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CMA Intermediate · Direct and Indirect Taxation · Taxation of Individuals (including AMT) and HUF

A resident individual has gross total income of Rs. 3,10,000 for the tax year. The deductions under the Chapter on deductions for which he is otherwise eligible add up to Rs. 3,60,000. What is his total income?

His total income is nil. The aggregate of Chapter deductions cannot exceed gross total income, so only Rs. 3,10,000 of the Rs. 3,60,000 eligible deductions is allowed. The excess Rs. 50,000 lapses and does not create a negative income.

  1. ARs. 50,000
  2. BRs. 3,10,000
  3. CNilCorrect
  4. DNegative Rs. 50,000 carried forward

Explanation

The aggregate of deductions under the Chapter cannot exceed the gross total income of the assessee. Allowed deductions are limited to Rs. 3,10,000, so total income = 3,10,000 − 3,10,000 = nil. A negative figure of Rs. 50,000 is wrong because the excess deduction is not allowed and is not carried forward.

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