7,500 Tax Liability : Total income = * 3,27,640 Tax on short term capital gain = 50,000 x 15% = Tax on balance income = 3,27,640 - 50,000 = 2,77,640 On first 2,50,000 On balance 27,640 @ 10% NIL 2,764 Tax Less rebate u/s 87A 10.264 2,000 8,264 Add : Education cess @ 2% on tax Secondary & Higher education cess @ 1% 165 83 248 8,512 ZIG Tax payable rounded off 8,510. ILLUSTRATION 3 The following particulars are given by M.D. Mathur, Madras, in respect of his annual income for the year ended 31st March 2015 : (i) Consolidated salary till 30-9-2014 at 13,500 p.m. and from 1-10-2014 14,000 p.m. (ii) House rent allowance at 20% of salary. (iii) Actual house rent paid 3,500 p.m. (iv) Contribution to recognised Provident Fund by self and employer- each 12% of salary. (v) Life Insurance Premium paid * 1,200. (Sum assured 20,000 and Policy taken on 1-4-2013). (vi) Leave Travel Allowance received * 32,700, 20,000 was spent on travel to home district under LTC. (vii) Bonus 20,000 (viii) Interest and dividend incomes: Interest on Term Deposits with Punjab National Bank 29.000 Income from units of Unit Trust of India 3,000 Interest on debentures of Ponds India Ltd. 21,750 Dividend from a co-op. society 15,000 Interest on Govt. securities 13,000 (ix) Long term capital gains 30,000 Short term capital gains on sale of shares (STT paid) 20,000 (x) Medical expenses incurred in private hospital for treatment of self and family 5,000. His employer reimbursed 2,500. (xi) Rent received from tenant of own house property 9,600. Municipal taxes paid * 600. Prepare Mathur's statement of income showing computation of taxable income giving such explanation as necessary and tax liability. Salary is due on last date of the month. A021