Mr. Karan Verma (Age 32 years) is the Marketing manager in M/s. Pinto Systems Ltd. since 01.10.2021. His income for the Financial Year 2025-26 in…

Computation of total income and net tax liability of Mr. Karan Verma for A.Y. 2026-27 as per the default tax regime under section 115BAC Income from Salary Particulars ₹ Gross Salary 23,50,000 Less: Standard Deduction u/s 16(ia) 75,000 22,75,000 Income from House Property Self-occupied property in Delhi Interest on housing loan [Not allowable as deduction under default tax regime] 2,20,000 Let out property in Country R Euro Rent from house property in Country R 1 8,000 Less: Municipal taxes paid in Country R 800 7,200 Less: Deduction under section 24(a) @30% 2,160 5,040 Euro 5,040 x 90 4,53,600 Profits and Gains of Business or Profession Income from business in Country R [Euro 13,500 x 90] 12,15,000 Capital Gain Short-term capital gain on sale of shares of companies registered in Country R [Euro 6,000 x 90] 5,40,000 Income from Other Sources Dividend from Indian companies 1,90,000 Interest in FDR [To be included in the total income of Mr. Karan since FDRs are made by Mr. Karan] 24,000 2,14,000 Gross Total Income/ Total Income 46,97,600 Tax liability on 46,97,600 Tax on total income [30% of 22,97,600 +3,00,000] 9,89,280 Add: Health and Education cess @4% 39,571 10,28,851 Less: Deduction u/s 91 (See Working Note below) 4,83,683 Net tax liability 5,45,168 Net tax liability (Rounded off) 5,45,170 1 Rental Income has been taken as GAV in the absence of other information relating to fair rent, municipal value etc. Working Note: Calculation of deduction under section 91 Average Rate of tax in Country R is 25% Indian Average Rate of tax = 10,28,851 /46,97,600 × 100 = 21.90% Doubly taxed income pertaining to Country R = Income from house property of 4,53,600 + Income from Business of 12,15,000 + Capital Gain of 5,40,000 = 22,08,600 Deduction u/s 91 = Lower of average rate of tax in Country R and Indian rate of tax x Doubly taxed income = (21.90% x 22,08,600) = 4,83,683