Mr. Ghanshyam (Age 40 Years)

Particulars ₹
Tax Liability:
First ₹2,50,000 NIL -
Next ₹2,50,001 - ₹5,00,000 5% of ₹2,50,000 12,500
Next ₹5,00,001 - ₹10,00,000 20% of ₹5,00,000 1,00,000
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 Balance, i.e., ₹50,00,000 minus ₹10,00,000 30% of ₹40,00,000 12,00,000
13,12,500
Add: Surcharge -
13,12,500
Add: Health and Education Cess @ 4% 52,500
Net Tax Payable 13,65,000

Question 7

Mr. X has a total income of ₹12,00,000 for P.Y.2022-23, comprising of income from house property
and interest on fixed deposits. Compute his tax liability for A.Y.2023-24 assuming his age is 63 years.

Solution

Computation of Tax Liability of Mr. X (Age 63 Years)

Particulars ₹
Tax Liability:
First ₹3,00,000 NIL -
Next ₹3,00,001 - ₹5,00,000 5% of ₹2,00,000 10,000
Next ₹5,00,001 - ₹10,00,000 20% of ₹5,00,000 1,00,000
Balance, i.e., ₹12,00,000 minus ₹10,00,000 30% of ₹2,00,000 60,000
1,70,000
Add: Surcharge -
1,70,000
Add: Health and Education Cess @ 4% 6,800
Net Tax Payable 1,76,800

Question 8

Mr. X has a total income of ₹12,00,000 for P.Y.2022-23, comprising of income from house property
and interest on fixed deposits. Compute his tax liability for A.Y.2023-24 assuming his age is 82 years.

Solution

Computation of Tax Liability of Mr. X (Age 82 Years)

Particulars ₹
Tax Liability:
First ₹5,00,000 NIL -
Next ₹5,00,001 - ₹10,00,000 20% of ₹5,00,000 1,00,000
Balance, i.e., ₹12,00,000 minus ₹10,00,000 30% of ₹2,00,000 60,000
1,60,000
Add: Surcharge -
1,60,000
Add: Health and Education Cess @ 4% 6,400
Net Tax Payable 1,66,400

Question 9

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Total Income of Mrs. Radhika, a Resident individual is ₹18,00,000. Calculate tax liability for A.Y. 2023-
24, assuming her age is 80 years.

Solution

Computation of Tax Liability of Mrs. Radhika (Age 80 Years)

Particulars ₹
Tax Liability:
First ₹5,00,000 NIL -
Next ₹5,00,001 - ₹10,00,000 20% of ₹5,00,000 1,00,000
Balance, i.e., ₹18,00,000 minus ₹10,00,000 30% of ₹8,00,000 2,40,000
3,40,000
Add: Surcharge -
3,40,000
Add: Health and Education Cess @ 4% 13,600
Net Tax Payable 3,53,600

Question 10

Total Income of Mrs. Swati, a Non-Resident individual is ₹2,75,000. Calculate tax liability for A.Y. 2023-
24, assuming her age is 65 years.

Solution

Computation of Tax Liability of Mrs. Swati (Age 65 Years)

Particulars ₹
Tax Liability:
First ₹2,50,000 NIL -
Balance, i.e., ₹2,75,000 minus ₹2,50,000 5% of ₹25,000 1,250
1,250
Add: Surcharge -
1,250
Add: Health and Education Cess @ 4% 50
Net Tax Payable 1,300

Question 11

Total Income of Mr. Y, a Resident individual is ₹1,10,00,000. Calculate tax liability for A.Y. 2023-24,
assuming his age is 50 years.

Solution

Computation of Tax Liability of Mr. Y (Age 50 Years)

Particulars ₹
Tax Liability:
First ₹2,50,000 NIL -
Next ₹2,50,001 - ₹5,00,000 5% of ₹2,50,000 12,500
Next ₹5,00,001 - ₹10,00,000 20% of ₹5,00,000 1,00,000
Balance, i.e., ₹1,10,00,000 minus ₹10,00,000 30% of ₹1,00,00,000 30,00,000
31,12,500
Add: Surcharge @ 15% 4,66,875
35,79,375

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 Add: Health and Education Cess @ 4% 1,43,175
Net Tax Payable 37,22,550

Question 12

Total Income of Mr. Z, a Resident individual is ₹1,00,00,000. Calculate tax liability for A.Y. 2023-24,
assuming his age is 55 years.

