Topic :- Deductions from Gross Total Income
#Q.1) Examine the following statements with regard to the provisions of the Income Tax Act, 1961:
(i) During the financial year 2018-19, Mr. Amit paid interest on loan availed by him for his son’s higher education. His son is already employed in a firm. Mr. Amit will get the deduction under section 80E.
(ii) Subscription to notified bonds of NABARD would qualify for deduction under section 80C.
(iii) In order to be eligible to claim deduction under section 80C, investment/ contribution/ subscription etc. in eligible or approved modes, should be made from out of income chargeable to tax.
(iv) Where an individual repays a sum of Rs. 30,000 towards principal and Rs. 14,000 as interest in respect of loan taken from a bank for pursuing eligible higher studies, the deduction allowable under section 80E is Rs. 44,000.
(v) Mrs. Sheela, widow of Mr. Satish (who was an employee of M/s. XYZ Ltd.), received Rs. 7 lakhs on 1.5.2018, being amount standing to the credit of Mr. Satish in his NPS Account, in respect of which deduction has been allowed under section 80CCD to Mr. Satish in the earlier previous years. Such amount received by her as a nominee on closure of the account is deemed to be her income for A.Y.2019-20.
#Q.2) Examine the allowability of the following:
(i) Rajan has to pay to a hospital for treatment Rs. 62,000 and spent nothing for life insurance or for maintenance of handicapped dependent.
(ii) Raja, a resident Indian, has spent nothing for treatment in the previous year and deposited Rs. 25,000 with LIC for maintenance of handicapped dependant.
(iii) Rajan has incurred Rs. 20,000 for treatment and Rs. 25,000 was deposited with LIC for maintenance of handicapped dependant.
(iv) Payment of Rs. 50,000 by cheque to an electoral trust by an Indian company.
#Q.3)For the Assessment year 2019-20, the Gross Total Income of Mr. Chaturvedi, a resident in India, was Rs. 8,18,240 which includes long-term capital gain of Rs. 2,45,000 taxable under section 112 and Short-term capital gain of Rs. 58,000.
The Gross Total Income also includes interest income of Rs. 12,000 from savings bank deposits with banks and Rs. 40,000 interest on fixed deposits with banks.
Mr. Chaturvedi has invested in PPF Rs. 1,20,000 and also paid a medical insurance premium Rs. 51,000.
Mr. Chaturvedi also contributed Rs. 50,000 to Public Charitable Trust eligible for deduction under section 80G by way of an account payee cheque.
Compute the total income and tax thereon of Mr. Chaturvedi, who is 70 years old as on 31.3.2019.