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NISM Certifications · NISM-Series-X-B: Investment Adviser (Level 2) · Concepts in Taxation

Caselet: Ms. Anita Rao, a resident individual aged 40, opts for the old tax regime. Her gross total income is Rs 12,00,000. She invested Rs 1,50,000 in ELSS funds (Section 80C), paid Rs 20,000 as health insurance premium for herself (Section 80D, within the limit) and paid Rs 30,000 of interest on an education loan (Section 80E). Assuming no other deductions, what is her total income?

Her total income is Rs 10,00,000. Under the old regime the deductions are Rs 1,50,000 under Section 80C, Rs 20,000 under 80D and Rs 30,000 under 80E, totalling Rs 2,00,000, which reduces gross total income of Rs 12,00,000 to Rs 10,00,000.

  1. ARs 10,00,000Correct
  2. BRs 9,80,000
  3. CRs 10,50,000
  4. DRs 10,30,000

Explanation

Deductions are 80C Rs 1,50,000 + 80D Rs 20,000 + 80E Rs 30,000 = Rs 2,00,000. Total income = 12,00,000 − 2,00,000 = Rs 10,00,000. Rs 9,80,000 wrongly adds another Rs 20,000, and Rs 10,50,000 omits 80D and 80E partly. Rs 10,30,000 omits the 80E deduction.

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