Details available:
During the financial year Mr Ram Achanta aged 63 years earned salary income of Rs.9,50,000.
He has made investment in following:
- Principal repayment towards loan taken for the construction of house – Rs.50,000, Interest portion Rs.60,000. House is Self occupied.
- Medical Insurance – Rs.50,000 and health check-up Rs.5,000
- Donations made to charitable institutions Rs.5,000 in cash and Rs.15,000 through cheque
Income Tax Login Details for payment of Self-Assessment Tax:
- Username: NPSPR9456A
- Password: Fin@123
Solution:
Computation of taxable income of Mr Ram Achanta:
Computation of Tax Liability
Note:
- Rebate is not applicable because total income under New regime is > 7,00,000 and under old regime is > 5,00,000
- Interest paid on housing loan is subject a maximum limit of Rs. 2,00,000 / –
- Under Section 80G of the Income Tax Act, individuals can claim a tax deduction for donations made to eligible charitable institutions. However, there’s a strict rule for cash donations: only amounts up to Rs. 2,000 are eligible. If an assessee donates more than Rs. 2,000 in cash, the entire cash amount (not just the excess) becomes ineligible for any deduction. To claim deductions for larger donations, the payment must be made through traceable non-cash methods like cheques, bank transfers, or digital payments.
- The percentage of deduction allowed under Section 80G depends on the specific charitable institution. While some donations qualify for a 100% deduction, many common institutions and funds, such as the Prime Minister’s Drought Relief Fund, the Jawaharlal Nehru Memorial Fund, the Indira Gandhi Memorial Trust, and the Rajiv Gandhi Foundation, typically allow a 50% deduction. For these specific funds, there is no upper limit based on the assessee’s income, meaning 50% of the entire eligible donation amount can be deducted from their taxable income.