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CA Intermediate · Taxation · Income Tax Liability - Computation and Optimisation

Ananya Iyer, a resident individual aged 30, has total income of ₹12,10,000 for tax year 2026-27, all of it normal-rate income, and she is taxed under the default new regime. Considering marginal relief, her total tax liability including 4% cess is:

The liability is ₹10,400. Slab tax would be ₹61,500, but marginal relief caps the tax at the income above ₹12,00,000, which is ₹10,000. Adding 4% cess of ₹400 gives ₹10,400.

  1. A₹10,400Correct
  2. B₹63,960
  3. C₹61,500
  4. D₹10,000

Explanation

Slab tax: ₹20,000 + ₹40,000 + 15% of ₹10,000 (₹1,500) = ₹61,500. Total income exceeds ₹12,00,000, so no rebate, but marginal relief limits tax to the excess over ₹12,00,000, which is ₹10,000. Cess at 4% adds ₹400, giving ₹10,400. ₹10,000 omits cess; ₹63,960 ignores marginal relief.

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