Ms. Ritika aged 30 years, a resident individual, started a business of printing mobile skins and covers in India and abroad. She frequently visits…

Computation of total income and net tax liability of Ms. Ritika for A.Y. 2025-26 as per the default tax regime under section 115BAC Particulars Particulars ₹ Income from House Property Rent Received in Country Z [₹ 65,000 × 12] 7,80,000 Less: Deduction under section 24(a) @30% 2,34,000 5,46,000 Profit and Gains of Business or Profession Sales in India 12,45,50,780 Less: Expenses 10,20,00,000 2,25,50,780 Sales in Country Z 15,50,000 Less: Expenses 9,00,000 6,50,000 Gross Total Income 2,37,46,780 Less: Deduction u/s 80JJAA is permissible even if paying tax under default tax regime [(₹ 23,300 x 18 x 11) + (₹ 24,500 x 22 x 10)] x 30% [15 employees employed for a period of less than 240 days during the P.Y. 2024-25 not considered as additional employee for deduction u/s 80JJAA for the said previous year] 30,01,020 Total Income 2,07,45,760 Tax on Total Income [1,40,000 + 1,92,45,760 x 30%] 59,13,728 Add: Surcharge @25% since total income exceed 2crores 14,78,432 73,92,160 Less: Marginal Relief (Refer Working Note 1 Below) 1,02,900 72,89,260 Add: Health and Education Cess @4% 2,91,570 75,80,830 Less: Deduction u/s 91 (Refer Working Note 2 below) 2,99,000 Net Tax Liability 72,81,830 Working Notes 1. Computation of Marginal Relief Particulars Amount (₹) (A) Tax on total income - 2,07,45,760 plus surcharge @25% 73,92,160 (B) Tax computed on total income of 2crore plus surcharge @15% 65,43,500 (C) Total Income - 2,07,45,760 -2,00,00,000 7,45,760 (D) Income-tax computed on total income of 2crores plus excess of total income over 2crores 72,89,260 Marginal relief (A) – (D) 1,02,900 Alternative Method (A) Tax on total income - 2,07,45,760 plus surcharge @25% 73,92,160 (B) Tax computed on total income of 2crore plus surcharge @15% 65,43,500 (C) Excess Tax payable (A) – (B) 8,48,660 Marginal Relief [8,48,660 -7,45,760, being the amount of income in excess of 2crores] 1,02,900 2. Computation of Relief u/s 91 Particulars Amount (₹) Average rate of tax in India (₹ 75,80,830/2,07,45,760) x 100 36.54% Average rate of Tax in Country Z 25% Doubly Taxed Income pertaining to Country Z 5,46,000 +6,50,000 = 11,96,000 11,96,000 Deduction u/s 91 = Lower of average rate of tax in India and Country Z x Double Taxed Income = [25% x 11,96,000] 2,99,000