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

Ms. Kavita Rao, aged 35, a resident, has a gross total income of Rs 9,00,000 for a year, consisting of salary and interest. She invests Rs 1,50,000 in eligible Section 80C instruments and pays a health insurance premium qualifying for Rs 25,000 under Section 80D. Assuming the old tax regime and no other deductions, her total income is:

Total income is Rs 7,25,000. Under the old regime, Chapter VI-A deductions of Rs 1,50,000 under Section 80C and Rs 25,000 under Section 80D total Rs 1,75,000, which is subtracted from the gross total income of Rs 9,00,000.

  1. ARs 7,50,000
  2. BRs 7,25,000Correct
  3. CRs 6,25,000
  4. DRs 9,00,000

Explanation

Total income = gross total income minus Chapter VI-A deductions. Deductions = 1,50,000 + 25,000 = 1,75,000. So 9,00,000 - 1,75,000 = 7,25,000. Rs 7,50,000 deducts only 80C and misses 80D.

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