Skip to content

CMA Intermediate · Direct and Indirect Taxation · Taxation of Individuals (including AMT) and HUF

Meera, a resident individual under the new tax regime (section 202(1) rates), has gross salary of Rs 12,75,000 and no other income. A standard deduction of Rs 75,000 is allowed from salary. What is her tax liability, including 4% health and education cess?

Her tax liability is nil. Total income after the Rs 75,000 standard deduction is Rs 12,00,000. Slab tax is Rs 60,000, and section 156(2)(a) gives a rebate of the lower of the tax or Rs 60,000, which wipes out the tax and the cess on it.

  1. ANilCorrect
  2. BRs 60,000
  3. CRs 62,400
  4. DRs 65,000

Explanation

Total income = 12,75,000 - 75,000 = Rs 12,00,000. Tax on slabs = 0 on first 4 lakh + 5% of 4 lakh (20,000) + 10% of 4 lakh (40,000) = Rs 60,000. Under section 156(2)(a), where income does not exceed Rs 12 lakh, rebate is 100% of tax or Rs 60,000, whichever is less, so rebate = 60,000 and tax is nil. Rs 60,000 ignores the rebate.

Did you get it right without looking?

One question tells you little. A timed set on Taxation of Individuals (including AMT) and HUF shows your real accuracy, how long you take and where you lose marks.

Practise Taxation of Individuals (including AMT) and HUFFree diagnostic mock

More Taxation of Individuals (including AMT) and HUF questions