Solution

Computation of Tax Liability of Mr. Z (Age 55 Years)

Particulars ₹
Tax Liability:
First ₹2,50,000 NIL -
Next ₹2,50,001 - ₹5,00,000 5% of ₹2,50,000 12,500
Next ₹5,00,001 - ₹10,00,000 20% of ₹5,00,000 1,00,000
Balance, i.e., ₹1,00,00,000 minus ₹10,00,000 30% of ₹90,00,000 27,00,000
28,12,500
Add: Surcharge @ 10% 2,81,250
30,93,750
Add: Health and Education Cess @ 4% 1,23,750
Net Tax Payable 32,17,500

Question 13

Total Income of Mr. B, a Resident individual is ₹2,00,00,000. Calculate tax liability for A.Y. 2023-24,
assuming his age is 55 years.

Solution

Computation of Tax Liability of Mr. B (Age 55 Years)

Particulars ₹
Tax Liability:
First ₹2,50,000 NIL -
Next ₹2,50,001 - ₹5,00,000 5% of ₹2,50,000 12,500
Next ₹5,00,001 - ₹10,00,000 20% of ₹5,00,000 1,00,000
Balance, i.e., ₹2,00,00,000 minus ₹10,00,000 30% of ₹1,90,00,000 57,00,000
58,12,500
Add: Surcharge @ 15% 8,71,875
66,84,375
Add: Health and Education Cess @ 4% 2,67,375
Net Tax Payable 69,51,750

Question 14

Total Income of Mr. D, a Resident individual is ₹5,00,00,000. Calculate tax liability for A.Y. 2023-24,
assuming his age is 30 years.

Solution

Computation of Tax Liability of Mr. D (Age 30 Years)

CA NISHANT KUMAR 8
 Particulars ₹
Tax Liability:
First ₹2,50,000 NIL -
Next ₹2,50,001 - ₹5,00,000 5% of ₹2,50,000 12,500
Next ₹5,00,001 - ₹10,00,000 20% of ₹5,00,000 1,00,000
Balance, i.e., ₹5,00,00,000 minus ₹10,00,000 30% of ₹4,90,00,000 1,47,00,000
1,48,12,500
Add: Surcharge @ 25% 37,03,125
1,85,15,625
Add: Health and Education Cess @ 4% 7,40,625
Net Tax Payable 1,92,56,250

Question 15

Total Income of Mr. Hari (Age 62 Years) is ₹64,00,000. He is Resident in Previous Year. Calculate Tax
Liability.

Solution

Computation of Tax Liability of Mr. Hari (Age 64 Years)

Particulars ₹
Tax Liability:
First ₹3,00,000 NIL -
Next ₹3,00,001 - ₹5,00,000 5% of ₹2,00,000 10,000
Next ₹5,00,001 - ₹10,00,000 20% of ₹5,00,000 1,00,000
Balance, i.e., ₹64,00,000 minus ₹10,00,000 30% of ₹54,00,000 16,20,000
17,30,000
Add: Surcharge @ 10% 1,73,000
19,03,000
Add: Health and Education Cess @ 4% 76,120
Net Tax Payable 19,79,120

Question 16

Mr. Sam (Age 83 years) is a Non-Resident has total income of ₹1,20,30,000. Calculate tax liability for
A.Y. 2023-24 (P.Y. 2022-23).

Solution

Since he is Non-Resident, so, he’ll get the basic exemption limit of only ₹2,50,000.

Computation of Tax Liability of Mr. Sam (Age 83 Years)

Particulars ₹
Tax Liability:
First ₹2,50,000 NIL -
Next ₹2,50,001 - ₹5,00,000 5% of ₹2,50,000 12,500
Next ₹5,00,001 - ₹10,00,000 20% of ₹5,00,000 1,00,000
Balance, i.e., ₹1,20,30,000 minus ₹10,00,000 30% of ₹1,10,30,000 33,09,000
34,21,500
Add: Surcharge @ 15% 5,13,225

CA NISHANT KUMAR 9
 39,34,725
Add: Health and Education Cess @ 4% 1,57,389
Tax Payable 40,92,114
Net Tax Payable (Rounded Off) 40,92,110

Question 17

Total Income of Ms. Meena, a Resident individual is ₹51,00,000. Calculate tax liability for A.Y. 2023-
24, assuming her age is 55 years.

