Ms. Farah, aged 40 years, is an advocate (Taxation). She keeps her books of accounts on accrual basis. Her profit & loss account for the year…

Computation of Total Income of Ms. Farah for the A.Y.2024-25 under default tax regime under section 115BAC Particulars Particulars Particulars ₹ Income from house property Gross Annual Value 1 90,000 Less: Municipal taxes paid 9,000 Net Annual Value (NAV) 81,000 Less: Deduction under section 24(a) - 30% of NAV = 30% of 81,000 24,300 56,700 Profits and gains of business or profession Net profit as per Profit and loss account 25,91,000 Add: Expenses debited but not allowable (i) Purchase of car [Amount paid for purchase of car is not allowable since it is a capital expenditure] 3,00,000 (ii) Municipal tax paid in respect of house property [allowable as deduction under the head "Income from house property"] 9,000 (iii) Payment made to tax consultant in cash [disallowed under section 40A(3), since such cash payment exceeds - 10,000] 50,000 (iv) Travel expenditure on foreign professional tour [Since it is incurred in connection with professional work, the same is allowable as deduction. As it has already been debited to profit and loss account, no further adjustment is required] - (v) Repair and maintenance of car [Repairs and maintenance paid in advance for the period 1.4.2024 to 30.9.2024 i.e. for 6 months amounting to 17,500 is not allowable as deduction, since Ms. Farah is following the accrual system of accounting] 17,500 3,76,500 29,67,500 Less: Income credited but not taxable under this head: (i) Dividend from an Indian company (taxable under the head “Income from Other Sources") 11,00,000 (ii) Interest on deposit certificates issued under gold monetization scheme, 2015 (taxability or otherwise to be considered under the head "Income from Other Sources") 25,000 (iii) Honorarium for valuation of answer papers 50,000 (iv) Rent received in respect of house property 90,000 12,65,000 17,02,500 Less: Depreciation on car @15% 45,000 16,57,500 Income from Other Sources Dividend from an Indian company 11,00,000 Interest on deposit certificates issued under gold monetization scheme, 2015 [Exempt under section 10(15)] - Honorarium for valuation of answer papers 50,000 11,50,000 Gross Total Income 28,64,200 Less: Deduction under Chapter VI-A [Deduction under section 80D would not be allowable] - Total Income 28,64,200 1 Rent received has been taken as the Gross Annual Value in the absence of other information relating to Municipal Value, Fair Rent and Standard Rent. Computation of tax payable under default tax regime under section 115BAC Particulars ₹ Tax on total income of 28,64,200 Upto 3,00,000 Nil 3,00,001 - 6,00,000 [i.e.,3,00,000@5%] 15,000 6,00,001 - 9,00,000 [i.e.,3,00,000@10%] 30,000 9,00,001 - 12,00,000 [i.e.,3,00,000@15%] 45,000 12,00,001 - 15,00,000 [i.e.,3,00,000@20%] 60,000 15,00,001 - 28,64,200 [i.e.,13,64,200 @30%] 4,09,260 5,59,260 Add: Health and Education cess@4% 22,370 Tax Liability 5,81,630 Less: Advance Tax paid 1,00,000 Less: Tax deducted at source on dividend income from an Indian company under section 194 [₹ 11,00,000 x 10%] 1,10,000 Tax payable 3,71,630 Computation of total income and tax payable by Ms. Farah for the A.Y.2024-25 under regular provisions of the Act Particulars ₹ Gross Total Income 28,64,200 [Income under the “Income from house property” “Profits and gains from business or profession” and “Income from other sources" would remain the same under regular provisions of the Act] Less: Deductions under Chapter VI-A Section 80D Medical insurance premium paid online for parents, being senior citizens 47,000 Payment made in cash of 8,500 for preventive health check-up for self and spouse restricted to 5,000 52,000 Total Income 28,12,200 Tax on total income of 28,12,200 Upto 2,50,000 Nil 2,50,001 - 5,00,000 [i.e.,2,50,000@5%] 12,500 5,00,001 - 10,00,000 [i.e.,5,00,000@20%] 1,00,000 10,00,001 - 28,12,200 [i.e.,18,12,200 @30%] 5,43,660 6,56,160 Add: Health and Education cess@4% 26,246 Tax Liability 6,82,406 Less: Advance Tax paid 1,00,000 Less: Tax deducted at source on dividend income from an Indian company under section 194 [₹ 11,00,000 x 10%] 1,10,000 Tax payable 4,72,406 Tax payable (Rounded off) 4,72,410 Note – Since the tax payable under default tax regime under section 115BAC is lower than the tax payable under the regular provisions of the Act, it would be beneficial for Ms. Farah to pay tax under default tax regime under section 115BAC for A.Y. 2024-25.