Quiz for the week (08 Jul 2024):
Christopher
retired from employment on 31st March,2024. In FY 2024-25, he would
get monthly pension of Rs.60,000 and interest on deposits (both savings made
before retirement and out of retirement benefits) Rs. 1 lakh per month. He was
occupying his own house for which he paid Rs.50,000 per month which consisted
of interest Rs.3,60,000 and balance towards principal. Assume the same to be
the case for FY 2024-25. He let out the house from 1st June,2024
for monthly rent of Rs.40,000 and shifted to native place where he has one ancestral
property. Assume his salary income was 10 lakhs for FY 2023-24 as per normal provisions
(not under sec 115BAC).
He
seeks your advice whether to opt for default regime or not for asst. years
2024-25 and 2025-26.
Best Answer :
The assessee
Christopher wants to know whether to avail section 115BAC for assessment years
2024-25 and 2025-26. For this purpose, let us compute the income for the
assessment year 2024-25 as per the normal provisions and default regime i.e.
section 115BAC.
|
Particulars
|
Normal provisions
|
Default regime
(Section 115BAC)
|
|
Salary income
|
10,00,000
|
10,00,000
|
|
Less: Standard
deduction assumed as not deducted
|
50,000
|
50,000
|
|
|
9,50,000
|
9,50,000
|
|
House property:
Self occupied
|
Nil
|
Nil
|
|
Interest on
moneys borrowed Rs.3,60,000
|
|
|
|
Deduction
limited to
|
2,00,000
|
No deduction
|
|
Eligible for
carry forward
|
1,60,000
|
0
|
|
Gross total
income
|
7,50,000
|
9,50,000
|
|
Deduction under
Chapter VI-A:
|
|
|
|
Section 80C
Housing loan principal
|
1,50,000
|
No deduction
|
|
Total Income
|
6,00,000
|
9,50,000
|
|
Tax thereon
|
32,500
|
52,500
|
|
Add: HEC @ 4%
|
1,300
|
2,100
|
|
Tax liability
|
33,800
|
54,600
|
|
Conclusion: It is
advantageous to file ITR as per normal provision and not under default regime
i.e. section 115BAC.
|
Computation of total income for assessment year 2025-26
|
Particulars
|
Normal provisions
|
Default regime
(Section 115BAC)
|
|
Income from
salary: Pension
|
7,20,000
|
7,20,000
|
|
Less: Standard
deduction
|
50,000
|
50,000
|
|
Income from
salary (A)
|
6,70,000
|
6,70,000
|
|
|
|
|
|
House property:
Let out
|
Nil
|
Nil
|
|
Rent @ Rs.40,000
per month for 10 months
|
4,00,000
|
4,00,000
|
|
Less: Deduction
under section 24 @ 30%
|
1,20,000
|
1,20,000
|
|
|
2,80,000
|
2,80,000
|
|
Less:
|
|
|
|
Interest on
moneys borrowed Rs.3,60,000
|
|
|
|
Deduction
limited to
|
3,60,000
|
2,80,000
|
|
Eligible for
carry forward - current
|
Nil
|
0
|
|
Eligible for
carry forward AY 2024-25
|
Nil
|
0
|
|
Income from
house property (B)
|
(80,000)
|
Nil
|
|
Income from
other sources:
|
|
|
|
Interest income
(C)
|
12,00,000
|
12,00,000
|
|
Gross total
income (A)+(C) (B)
|
17,90,000
|
18,70,000
|
|
Deduction under
Chapter VI-A:
|
|
|
|
Section 80C
Housing loan principal
|
1,50,000
|
No deduction
|
|
Total Income
|
16,40,000
|
18,70,000
|
|
Tax thereon
|
3,02,000
|
2,61,000
|
|
Add: HEC @ 4%
|
12,080
|
10,440
|
|
Tax liability
|
3,14,080
|
2,71,440
|
|
Conclusion: It is
advantageous to file ITR as per default provision and not under normal
provisions (old regime)
|
|