Solution

Computation of Tax Liability of Ms. Meena (Age 55 Years)

Particulars ₹
Tax Liability:
First ₹2,50,000 NIL -
Next ₹2,50,001 - ₹5,00,000 5% of ₹2,50,000 12,500
Next ₹5,00,001 - ₹10,00,000 20% of ₹5,00,000 1,00,000
Balance, i.e., ₹51,00,000 minus ₹10,00,000 30% of ₹41,00,000 12,30,000
13,42,500
Add: Surcharge @ 10% 1,34,250
14,76,750
Add: Health and Education Cess @ 4% 59,070
Net Tax Payable 15,35,820

Question 18

Total Income of Ms. Sushma, a Resident individual is ₹1,01,00,000. Calculate tax liability for A.Y. 2023-
24, assuming her age is 40 years.

Solution

Computation of Tax Liability of Ms. Sushma (Age 40 Years)

Particulars ₹
Tax Liability:
First ₹2,50,000 NIL -
Next ₹2,50,001 - ₹5,00,000 5% of ₹2,50,000 12,500
Next ₹5,00,001 - ₹10,00,000 20% of ₹5,00,000 1,00,000
Balance, i.e., ₹1,01,00,000 minus ₹10,00,000 30% of ₹91,00,000 27,30,000
28,42,500
Add: Surcharge @ 15% 4,26,375
32,68,875
Add: Health and Education Cess @ 4% 1,30,755
Net Tax Payable 33,99,630

Question 19

Total Income of Ms. Rekha, a Resident individual is ₹2,01,00,000. Calculate tax liability for A.Y. 2023-
24, assuming her age is 25 years.

Solution

CA NISHANT KUMAR 10
 Computation of Tax Liability of Ms. Rekha (Age 25 Years)
Particulars ₹
Tax Liability:
First ₹2,50,000 NIL -
Next ₹2,50,001 - ₹5,00,000 5% of ₹2,50,000 12,500
Next ₹5,00,001 - ₹10,00,000 20% of ₹5,00,000 1,00,000
Balance, i.e., ₹2,01,00,000 minus ₹10,00,000 30% of ₹1,91,00,000 57,30,000
58,42,500
Add: Surcharge @ 25% 14,60,625
73,03,125
Add: Health and Education Cess @ 4% 2,92,125
Net Tax Payable 75,95,250

Question 20

Total Income of Ms. Jaya, a Resident individual is ₹5,01,00,000. Calculate tax liability for A.Y. 2023-24,
assuming her age is 40 years.

Solution

Computation of Tax Liability of Mr. E (Age 40 Years)

Particulars ₹
Tax Liability:
First ₹2,50,000 NIL -
Next ₹2,50,001 - ₹5,00,000 5% of ₹2,50,000 12,500
Next ₹5,00,001 - ₹10,00,000 20% of ₹5,00,000 1,00,000
Balance, i.e., ₹5,01,00,000 minus ₹10,00,000 30% of ₹4,91,00,000 1,47,30,000
1,48,42,500
Add: Surcharge @ 37% 54,91,725
2,03,34,225
Add: Health and Education Cess @ 4% 8,13,369
Net Tax Payable 2,11,47,594

Marginal Relief
• Sometimes, when the income increases slightly, the increase in tax exceeds the increase in
income.
• Government provides relief with respect to excess of tax over excess of income.
• Such relief is known as Marginal Relief.

Question 21

Total Income of Ms. Meena, a Resident individual is ₹51,00,000. Calculate tax liability for A.Y. 2023-
24, assuming her age is 55 years.

Solution

Computation of tax liability of Ms. Meena for the A.Y.2023-24

Particulars ₹
Tax Liability:
First ₹2,50,000 NIL -
Next ₹2,50,001 - ₹5,00,000 5% of ₹2,50,000 12,500

CA NISHANT KUMAR 11
 Next ₹5,00,001 - ₹10,00,000 20% of ₹5,00,000 1,00,000
Balance, i.e., ₹51,00,000 minus ₹10,00,000 30% of ₹41,00,000 12,30,000
13,42,500
Add: Surcharge @ 10% 1,34,250
14,76,750
Restricted to:
Tax on ₹50,00,000 + (NTI – ₹50,00,000)
₹14,76,750 + (₹51,00,000 – ₹50,00,0000) 14,12,500
Lower of the above 14,12,500
Add: Health and Education Cess @ 4% 56,500
Tax Payable 14,69,000
Therefore, Marginal Relief 64,250

Computation of tax liability of Ms. Meena on 50 lakhs

Particulars ₹
Tax Liability:
First ₹2,50,000 NIL -
Next ₹2,50,001 - ₹5,00,000 5% of ₹2,50,000 12,500
Next ₹5,00,001 - ₹10,00,000 20% of ₹5,00,000 1,00,000
Balance, i.e., ₹50,00,000 minus ₹10,00,000 30% of ₹40,00,000 12,00,000
13,12,500
Add: Surcharge -
Tax 13,12,500

Question 22

Total Income of Ms. Sushma, a Resident individual is ₹1,01,00,000. Calculate tax liability for A.Y. 2023-
24, assuming her age is 40 years.

