Prepare the proforma statement of income of the assessee pertaining to his heads of income from salary, house property and long term capital gains on sale of residential house by correctly applying the follwing sections. Sections 16, 10(3), 10(14), 80 G, 24, 30% statutory deduction 45 (la), 48, 54 deduction under chapter VIA-80c 80ccc Etc. TDS and calculate the tax liability.
1. Whether assessee is liable tax under above provisions? YES
2. Whether assessee is eligible for deductions under Act? YES
Section 16 (ii)
This problem is related to the Statement of income of the assessee under varous heads. Income from salaries: Salary consists of Basic, Dearness Allowance, HRA, Conveyance, Entertainment Allowance, Medical Allowance Etc.
Deducations under Section 16 (ii):
In Csse of Government Employees Entertainment Allowance
(i) up to Rs. 5000/- or
(ii) 1/5th of the salary (exvlusive of any allowance, benefit, perquisite Etc. or
(iii) actual amount incurred, whichever is lower. 16(iii) Professional Tax (Tax on Employment) within the meaning of Article 276 (2) of the Constitution of India
This deduction is available against Income from House property.
i. Standard Deduction @30% is allowable on the annual net value of Rent or Annual value of the property which is deemed to be let out form income tax purposes (when the assessee own more than one house property)
ii. Interest on home Loan for the purchase, construction, repair, renewal or reconstruction of the house, up to an amount of Rs. 2,00,000/- per annum or actual amount of interest accrued due actually paid or not.
Section 45(1a) If any amount or any other asset is received by any person during the previous year from the Insurance Company under the contract of the Insurance as a result of damage or destruction of any Capital Assets.
In the instant problem, after computation of Head wise income and applying the above deductions the taxable income will be arrived. Income tax on the same will be calculated. Then, Tax Deducted at Source (if any) will be deducted from the Income Tax so computed. Then interest will be calculated under Sections 234B and 234C if applicable.
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