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Assignment 2

The document calculates Mr. B's taxable income by taking his total income from business earnings, gifts, and lottery winnings totaling Rs. 1,00,00,000 and subtracting his total deductions of Rs. 1,83,000 from life insurance premiums, tuition fees, PPF investment, medical tests, and health insurance premiums to get a taxable income of Rs. 98,17,000. It then calculates his tax liability as Rs. 5,70,000 for the lottery winnings and Rs. 27,55,100 as the total tax.

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24 views1 page

Assignment 2

The document calculates Mr. B's taxable income by taking his total income from business earnings, gifts, and lottery winnings totaling Rs. 1,00,00,000 and subtracting his total deductions of Rs. 1,83,000 from life insurance premiums, tuition fees, PPF investment, medical tests, and health insurance premiums to get a taxable income of Rs. 98,17,000. It then calculates his tax liability as Rs. 5,70,000 for the lottery winnings and Rs. 27,55,100 as the total tax.

Uploaded by

adi
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as DOCX, PDF, TXT or read online on Scribd
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Assignment – 2

Name - Aditya Karokar


To calculate Mr. B’s taxable income, we must consider his total income and
deductions.
His total income will include the following:
 Business Earnings: Rs 75,00,000/-
 Gift form ex-wife: Rs 6,00,000/-
 Lottery Winnings: Rs 19,00,000/-
Therefore, adding them will give Mr. B’s total income, and that will be Rs
1,00,00,000/-
* Income from maturity of life insurance is non-taxable*
His deductions will include the following:
 Life insurance premium: Rs 50,000/-
 Daughter’s tuition fee: Rs 50,000/-
 PPF investment: Rs 80,000/-
But the maximum deductions allowed from the above three is Rs
1,50,000/-
 Medical test: Rs 6,000/-
 Health insurance premium: Rs 27,000/-
Therefore, adding them will give Mr. B’s total deductions, which will be Rs
1,83,000/-
Therefore, total taxable income will be Total Income – Total Deductions
Taxable Income = Rs 1,00,00,000 - Rs 1,83,000 = Rs 98,17,000/-

To calculate tax liability:


Tax on the lottery – 30% = 0.3*19,00,000 = Rs 5,70,000
Tax on income = Rs 1,10,000 (for up to Rs 10,00,000) + Rs 20,75,100 (for rest
of the income)
Therefore, total tax = Rs 27,55,100/-

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