Solution

Computation of tax liability of Ms. Sushma for the A.Y.2023-24

Particulars ₹
Tax Liability:
First ₹2,50,000 NIL -
Next ₹2,50,001 - ₹5,00,000 5% of ₹2,50,000 12,500
Next ₹5,00,001 - ₹10,00,000 20% of ₹5,00,000 1,00,000
Balance, i.e., ₹1,01,00,000 minus ₹10,00,000 30% of ₹91,00,000 27,30,000
28,42,500
Add: Surcharge @ 15% 4,26,375
32,68,875
Restricted to:
Tax on ₹1,00,00,000 + (NTI – ₹1,00,00,000)
₹30,93,750 + (₹1,01,00,000 – ₹1,00,00,0000) 31,93,750
Lower of the above 31,93,750
Add: Health and Education Cess @ 4% 1,27,750
Tax Payable 33,21,500
Therefore, Marginal Relief 75,125

CA NISHANT KUMAR 12
 Computation of tax liability of Ms. Sushma on 1 crore
Particulars ₹
Tax Liability:
First ₹2,50,000 NIL -
Next ₹2,50,001 - ₹5,00,000 5% of ₹2,50,000 12,500
Next ₹5,00,001 - ₹10,00,000 20% of ₹5,00,000 1,00,000
Balance, i.e., ₹1,00,00,000 minus ₹10,00,000 30% of ₹90,00,000 27,00,000
28,12,500
Add: Surcharge @ 10% 2,81,250
Tax 30,93,750

Question 23

Total Income of Ms. Rekha, a Resident individual is ₹2,01,00,000. Calculate tax liability for A.Y. 2023-
24, assuming her age is 25 years.

Solution

Computation of tax liability of Ms. Rekha for the A.Y.2023-24

Particulars ₹
Tax Liability:
First ₹2,50,000 NIL -
Next ₹2,50,001 - ₹5,00,000 5% of ₹2,50,000 12,500
Next ₹5,00,001 - ₹10,00,000 20% of ₹5,00,000 1,00,000
Balance, i.e., ₹2,01,00,000 minus ₹10,00,000 30% of ₹1,91,00,000 57,30,000
58,42,500
Add: Surcharge @ 25% 14,60,625
73,03,125
Restricted to:
Tax on ₹2,00,00,000 + (NTI – ₹2,00,00,000)
₹66,84,375 + (₹2,01,00,000 – ₹2,00,00,0000) 67,84,375
Lower of the above 67,84,375
Add: Health and Education Cess @ 4% 2,71,375
Tax Payable 70,55,750
Therefore, Marginal Relief 5,18,750

Computation of tax liability of Ms. Rekha on 2 crore

Particulars ₹
Tax Liability:
First ₹2,50,000 NIL -
Next ₹2,50,001 - ₹5,00,000 5% of ₹2,50,000 12,500
Next ₹5,00,001 - ₹10,00,000 20% of ₹5,00,000 1,00,000
Balance, i.e., ₹2,00,00,000 minus ₹10,00,000 30% of ₹1,90,00,000 57,00,000
58,12,500
Add: Surcharge @ 15% 8,71,875
Tax 66,84,375

Question 24

CA NISHANT KUMAR 13
Total Income of Ms. Jaya, a Resident individual is ₹5,01,00,000. Calculate tax liability for A.Y. 2023-24,
assuming her age is 40 years.

