Compute the total income and net tax liability of Mr. Nitin, an individual resident in India, aged 25 years for the Assessment Year 2024-25 from the…

Computation of total income of Mr. Nitin for A.Y.2024-25 Particulars Particulars ₹ Income from House Property Rental income from property in Country X 3 3,60,000 Less: Municipal taxes paid 12,000 3,48,000 Less: Deduction u/s 24(a) @30% 1,04,400 2,43,600 Profits and gains from business or profession Royalty 4 from Country X for writing article in journals [only the amount which is received during the previous year is includible, since he maintains cash system of accounting] 13,60,000 Income from Other Sources Dividend from M Ltd. an Indian company 5,50,000 Gross Total Income 21,53,600 Less: Deduction under Chapter VI-A U/s 80E – deduction in respect of interest on educational loan for his son 36,000 U/s 80QQB – No deduction is allowable since royalty income is for writing articles in journals and newspapers and not for writing books - 36,000 Total Income 21,17,600 Computation of net tax liability of Mr. Nitin for A.Y.2024-25 Particulars ₹ Tax on total income [30% of 11,17,600 +1,12,500] 4,47,780 Add: Health and education cess @4% 17,911 4,65,691 Less: Relief under section 91 - Average rate of tax in India [[i.e.,4,65,691/21,17,600 x 100] 21.991% Average rate of tax in Country X 15% Doubly Taxed income [Rental income of 2,43,600 + royalty income of 13,60,000] 16,03,600 Deduction under section 91 on 16,03,600 @15%, being lower average Indian tax rate and foreign tax rate. 2,40,540 Net tax liability 2,25,151 Net tax liability (rounded off) 2,25,150 3 In the absence of any information relating to fair rent, municipal value and standard rent, rental income assumed to be gross annual value. 4 Royalty can also be shown under the head "Income from other sources” instead of "Profits and gains from business or profession.