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CS Executive · Tax Laws and Practice · Computation of Total Income and Tax Liability of various Entities

Ramesh, an employee of an Indian firm, receives the accumulated balance from a recognised provident fund. Paragraph 8 of Part A of Schedule XI is not applicable to him, so the balance is included in his total income. Which statement correctly reflects section 191 of the Income-tax Act, 2025?

The Assessing Officer calculates the total of the various sums of tax as per paragraph 9. This follows because the balance is included in Ramesh's total income owing to paragraph 8 of Part A of Schedule XI not applying, which attracts section 191.

  1. AThe balance is ignored and no tax is computed
  2. BThe Assessing Officer calculates the total of various sums of tax as per paragraph 9Correct
  3. CThe entire balance is taxed at a flat rate chosen by the employer
  4. DThe tax is computed by the fund trustees and deducted without any assessment

Explanation

Because the balance is included in total income owing to paragraph 8 not applying, section 191 is attracted. The Assessing Officer then calculates the total of the various sums of tax per paragraph 9. Ignoring the balance or employer-chosen rates finds no support in the section.

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