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

Caselet: Ms. Kavita Rao, aged 35, is a resident individual who opted for the old regime. Her gross salary is Rs 12,00,000. She claims a standard deduction of Rs 50,000, deduction under Section 80C of Rs 1,50,000 and Section 80D of Rs 25,000. Assume no other income or deduction. What is her total taxable income?

Taxable income is Rs 9,75,000. Gross salary of Rs 12,00,000 less standard deduction of Rs 50,000 gives Rs 11,50,000, and deducting Rs 1,50,000 under 80C and Rs 25,000 under 80D leaves Rs 9,75,000.

  1. ARs 9,75,000Correct
  2. BRs 10,00,000
  3. CRs 10,25,000
  4. DRs 9,50,000

Explanation

Income from salary = 12,00,000 - 50,000 = 11,50,000. Chapter VI-A deductions = 1,50,000 + 25,000 = 1,75,000. Taxable income = 11,50,000 - 1,75,000 = 9,75,000. Rs 10,00,000 omits the 80D deduction, while Rs 9,50,000 omits the standard deduction while still including a further deduction mistakenly.

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