Mr. Ayush, a resident individual, aged 54 years, is engaged in the business of manufacturing textiles. He earned profit of 82,45,000 as per profit…

Computation of total income of Mr. Ayush for A.Y. 2024-25 under the regular provisions of the Act Particulars Particulars ₹ I Income from business or profession Net profit as per profit and loss account 82,45,000 Add: Items of expenditure not allowable while computing business income (i) Interest on loan taken for purchase of plant & machinery [Interest from the date on which capital was borrowed till the date on which asset was first put to use, not allowable as deduction under section 36(1)(iii). Accordingly, interest of 1,75,000 [₹ 50,00,000 x 10.5% x 4/12] has to be added back, since the same is debited to the profit and loss account] 1,75,000 (ii) Purchase of goods at a price higher than the fair market value [The difference between the purchase price (40lakhs) and the fair market value (35lakhs) has to be added back as per section 40A(2) since the purchase is from a related party, i.e., his brother and at a price higher than the fair market value] 5,00,000 6,75,000 89,20,000 Less: Items of income to be treated separately under the respective head of income (i) Income-tax refund including interest on refund of 4,550 15,550 (ii) Dividend from Indian companies 15,00,000 (iii) Short term capital gains on transfer of listed equity shares 10,00,000 25,15,550 64,04,450 Less: Depreciation on interest on loan capitalised to plant and machinery 1,75,000, being the amount of interest on loan taken for purchase of plant and machinery from the date on which capital was borrowed till the date on which asset was first put to use, shall be capitalized Normal depreciation @15% x 50% on such interest 13,125 Additional depreciation @20% x 50% on such interest [Since plant & machinery was put to use for less than 180 days in P.Y. 2023-24, it is eligible for 50% of the rate of depreciation] 17,500 30,625 63,73,825 II Capital Gains Short term capital gains on transfer of listed equity shares 10,00,000 III Income from Other Sources Interest on income-tax refund 4,550 Dividend from Indian companies 15,00,000 Gross Total Income 88,78,375 Less: Deductions under Chapter VI-A Deduction under section 80C Life insurance premium for married daughter [Allowable as deduction though she is not dependent, since child of an individual whether dependent or not falls within the meaning of term "Person". Accordingly, whole of the amount of 40,000 is allowable as it does not exceed 10% of the - 5,00,000, being the sum assured] 40,000 Deduction under section 80D Health insurance premium for self, spouse and children [Allowable as deduction, since it is paid otherwise than by way of cash. However, it is to be restricted to 25,000 25,000 Total Income 88,13,375 Total Income (Rounded off) 88,13,380 Computation of tax payable by Mr. Ayush for A.Y. 2024-25 under the regular provisions of the Act Particulars ₹ Tax on total income of 88,13,380 Tax on short term capital gains on transfer of listed equity shares @15% u/s 111A [₹ 10,00,000 x 15%] 1,50,000 Tax on other Income of 78,13,380 Upto 2,50,000 Nil 2,50,001 - 5,00,000 [@5% of 2.50 lakh] 12,500 5,00,001 - 10,00,000 [@20% of 5,00,000] 1,00,000 10,00,001-78,13,380 [@30% of 68,13,380] 20,44,014 21,56,514 23,06,514 Add: Surcharge @10%, since total income exceeds - 50,00,000 but does not exceed 1crore 2,30,651 25,37,165 Add: Health and education cess@4% 1,01,487 Total tax liability 26,38,652 Less: TDS u/s 194N @ 2% on 50 lakhs, being the cash withdrawals exceeding 1crore 1,00,000 Less: Advance tax paid 17,50,000 18,50,000 Tax payable 7,88,652 Tax payable (rounded off) 7,88,650