Mr. Ayush, a resident individual, aged 62 years, is a qualified medical practitioner. He runs his own clinic. Income & Expenditure A/c of Mr.…

Computation of total income of Mr. Ayush for A.Y. 2026-27 under default tax regime Particulars ₹ ₹ ₹ I Income from Salaries Basic Pay (₹ 85,000 x 12) 10,20,000 Transport Allowance (₹ 5,000 x 12) [Fully taxable] 60,000 Cost of treatment for son in True Care Hospitals (P) Ltd. [Exempt, since value of medical treatment provided to an employee's family member in any hospital maintained by the employer is excluded from the definition of perquisite] Nil Gross Salary 10,80,000 Less: Standard deduction u/s 16 [Actual salary or - 75,000, whichever is less] 75,000 10,05,000 II Income from House Property Let out portion [First floor] Gross Annual Value [Rent received is taken as GAV = 40,000 p.m. x 6 months] 2,40,000 Less: Municipal taxes paid by him in the P.Y.2025-26 pertaining to let out portion [(₹ 5,000 +5,000)/2], allowable since it is paid during the year, even if it relates to earlier years 5,000 Net Annual Value (NAV) 2,35,000 Less: Deduction u/s 24 (a) 30% of 2,35,000 70,500 (b) Interest on housing loan [(₹ 1,20,000 (+) ₹ 1,00,000)/2] 1,10,000 1,80,500 54,500 Self-occupied portion [Ground Floor] Annual Value Nil Less: Deduction u/s 24 Interest on housing loan for reconstruction [Not allowed under default tax regime] Nil Nil 54,500 III Profits and gains of business or profession Net profit as per Income and Expenditure account 55,34,000 Less: Items of income to be treated separately under the respective head of income (i) Salary received from True Care Hospitals (P) Ltd. 10,80,000 (ii) Rent from house property 2,40,000 (iii) Dividend from foreign companies (gross) 60,000 13,80,000 41,54,000 Less: Allowable expenditure Depreciation on Clinic equipmentOn Opening WDV - 5,00,000 @15% 75,000 On additions during the year 75,000, no depreciation is allowable, since payment was made in cash and hence, it will not form part of actual cost. Nil 75,000 40,79,000 Add: Items of expenditure not allowable while computing business income (i) Interest on housing loan for reconstruction of residential house 2,20,000 (ii) Interest on education loan for son 1,56,000 (iii) Amount paid to scientific research association approved & notified under section 35, not allowed under default tax regime 1,50,000 (iii) Conveyance expenses in relation to his employment with True Care Hospitals debited to Income and Expenditure A/c, not allowed 48,000 (iv) Power and fuel expenses incurred for providing power back up to tenant not deductible 10,000 (v) Municipal tax paid relating to residential house included in administrative expenses, not deductible 10,000 5,94,000 46,73,000 IV Income from Other Sources Power back up charges from tenant (3,000 p.m. x 6 months) 18,000 Less: Actual expenditure incurred for providing power back up 10,000 8,000 Dividend from foreign companies 60,000 68,000 Gross Total Income 58,00,500 Less: Deduction under Chapter VI-A Deduction under section 80C [Not allowed under default tax regime] Nil Deduction under section 80E [Not allowed under default tax regime] Nil Nil Total income 58,00,500 Computation of total income of Mr. Ayush for A.Y. 2026-27 under optional tax regime Particulars ₹ Gross Total Income under default tax regime 58,00,500 Add: Difference in standard deduction under section 16 25,000 58,25,500 Less: Interest on housing loan for reconstruction of house [Self occupied portion], restricted to 30,000 Less: Amount paid to scientific research association approved & notified under section 35 1,50,000 Gross Total Income as per optional tax regime 56,45,500 Less: Deduction under Chapter VI-A Deduction under section 80C – Tuition fee paid for grand child is not allowable Nil Deduction under section 80E - Interest on loan taken for higher education of his son is deductible [principal repayment is not deductible] 1,56,000 Total Income as per optional tax regime 54,89,500