Mr. Ram, an employee of the Central Government is posted at New Delhi. He joined the service on 1 st February, 2021. Details of his income for the…

Computation of Total Income of Mr. Ram for A.Y. 2024-25 Particulars Amount ₹ Amount ₹ Salaries Basic Salary 3,80,000 Dearness Allowance 1,20,000 Employer contribution to NPS = 20% of 3,80,000 76,000 5,76,000 Less: Standard deduction [₹ 50,000 or - 5,76,000, whichever is lower] 50,000 5,26,000 Profits and gains of business or profession Where the amount gifted by Mr. Ram (6lakh, in this case) is invested by Mrs. Ram in a business as her capital, proportionate share of profit or loss, as the case may be, computed by taking into account the value of the investment as on 1.4.2023 to the total investment in the business (10lakh) would be included in the income of Mr. Ram [loss of 1,30,000 x 6/10] (78,000) Income from other sources All income of the minor son would be included in the income of the parent Mr. Ram, since his income is higher than the income of Mrs. Ram (loss of 52,000, based on the information given in the question). Accordingly,70,000, being amount of gift received by minor son during the P.Y. 2023-24, would be included in the income of Mr. Ram as the amount of gift exceeds - 50,000. 70,000 Less: Exemption in respect of income of minor child included in Mr. Ram's income 1,500 68,500 Less: Business loss of 78,000 set-off to the extent of 68,500 (Balance business loss of 9,500 to be carried forward to the next year, since the same cannot be set-off against salary income) Nil Gross Total Income 5,26,000 Less: Deductions under Chapter VI-A Under section 80C – deposit in Sukanya Samridhi Account 70,000 Under section 80CCC – Contribution to LIC Annuity Plan 40,000 Under section 80CCD(1) – Employee contribution to NPS (₹ 76,000 - 50,000 deduction claimed u/s 80CCD(1B)], since it is lower than - 42,800, being 10% of salary (3,80,000 +48,000) 26,000 Allowable in full, since less than - 1,50,000, being the maximum permissible deduction u/s 80C, 80CCC & 80CCD(1) 1,36,000 Under section 80CCD(1B) – Employee contribution to NPS 50,000 Under section 80CCD(2) – Employer contribution to NPS restricted to 14% of basic salary + DA forming part of pay, since employer is Central Government = 14% x (₹ 3,80,000 +48,000) 59,920 Under section 80E – Interest paid on loan taken for higher education 15,000 2,60,920 Total Income 2,65,080