CS Executive · Tax Laws and Practice · Deductions

For the purposes of the rent deduction in section 134 of the Income-tax Act, 2025, how is 'total income' used for the 10% and 25% computations measured?

Total income is taken before allowing the rent deduction under that section. Section 134(5) says the 10% and 25% figures are computed on the assessee's total income before the deduction for rent expenditure, so there is no circular calculation and prior-year income is irrelevant.

1. ATotal income after allowing the rent deduction itself
2. BGross total income after deduction of all Chapter-type deductions
3. CTotal income of the assessee before allowing the deduction for expenditure under that sectionCorrect
4. DTotal income of the previous tax year