Solution

Computation of tax liability of Ms. Jaya for the A.Y.2023-24

Particulars ₹
Tax Liability:
First ₹2,50,000 NIL -
Next ₹2,50,001 - ₹5,00,000 5% of ₹2,50,000 12,500
Next ₹5,00,001 - ₹10,00,000 20% of ₹5,00,000 1,00,000
Balance, i.e., ₹5,01,00,000 minus ₹10,00,000 30% of ₹4,91,00,000 1,47,30,000
1,48,42,500
Add: Surcharge @ 37% 54,91,725
2,03,34,225
Restricted to:
Tax on ₹5,00,00,000 + (NTI – ₹5,00,00,000)
₹1,85,15,625 + (₹5,01,00,000 – ₹5,00,00,0000) 1,86,15,625
Lower of the above 1,86,15,625
Add: Health and Education Cess @ 4% 7,44,625
Tax Payable 1,93,60,250
Therefore, Marginal Relief 17,18,600

Computation of tax liability of Ms. Jaya on 5 crore

Particulars ₹
Tax Liability:
First ₹2,50,000 NIL -
Next ₹2,50,001 - ₹5,00,000 5% of ₹2,50,000 12,500
Next ₹5,00,001 - ₹10,00,000 20% of ₹5,00,000 1,00,000
Balance, i.e., ₹5,00,00,000 minus ₹10,00,000 30% of ₹4,90,00,000 1,47,00,000
1,48,12,500
Add: Surcharge @ 25% 37,03,125
Tax 1,85,15,625

Question 25

NISH10, a resident individual has total income of ₹50,20,000. Calculate Tax liability.

Solution

Computation of Tax Liability of NISH10

Particulars ₹
Tax Liability:
First ₹2,50,000 NIL -
Next ₹2,50,001 - ₹5,00,000 5% of ₹2,50,000 12,500
Next ₹5,00,001 - ₹10,00,000 20% of ₹5,00,000 1,00,000
Balance, i.e., ₹50,20,000 minus ₹10,00,000 30% of ₹30,20,000 12,06,000
13,18,500
Add: Surcharge @ 10% 1,31,850
14,50,350
Restricted to:

CA NISHANT KUMAR 14
 Tax on ₹50,00,000 + (NTI – ₹50,00,000)
₹13,12,500 + ₹20,0000 13,32,500
Lower of the above 13,32,500
Add: Health and Education Cess @ 4% 53,300
Tax Payable 13,85,800
Therefore, Marginal Relief 1,17,850

Question 26

Compute the tax liability of Mr. A (aged 42), having total income of ₹51 lakhs for the Assessment Year
2023-24. Assume that his total income comprises of salary income, Income from house property and
interest on fixed deposit. Assume that Mr. A has not opted for the provisions of section 115BAC.

Solution

Computation of tax liability of Mr. A for the A.Y.2023-24

Particulars ₹
Tax Liability:
First ₹2,50,000 NIL -
Next ₹2,50,001 - ₹5,00,000 5% of ₹2,50,000 12,500
Next ₹5,00,001 - ₹10,00,000 20% of ₹5,00,000 1,00,000
Balance, i.e., ₹51,00,000 minus ₹10,00,000 30% of ₹41,00,000 12,30,000
13,42,500
Add: Surcharge @ 10% 1,34,250
14,76,750
Restricted to:
Tax on ₹50,00,000 + (NTI – ₹50,00,000)
₹14,76,750 + (₹51,00,000 – ₹50,00,0000) 14,12,500
Lower of the above 14,12,500
Add: Health and Education Cess @ 4% 56,500
Tax Payable 14,69,000
Therefore, Marginal Relief 64,250

Computation of tax liability of Mr. A on 50 lakhs

Particulars ₹
Tax Liability:
First ₹2,50,000 NIL -
Next ₹2,50,001 - ₹5,00,000 5% of ₹2,50,000 12,500
Next ₹5,00,001 - ₹10,00,000 20% of ₹5,00,000 1,00,000
Balance, i.e., ₹50,00,000 minus ₹10,00,000 30% of ₹40,00,000 12,00,000
13,12,500
Add: Surcharge -
Tax 13,12,500

Question 27

Compute the tax liability of Mr. A (aged 42), having total income of ₹1,01,00,000 for the Assessment
Year 2023-24. Assume that his total income comprises of “Salary Income”, “Income under the head
House Property” and “Interest from Fixed Deposit Account”. Assume that Mr. A has not opted for the
provisions of section 115BAC.
CA NISHANT KUMAR 15
Solution

