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NISM Certifications · NISM-Series-X-B: Investment Adviser (Level 2) · Concepts in Taxation

Mr. Raghav Menon, a resident individual aged 45, opts for the old tax regime. His gross total income for the year is Rs 9,20,000, and he has eligible Chapter VI-A deductions of Rs 1,50,000 under section 80C and Rs 25,000 under section 80D. Ignoring rebate, surcharge, cess and the standard deduction, what is his total income on which tax slabs are applied?

His total income is Rs 7,45,000. Total income is gross total income minus Chapter VI-A deductions, so Rs 9,20,000 less Rs 1,50,000 under 80C and Rs 25,000 under 80D gives Rs 7,45,000, and tax slabs apply to this figure.

  1. ARs 7,45,000Correct
  2. BRs 7,70,000
  3. CRs 9,20,000
  4. DRs 6,95,000

Explanation

Total income equals gross total income less Chapter VI-A deductions. Deductions = 1,50,000 + 25,000 = 1,75,000. Total income = 9,20,000 - 1,75,000 = 7,45,000. Rs 7,70,000 deducts only 80C and ignores 80D. Rs 9,20,000 ignores deductions altogether. Rs 6,95,000 deducts 2,25,000, which is not supported by the data.

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