Answer-An individual taxpayer has a Gross Total Income (GTI) of ₹3,00,000 for the tax year. The taxpayer ma...

Core Rule Schedule XV deductions are allowed only from the Gross Total Income GTI. Deductions cannot exceed the GTI, cannot be claimed if the GTI is nil or negative, and cannot create or increase a lossnegative income. Therefore, even though the total eligible investments were 4,50,000, the allowable deduction is restricted to the maximum extent of GTI 3,00,000, bringing the net Total Income down to 0 Nil. The remaining 1,50,000 lapses and cannot create a carry-forward loss.

Question

An individual taxpayer has a Gross Total Income (GT

I of ₹3,00,000 for the tax year. The taxpayer makes eligible investments and expenditures under Schedule XV (such as formerly Section 80C, 80D, etc.) totaling ₹4,50,000. What will be the maximum allowable deduction and the resulting Total Income for the taxpayer?

A Allowable deduction: ₹4,50,000; Total Income: (-) ₹1,50,000 (Loss to be carried forward)

B Allowable deduction: ₹3,00,000; Total Income: ₹0 (Nil)

C Allowable deduction: ₹4,50,000; Total Income: ₹0 (Nil)

D Allowable deduction: ₹0; Total Income: ₹3,00,000

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