Computation of tax liability of Mr. A for the A.Y.2023-24

Particulars ₹
Tax Liability:
First ₹2,50,000 NIL -
Next ₹2,50,001 - ₹5,00,000 5% of ₹2,50,000 12,500
Next ₹5,00,001 - ₹10,00,000 20% of ₹5,00,000 1,00,000
Balance, i.e., ₹1,01,00,000 minus ₹10,00,000 30% of ₹91,00,000 27,30,000
28,42,500
Add: Surcharge @ 15% 4,26,375
32,68,875
Restricted to:
Tax on ₹1,00,00,000 + (NTI – ₹1,00,00,000)
₹30,93,750 + (₹1,01,00,000 – ₹1,00,00,0000) 31,93,750
Lower of the above 31,93,750
Add: Health and Education Cess @ 4% 1,27,750
Tax Payable 33,21,500
Therefore, Marginal Relief 75,125

Computation of tax liability of Mr. A on 1 crore

Particulars ₹
Tax Liability:
First ₹2,50,000 NIL -
Next ₹2,50,001 - ₹5,00,000 5% of ₹2,50,000 12,500
Next ₹5,00,001 - ₹10,00,000 20% of ₹5,00,000 1,00,000
Balance, i.e., ₹1,00,00,000 minus ₹10,00,000 30% of ₹90,00,000 27,00,000
28,12,500
Add: Surcharge @ 10% 2,81,250
Tax 30,93,750

Question 28

Compute the tax liability of Mr. A (aged 42), having total income of ₹2,01,00,000 for the Assessment
Year 2023-24. Assume that his total income comprises of “Salary Income”, “Income under the head
House Property” and “Interest from Fixed Deposit Account”. Assume that Mr. A has not opted for the
provisions of section 115BAC.

Solution

Computation of tax liability of Mr. A for the A.Y.2023-24

Particulars ₹
Tax Liability:
First ₹2,50,000 NIL -
Next ₹2,50,001 - ₹5,00,000 5% of ₹2,50,000 12,500
Next ₹5,00,001 - ₹10,00,000 20% of ₹5,00,000 1,00,000
Balance, i.e., ₹2,01,00,000 minus ₹10,00,000 30% of ₹1,91,00,000 57,30,000
58,42,500
Add: Surcharge @ 25% 14,60,625
73,03,125

CA NISHANT KUMAR 16
 Restricted to:
Tax on ₹2,00,00,000 + (NTI – ₹2,00,00,000)
₹66,84,375 + (₹2,01,00,000 – ₹2,00,00,0000) 67,84,375
Lower of the above 67,84,375
Add: Health and Education Cess @ 4% 2,71,375
Tax Payable 70,55,750
Therefore, Marginal Relief 5,18,750

Computation of tax liability of Mr. A on 2 crore

Particulars ₹
Tax Liability:
First ₹2,50,000 NIL -
Next ₹2,50,001 - ₹5,00,000 5% of ₹2,50,000 12,500
Next ₹5,00,001 - ₹10,00,000 20% of ₹5,00,000 1,00,000
Balance, i.e., ₹2,00,00,000 minus ₹10,00,000 30% of ₹1,90,00,000 57,00,000
58,12,500
Add: Surcharge @ 15% 8,71,875
Tax 66,84,375

Question 29

Compute the tax liability of Mr. A (aged 42), having total income of ₹5,14,00,000 for the Assessment
Year 2023-24. Assume that his total income comprises of “Salary Income”, “Income under the head
House Property” and “Interest from Fixed Deposit Account”. Assume that Mr. A has not opted for the
provisions of section 115BAC.

Solution

Computation of tax liability of Mr. A for the A.Y.2023-24

Particulars ₹
Tax Liability:
First ₹2,50,000 NIL -
Next ₹2,50,001 - ₹5,00,000 5% of ₹2,50,000 12,500
Next ₹5,00,001 - ₹10,00,000 20% of ₹5,00,000 1,00,000
Balance, i.e., ₹5,14,00,000 minus ₹10,00,000 30% of ₹5,04,00,000 1,51,20,000
1,52,32,500
Add: Surcharge @ 37% 56,36,025
2,08,68,525
Restricted to:
Tax on ₹5,00,00,000 + (NTI – ₹5,00,00,000)
₹1,85,15,625 + (₹5,14,00,000 – ₹5,00,00,0000) 1,99,15,625
Lower of the above 1,99,15,625
Add: Health and Education Cess @ 4% 7,96,625
Tax Payable 2,07,12,250
Therefore, Marginal Relief 9,52,900

Computation of tax liability of Mr. A on 5 crore

Particulars ₹
CA NISHANT KUMAR 17
 Tax Liability:
First ₹2,50,000 NIL -
Next ₹2,50,001 - ₹5,00,000 5% of ₹2,50,000 12,500
Next ₹5,00,001 - ₹10,00,000 20% of ₹5,00,000 1,00,000
Balance, i.e., ₹5,00,00,000 minus ₹10,00,000 30% of ₹4,90,00,000 1,47,00,000
1,48,12,500
Add: Surcharge @ 25% 37,03,125
Tax 1,85,15,625

Question 30

Compute the tax liability of Mr. A (aged 42), having total income of ₹51,75,000 for the Assessment
Year 2023-24. Assume that his total income comprises of “Salary Income”, “Income under the head
House Property” and “Interest from Fixed Deposit Account”. Assume that Mr. A has not opted for the
provisions of section 115BAC.

