Mr. Nikhil, a resident aged 42 years, is employed in an MNC in Gurugram since 2013. He submitted his resignation on 31st July, 2025 for starting his…

Mr. Nikhil, a resident aged 42 years, is employed in an MNC in Gurugram since 2013. He submitted his resignation on 31st July, 2025 for starting his own business and gave a notice period of one month to the employer. He received the following emoluments from his employer for the period from 1st April, 2025 to 31st August, 2025: Basic pay 45,000 p.m. Dearness Allowance (Forming part of retirement benefits) 10% of Basic pay Medical allowance 5,000 p.m. Entertainment allowance 2,500 p.m. Commission 10,000 p.m. Employee's contribution to RPF 7,500 p.m. Employer's contributed the same amount to the RPF Interest accrued in the RPF@13% 14,300 In October, 2025, he started the business of manufacturing of footwear under the brand name "COMFORT". He withdrew the entire amount from his RPF account in September, 2025 to invest in his business. He has employed 75 regular employees on 1.11.2025 at a salary of 23,000 p.m. and they participate in recognized provident fund. For the P.Y. 2025-26, the profits and gains derived from such business is 51 lakhs (computed) and the turnover is 7 crores. Mr. Nikhil received 12% of the sales in cash. On 1st December, 2025, he has purchased a house property for 90 lakhs for self-occupation by taking a loan of 45 lakhs@10% p.a. on the same day. He has paid stamp duty of 6,25,000 on purchase of such house property. Mr. Nikhil is paying tax under default tax regime. Based on the facts of the case scenario given above, choose the most appropriate answer to the following questions: