Skip to content

CA Intermediate · Taxation · Deductions from Gross Total Income

Sandeep, a salaried-free consultant working in Pune, receives no house rent allowance and owns no residential house at Pune or anywhere else. He pays rent of ₹7,000 per month for the whole of tax year 2026-27 and opts for the old regime. His adjusted total income (gross total income less specified items) is ₹6,00,000, and he has filed the required declaration. What deduction for rent paid is allowed to him?

The deduction is ₹24,000. For a person who gets no house rent allowance, the deduction is the least of ₹5,000 a month, 25% of adjusted total income, and rent paid minus 10% of adjusted total income. These work out to ₹60,000, ₹1,50,000 and ₹24,000, so the least is ₹24,000.

  1. A₹24,000Correct
  2. B₹60,000
  3. C₹84,000
  4. D₹1,50,000

Explanation

The deduction is the least of three amounts. (a) ₹5,000 per month x 12 = ₹60,000. (b) 25% of adjusted total income = ₹1,50,000. (c) Rent paid less 10% of adjusted total income = 84,000 - 60,000 = ₹24,000. The least is ₹24,000. ₹60,000 is wrong because it applies only the monthly cap and ignores the 10% test. ₹84,000 is wrong because the full rent is not allowed.

Did you get it right without looking?

One question tells you little. A timed set on Deductions from Gross Total Income shows your real accuracy, how long you take and where you lose marks.

Practise Deductions from Gross Total IncomeFree diagnostic mock

More Deductions from Gross Total Income questions