Solution

Computation of tax liability of Mr. A for the A.Y.2023-24

Particulars ₹
Tax Liability:
First ₹2,50,000 NIL -
Next ₹2,50,001 - ₹5,00,000 5% of ₹2,50,000 12,500
Next ₹5,00,001 - ₹10,00,000 20% of ₹5,00,000 1,00,000
Balance, i.e., ₹51,75,000 minus ₹10,00,000 30% of ₹41,75,000 12,52,500
13,65,000
Add: Surcharge @ 10% 1,36,500
15,01,500
Restricted to:
Tax on ₹50,00,000 + (NTI – ₹50,00,000)
₹13,12,500 + (₹51,75,000 – ₹50,00,0000) 14,87,500
Lower of the above 14,87,500
Add: Health and Education Cess @ 4% 59,500
Tax Payable 15,47,000
Therefore, Marginal Relief 14,000

Computation of tax liability of Mr. A on 50 lakhs

Particulars ₹
Tax Liability:
First ₹2,50,000 NIL -
Next ₹2,50,001 - ₹5,00,000 5% of ₹2,50,000 12,500
Next ₹5,00,001 - ₹10,00,000 20% of ₹5,00,000 1,00,000
Balance, i.e., ₹50,00,000 minus ₹10,00,000 30% of ₹40,00,000 12,00,000
13,12,500
Add: Surcharge -
Tax 13,12,500

Question 31

CA NISHANT KUMAR 18
Compute the tax liability of Mr. A (aged 42), having total income of ₹5,01,00,000 for the Assessment
Year 2023-24. Assume that his total income comprises of “Salary Income”, “Income under the head
House Property” and “Interest from Fixed Deposit Account”. Assume that Mr. A has not opted for the
provisions of section 115BAC.

Solution

Computation of tax liability of Mr. A for the A.Y.2023-24

Particulars ₹
Tax Liability:
First ₹2,50,000 NIL -
Next ₹2,50,001 - ₹5,00,000 5% of ₹2,50,000 12,500
Next ₹5,00,001 - ₹10,00,000 20% of ₹5,00,000 1,00,000
Balance, i.e., ₹5,01,00,000 minus ₹10,00,000 30% of ₹4,91,00,000 1,47,30,000
1,48,42,500
Add: Surcharge @ 37% 54,91,725
2,03,34,225
Restricted to:
Tax on ₹5,00,00,000 + (NTI – ₹5,00,00,000)
₹1,85,15,625 + (₹5,01,00,000 – ₹5,00,00,0000) 1,86,15,625
Lower of the above 1,86,15,625
Add: Health and Education Cess @ 4% 7,44,625
Tax Payable 1,93,60,250
Therefore, Marginal Relief 17,18,600

Computation of tax liability of Mr. A on 5 crore

Particulars ₹
Tax Liability:
First ₹2,50,000 NIL -
Next ₹2,50,001 - ₹5,00,000 5% of ₹2,50,000 12,500
Next ₹5,00,001 - ₹10,00,000 20% of ₹5,00,000 1,00,000
Balance, i.e., ₹5,00,00,000 minus ₹10,00,000 30% of ₹4,90,00,000 1,47,00,000
1,48,12,500
Add: Surcharge @ 25% 37,03,125
Tax 1,85,15,625

Tax Rate in case of Companies

Particulars Tax Rates
A) Domestic Company
(i) Total T/o or Gross Receipts of P.Y. 2020-21 is upto 400 crores 25%
(ii) Otherwise 30%
B) Foreign Company 40%
Surcharge
Total Income Domestic Company Foreign Company
Above 1 crore upto 10 crores 7% 2%
Above 10 crores 12% 5%
Health and Education Cess @ 4%

CA NISHANT KUMAR 19
Question 32

Compute the marginal relief available to X Ltd., a domestic company, assuming that the total income
of X Ltd. is ₹1,01,00,000 for A.Y. 2023-24 and the total income does not include any income in the
nature of Capital Gains.

