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CA Intermediate · Taxation · Deductions from Gross Total Income

Ms Tanvi Joshi, a resident individual under the regime allowing deductions, has gross total income of ₹6,20,000 for tax year 2026-27, with no special-rate income. She claims a deduction of ₹1,00,000 for eligible savings and investments. She made these donations: (i) ₹30,000 by cheque to the Prime Minister's National Relief Fund (100% deduction without limit); (ii) ₹1,20,000 by cheque to an approved charitable trust (50% deduction subject to the qualifying limit of 10% of adjusted gross total income); (iii) ₹10,000 in cash to another approved trust (50% category). What is her total deduction for donations?

The total donation deduction is ₹56,000. Adjusted gross total income is ₹5,20,000, so the qualifying limit is ₹52,000, and 50% of it gives ₹26,000. Adding the unrestricted ₹30,000 for the PM relief fund gives ₹56,000. The cash donation above ₹2,000 is ignored.

  1. A₹56,000Correct
  2. B₹61,000
  3. C₹90,000
  4. D₹95,000

Explanation

Adjusted gross total income = 6,20,000 − 1,00,000 = ₹5,20,000, so the qualifying limit is ₹52,000. The cash donation of ₹10,000 exceeds ₹2,000 and is ineligible. The trust donation of ₹1,20,000 is restricted to ₹52,000 and then allowed at 50%, giving ₹26,000. Adding ₹30,000 for the PM relief fund gives ₹56,000. ₹61,000 arises from wrongly using ₹6,20,000 as the base (₹31,000 + ₹30,000).

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