Skip to content

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

Mr. Harshad Mehta, a resident individual, has a net total income of ₹50,10,000 for tax year 2026-27, entirely normal income, taxed under the default new regime. Tax at ₹24,00,000 is ₹3,00,000 and income above ₹24,00,000 is taxed at 30%. Surcharge is 10% where income exceeds ₹50 lakh (up to ₹1 crore), subject to marginal relief, and cess is 4%. Tax plus surcharge on exactly ₹50,00,000 is ₹10,80,000. What is his total tax liability?

His liability is ₹11,33,600. Tax plus surcharge of ₹11,91,300 is restricted by marginal relief to ₹10,90,000, which is the tax on ₹50 lakh plus the ₹10,000 of excess income. Adding 4% cess of ₹43,600 gives the final amount.

  1. A₹12,38,952
  2. B₹11,26,320
  3. C₹11,91,300
  4. D₹11,33,600Correct

Explanation

Tax on ₹50,10,000 = ₹3,00,000 + 30% of ₹26,10,000 (₹7,83,000) = ₹10,83,000. Surcharge at 10% = ₹1,08,300, so tax plus surcharge is ₹11,91,300. Marginal relief caps this at ₹10,80,000 + ₹10,000 excess income = ₹10,90,000. Cess at 4% is ₹43,600, so the total is ₹11,33,600. ₹11,91,300 is the figure before relief and cess.

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