Answer :
To solve this question regarding Dr. C.B. Chatterjee’s total income and tax liability under the new scheme of taxation in India, we need to follow several steps:
Income from Profession
- Consultation fees: ₹ 12,46,000
- Surgical fees: ₹ 15,77,000
- Gifts from patients: ₹ 2,10,000
- Total Professional Income: ₹ 30,33,000 (sum of all the above)
Expenses Deductible from Professional Income
Rent of chamber: ₹ 3,00,000
Electricity: ₹ 60,000
Motor car expenses: ₹ 1,12,500
Salary of employees: ₹ 3,20,000
Other office expenses: ₹ 72,600
Total Deductible Expenses: ₹ 8,65,100
Net Income from Profession: ₹ 30,33,000 - ₹ 8,65,100 = ₹ 21,67,900
Other Sources of Income
- Interest from bank savings account: ₹ 13,700
- Interest from bank fixed deposits: ₹ 3,37,300
- Interest (accrued from NSC): ₹ 1,12,000
- Dividend from Indian companies: ₹ 2,37,000
- Dividend from a foreign company: ₹ 1,18,000
- Rent from a house: ₹ 6,00,000 (less repairing: ₹ 71,500, local taxes: ₹ 50,000)
- Net Rent Income: ₹ 6,00,000 - (₹ 71,500 + ₹ 50,000) = ₹ 4,78,500
Capital Gains Income
- Sale of shares (equity):
- Purchase cost: ₹ 1,80,000
- Sale proceeds: ₹ 3,20,000
- Short-term Capital Gain: ₹ 3,20,000 - ₹ 1,80,000 = ₹ 1,40,000 (Since the period of holding is short-term)
- Sale of furniture: While this amount appears capital in nature, personal effects typically are not considered capital assets in India, so no gain applies.
- Sale of shares (equity):
Calculation of Total Income
Net Income from Profession: ₹ 21,67,900
Other Income:
- Interest Income: ₹ 13,700 + ₹ 3,37,300 + ₹ 1,12,000 = ₹ 4,63,000
- Dividend Income: ₹ 2,37,000 + ₹ 1,18,000 = ₹ 3,55,000
- Net Rent Income: ₹ 4,78,500
- Short-term Capital Gain: ₹ 1,40,000
Gross Total Income: ₹ 21,67,900 + ₹ 4,63,000 + ₹ 3,55,000 + ₹ 4,78,500 + ₹ 1,40,000 = ₹ 36,04,400
Deductions under Chapter VIA
- Medical insurance under section 80D:
- Own and family: ₹ 22,700 + ₹ 13,200 = ₹ 35,900 (limited to ₹ 25,000 for self and family)
- Father (above 60 years): ₹ 27,300 (additional deduction for senior citizens allowed)
- Total deduction for 80D: ₹ 25,000 + ₹ 27,300 = ₹ 52,300
- Medical expenses for mother (aged 68 years) can be claimed for deduction under section 80DDB (subject to limits)
- Interest income from minor son is clubbed in father's income (as it's considered income of the parent)
- Donations:
- Jawaharlal Nehru Memorial Fund: 100% deduction available under section 80G
- ₹ 15,000 is eligible for deduction
- Local club: Not eligible for deduction
- Jawaharlal Nehru Memorial Fund: 100% deduction available under section 80G
- Medical insurance under section 80D:
Net Taxable Income
- Gross Total Income: ₹ 36,04,400
- Less Total Deductions under 80D and 80G (as calculated and applicable)
Tax Calculation
- Tax rates under the new tax regime have various slabs and rates as specified by the income tax regulations in India, computed without considering common deductions available in the older regime.
Calculating tax liability requires applying appropriate slab rates to the taxable income determined after deductions are taken into account. Note that under the new regime, common deductions such as HRA, Section 80C, and others are not available except a few as specified.
This step-by-step procedure identifies the components required to compute the total income and then the tax liability using the stated rules. For precise computation, it would be contingent on the current and prevailing tax slab rates for the financial year in question and specific guidelines of the new tax regime.
