Mr. Navyam, a resident individual, aged 39 years, gives you the following particulars about his income for the previous year 2025-26: (i) Profit…

Computation of Gross Total Income of Mr. Navyam for the A.Y. 2026-27 as per the default tax regime under the Income-tax Act, 1961 Particulars ₹ ₹ Income from House Property Rental income (computed) 2,52,000 Less: Loss from self-occupied house property [Interest deduction u/s 24(b) is not allowed in case of self-occupied property under default tax regime, hence, there cannot be loss from self-occupied property] — 2,52,000 Less: Set-off of brought forward loss from let out house property of A.Y. 2024-25 is allowed even if belated income-tax return was filed, since 8 years period not yet lapsed 1,60,000 92,000 Profit and gains of business or profession Profit from chemical dealership business 2,73,000 Profit from a business specified u/s 35AD 6,50,000 9,23,000 Less: Set-off of brought forward loss from happy stay business of A.Y. 2023-24 is allowed since 8 years period not yet lapsed 2,10,000 Less: Set-off of brought forward loss from business specified u/s 35AD of A.Y. 2023-24 is not allowed under default tax regime — Less: Unabsorbed depreciation of A.Y. 2023-24 6,80,000 33,000 Note: If it is assumed that the loss from specified business is not attributable to deduction u/s 35AD, then the loss of 4,50,000 of specified business for A.Y. 2023-24 shall be set off against the profit from specified business of 6,50,000. In such case, remaining available profits will be adjusted against unabsorbed depreciation to the extent of 2,63,000. Thereafter, remaining unabsorbed depreciation of 4,17,000 will be adjusted against other income from speculative business, house property and other sources. In such a case, the Gross Total Income would be Nil. Income from speculative business Less: Set-off of loss from speculative business of A.Y. 2020-21 is not allowed since 4 years period have lapsed 1,90,000 Less: Set-off of brought forward loss from speculative business of A.Y. 2022-23 is allowed since 4 years period not yet lapsed 1,60,000 30,000 Income from Other Sources Gross dividend from Indian companies 1,47,000 Award to minor daughter from the dance performance on TV will not be included in the hands of Mr. Navyam, since it is earned from her skill and talent. — 1,47,000 Gross Total Income 3,02,000 Losses to be carried forward to A.Y. 2027-28 and the years upto which such losses can be carried forward Loss from business specified u/s 35AD of A.Y. 2023-24 Carry forward and set off of losses from specified business is not allowed as per default tax regime under section 115BAC. Loss from specified business u/s 35AD of A.Y. 2023-24 shall be deemed to have been given full effect and no further deduction of such loss would be allowed for any subsequent year. Nil [ Note: Alternatively, if it is assumed that the loss from specified business under section 35AD for A.Y. 2023-24 is not on account of deduction under section 35AD, then such loss would also stand fully adjusted against the profit from other specified business and, consequently, the carried forward loss would be Nil. In that case, the remaining unabsorbed depreciation for A.Y. 2023-24 amounting to 1,48,000 (₹ 6,80,000 - 5,32,000) shall be carried forward for an indefinite period.] Loss from betting Loss from betting can neither be set off nor be carried forward. Nil Loss on maintenance of race horses of A.Y. 2026-27 1,20,000 Loss from owning and maintenance of race horses can be set-off against income from income from owning and maintenance of race horses only. Thus, such loss would be carried forward for a maximum of four assessment years i.e., upto A.Y. 2030-31.