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

Meera Iyer, a resident individual aged 40, has a total income of ₹13,00,000 for tax year 2026-27, consisting entirely of normal income (salary after standard deduction). She is assessed under the default (new) tax regime. Her total tax liability including 4% cess is:

Her liability is ₹78,000. Slab tax on ₹13,00,000 is ₹75,000. No rebate applies since income exceeds ₹12,00,000, and marginal relief does not apply because the tax is below the ₹1,00,000 excess income. Adding 4% cess of ₹3,000 gives ₹78,000.

  1. A₹78,000Correct
  2. B₹75,000
  3. C₹1,04,000
  4. D₹15,600

Explanation

Slab tax: ₹4L-8L at 5% = ₹20,000; ₹8L-12L at 10% = ₹40,000; ₹12L-13L at 15% = ₹15,000; total ₹75,000. The rebate is unavailable as income exceeds ₹12,00,000. Marginal relief does not help because tax of ₹75,000 is less than the excess income of ₹1,00,000. Cess 4% = ₹3,000, so the total is ₹78,000. ₹75,000 omits cess.

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