Solution:Step-1 Compute the income of an individual under '5' heads of income on the basis of his residential status.
Step-2 The income of any other person, if including under section 60 to 65, will be included under respective heads.
Step-3 Set off of the losses if permissible, while aggregating the income under '5' heads of income.
Step-4 Carry forward and set off the losses of past years, if permissible from such income.
Step-5 The incomputed steps 1 to 4 is known as gross total income from which deductions under section '80C' to '80U' (Chapter VIA) will be allowed.
Step-6 The balance income after allowing the deduction is known as total income which will be rounded off to the nearest Rs. '10".
Step-7 Compute tax on such total income at the prescribed rates of tax.
Step-8 Allow rebate of maximum Rs. 2500 under section '87A" in case of a resident individual having total income upto Rs. 3,50,000 for details see below.
Step-9 Add surcharge @ 10% on total income exceeding Rs. 50,00,000 and upto Rs. 1 Crore and 15% of such income tax in case of an individual having a total income exceeding Rs. 1 Crore.
Step-10 Add deduction cess @ 20% and SHEC @ 1% on the tax (including surcharges if applicable).
Step-11 Allow relief under section '89' if any
Step-12 Deduct the TDS, advance tax paid for the relevant assessment year and double taxation relief under section '90', 90A or 91.