[Note – The gross receipts of X Ltd. for the P.Y. 2020-21 is ₹470 crore]

Solution

Computation of tax liability of X Ltd. for A.Y. 2023-24

Particulars ₹
Tax Liability: 30% on ₹1,01,00,000 30,30,000
Add: Surcharge @ 7% 2,12,100
32,42,100
Restricted to:
Tax on ₹1,00,00,000 + (NTI – ₹1,00,00,000)
₹30,00,000 + (₹1,01,00,000 – ₹1,00,00,0000) 31,00,000
Lower of the above 31,00,000
Add: Health and Education Cess @ 4% 1,24,000
Tax Payable 32,24,000
Therefore, Marginal Relief 1,42,100

Question 33

Compute the marginal relief available to Y Ltd., a domestic company, assuming that the total income
of Y Ltd. for AY 2023-24 is ₹10,01,30,000 and the total income does not include any income in the
nature of Capital Gains.

[Note – The gross receipts of Y Ltd. for the P.Y. 2020-21 is ₹490 crore]

Solution

Computation of tax liability of Y Ltd. for A.Y. 2023-24

Particulars ₹
Tax Liability: 30% on ₹10,01,30,000 3,00,39,000
Add: Surcharge @ 12% 36,04,680
3,36,43,680
Restricted to:
Tax on ₹10,00,00,000 + (NTI – ₹10,00,00,000)
₹3,21,00,000 + (₹10,01,30,000 – ₹10,00,00,0000) 3,22,30,000
Lower of the above 3,22,30,000
Add: Health and Education Cess @ 4% 12,89,200
Tax Payable 3,35,19,200
Therefore, Marginal Relief 14,13,680

Computation of tax liability of Y Ltd. on ₹10 crores

Particulars ₹
Tax Liability: 30% on ₹10,00,00,000 3,00,00,000
Add: Surcharge @ 7% 21,00,000
Tax 3,21,00,000

CA NISHANT KUMAR 20
Tax Rates in case of Firm/LLP/Local Authority
Particulars Tax Rate
1. Tax Rate 30%
2. Surcharge, if Total Income is above ₹1 crore 12%
3. Health and Education Cess on Tax (including Surcharge) 4%

Tax Rates for Co-operative Society

Particulars Tax Rate
1. Tax Rate
a. Total Income upto 10,000 10%
b. Above 10,000 upto 20,000 20%
c. Above 20,000 30%
2. Surcharge, if Total Income is above ₹1 crore upto ₹10 crores 7%
3. Surcharge, if Total Income is above ₹10 crore 12%
4. Health and Education Cess on Tax (including Surcharge) 4%

Rebate u/s 87A

In case of Resident individual whose total income does not exceed ₹5,00,000, rebate shall be allowed
from Income tax @ 100% of such tax or ₹12,500 whichever is less.

Question 34

Mr. Raghav, a resident individual, aged 26 years has a total income of ₹3,40,000, comprising his salary
income and interest on bank fixed deposit. Compute his tax liability for A.Y. 2023-24.

Solution

Computation of tax liability of Mr. Raghav for the A.Y.2023-24

Particulars ₹
Tax Liability:
First ₹2,50,000 NIL -
Next ₹2,50,001 - ₹3,40,000 5% of ₹90,000 4,500
4,500
Less: Rebate u/s 87A
Less: Lower of:
Less: (i) Tax Amount 4,500
Less: (ii) ₹12,500 12,500 4,500
Net Tax -

Question 35

Mr. Dinesh aged 35 years and a resident in India, has a total income of ₹4,80,000 comprising of long-
term capital gains taxable under section 112. Compute his tax liability for A.Y. 2023-24.

Solution

Computation of tax liability of Mr. Dinesh for the A.Y.2023-24

Particulars ₹
Tax Liability:
First ₹2,50,000 NIL -
Next ₹2,50,001 - ₹4,80,000 20% of ₹2,30,000 46,000
CA NISHANT KUMAR 21
 46,000
Less: Rebate u/s 87A
Less: Lower of:
Less: (i) Tax Amount 46,000
Less: (ii) ₹12,500 12,500 12,500
Tax 33,500
Add: Health and Education Cess @ 4% 1,340
Net Tax Payable 34,840

CA NISHANT KUMAR 22