Mr. Sunil, aged 48 years, a resident Indian has furnished the following particulars for the year ended 31.03.2024: (i) He occupies ground floor of…

Computation of total income of Mr. Sunil for A.Y. 2024-25 under default tax regime under section 115BAC Particulars Particulars Particulars ₹ I Income from house property Let out portion [First floor] Gross Annual Value [Rent received is taken as GAV, in the absence of other information] 2,95,000 Less: Municipal taxes paid by him in the P.Y. 2023-24 pertaining to let out portion [₹ 25,000/2] 12,500 Net Annual Value (NAV) 2,82,500 Less: Deduction u/s 24 (a) 30% of 2,82,500 84,750 (b) Interest on housing loan [₹ 1,50,000/2] 75,000 1,59,750 1,22,750 Self-occupied portion [Ground Floor] Annual Value Nil [No deduction is allowable in respect of municipal taxes paid] Less: Interest on housing loan [Not allowable under section 115BAC] Nil Income from house property 1,22,750 II Profits and gains of business or profession Income from SEZ unit 40,00,000 III Capital Gains Long-term capital gains on sale of land (since held for more than 24 months) Full Value of Consideration [Actual consideration of 15lakhs, since stamp duty value of 16lakhs does not exceed actual consideration by more than 10%] 15,00,000 Less: Indexed Cost of acquisition [₹ 4,00,000 x 348/100] 13,92,000 1,08,000 Cost of acquisition Higher of - Actual cost - 2.80 lakhs +0.12 lakhs = 2.92 lakhs and Fair Market Value (FMV) as on 1.4.2001 = 4.8 lakhs but cannot exceed stamp duty value of 4lakhs. IV Income from Other Sources Interest on savings bank deposits 30,000 Interest on fixed deposits 40,000 70,000 Gross Total Income 43,00,750 Less: Deduction under Chapter VI-A Deduction under section 80JJAA 7,12,800 30% of the employee cost of the new employees employed during the P.Y. 2023-24 for 240 days or more during the P.Y. 2023-24 allowable as deduction [30% of 23,76,000 (12 x 18,000 x 11)] As per section 115BAC, no deduction under section 10AA or under Chapter VI-A is allowable except u/s 80JJAA Total Income 35,87,950 Computation of tax liability of Mr. Sunil under section 115BAC Particulars Particulars ₹ Tax on total income of 35,87,950 Tax on LTCG of 1,08,000@20% 21,600 Tax on remaining total income of 34,79,950 Upto 3,00,000 Nil 3,00,001 - 6,00,000 [@5% of 3lakhs] 15,000 6,00,001 - 9,00,000 [@10% of 3lakhs] 30,000 9,00,001 - 12,00,000 [@15% of 3lakhs] 45,000 12,00,001 - 15,00,000 [@20% of 3lakhs] 60,000 15,00,001 - 34,79,950 [@30% of 19,79,950] 5,93,985 7,43,985 7,65,585 Add: Health and education cess@4% 30,623 Total tax liability 7,96,208 Tax liability (rounded off) 7,96,210 Note - An individual paying tax u/s 115BAC is not liable to alternate minimum tax u/s 115JC. Computation of total income of Mr. Sunil for A.Y. 2024-25 under normal provisions of the Act Particulars Particulars ₹ Gross Total Income as per default tax regime under section 115BAC 43,00,750 Less: Interest on borrowing in respect of self-occupied house property [* 1,50,000/2] 75,000 Gross Total Income as per section 115BAC 42,25,750 Less: Deduction u/s 10AA 12,00,000 [Since the industrial undertaking is established in SEZ, it is entitled to deduction u/s 10AA@100% of export profits, since P.Y.2023-24 being the 5th year of operations] [Profits of the SEZ x Export Turnover received in convertible foreign exchange/Total Turnover] x 100% [* 40 lakhs x 120 lakhs/400 lakhs x 100%] Less: Deduction under Chapter VI-A Deduction under section 80C Repayment of principal amount of housing loan 80,000 Insurance premium paid on life insurance policy of son allowable, even though not dependent on Mr. Sunil 40,000 1,20,000 Deduction under section 80JJAA [As computed above] 7,12,800 Deduction under section 80TTA 10,000 Interest on savings bank account, restricted to 10,000 Total Income as per regular provisions of the Act 21,82,950 Computation of tax liability of Mr. Sunil for A.Y. 2024-25 under the regular provisions of the Act Particulars Particulars ₹ Tax on total income of 21,82,950 Tax on LTCG of 1,08,000@20% 21,600 Tax on remaining total income of 20,74,950 Upto 2,50,000 Nil 2,50,001 - 5,00,000[@5% of 2.50 lakhs] 12,500 5,00,001 - 10,00,000[@20% of 5lakhs] 1,00,000 10,00,001 - 20,74,950[@30% of 10,74,950] 3,22,485 4,34,985 4,56,585 Add: Health and education cess@4% 18,263 Total tax liability 4,74,848 Tax liability (rounded off) 4,74,850 Computation of adjusted total income and AMT of Mr. Sunil for A.Y. 2024-25 Particulars ₹ Computation of adjusted total income Total income as per the normal provisions of the Act 21,82,950 Add: Deduction u/s 10AA 12,00,000 Deduction u/s 80JJAA 7,12,800 Adjusted Total Income 40,95,750 Alternative Minimum [email protected]% 7,57,714 Add: Health and education cess@4% 30,309 AMT liability 7,88,023 AMT liability (rounded off) 7,88,020 Since the regular income-tax payable is less than the alternate minimum tax payable, the adjusted total income shall be deemed to be the total income and tax is leviable @18.5% thereof plus cess@4%. Therefore, liability as per section 115JC is 7,88,020. Since, tax liability as per section 115BAC of 7,96,210 is higher than the tax liability of 7,88,020, being higher of AMT liability and tax liability computed as per normal provisions of the Income-tax Act, 1961, it is beneficial for Mr. Sunil to exercise the option to shift out of the default tax regime under section 115BAC. In such a case, his tax liability would be - 7,88,020 and Mr. Sunil would be eligible to carry forward the AMT credit of 3,13,170 (₹ 7,88,020 -4,74,850).