Skip to content

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

Kabir Shah, a resident individual under the default tax regime, has a total income of ₹12,10,000 for tax year 2026-27, consisting wholly of normal income. What is his tax liability including 4% health and education cess?

Tax is ₹10,400. Slab tax of ₹61,500 is reduced by marginal relief so that tax does not exceed the income above ₹12,00,000, which is ₹10,000. Adding 4% cess of ₹400 gives ₹10,400.

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

Explanation

Slab tax: 5% on 4-8L = ₹20,000; 10% on 8-12L = ₹40,000; 15% on ₹10,000 = ₹1,500; total ₹61,500. The rebate is unavailable as income exceeds ₹12L, but marginal relief limits tax to the excess income of ₹10,000. Cess at 4% is ₹400, giving ₹10,400. ₹63,960 ignores marginal relief.

Did you get it right without looking?

One question tells you little. A timed set on Income Tax Liability - Computation and Optimisation shows your real accuracy, how long you take and where you lose marks.

Practise Income Tax Liability - Computation and OptimisationFree diagnostic mock

More Income Tax Liability - Computation and Optimisation questions