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Thread: Income Tax Calculator - How to calculate tax

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    Income Tax Calculator - How to calculate tax

    Income Tax Calculator - How to calculate tax


    Example 1: Let us take a case where the assessee's income is Rs. 2,10,000.

    · According to the Income Tax Slab, the first 1, 10,000 is not taxable.

    · The next Rs. 50,000 is taxable @10%.

    · 10% of Rs. 50,000 is Rs. 5,000.

    · The remaining Rs. 50,000 i.e. 2,10,000 - (1,10,000+50,000) is taxable @20%.

    · 20% of Rs. 50,000 is Rs. 10,000.

    · Therefore, the net Income Tax Payable is Rs. 5,000 + Rs. 10,000 i.e. Rs. 15,000.

    Example 2: Let us take a case where the assessee is women and whose taxable income is Rs. 2,40,000.

    · According to the Income Tax Slab, the first 1,35,000 is not taxable.

    · The next Rs. 15,000 is taxable @10%.

    · 10% of Rs. 15,000 is Rs. 1,500.

    · The remaining Rs. 90,000 i.e. 2,40,000 - (1,35,000+15,000) is taxable @20%.

    · 20% of Rs. 90,000 is Rs. 18,000.

    · Therefore, the net Income Tax Payable is Rs. 1,500 + Rs. 18,000 i.e. Rs. 19,500.

    Example 3: Let us take a case where the assessee is senior citizen and whose taxable income is Rs. 2,90,000.


     


    · According to the Income Tax Slab, the first 1, 85,000 are not taxable.

    · The next Rs. 65,000 is taxable @20%.

    · 20% of Rs. 65,000 is Rs. 13,000.

    · The next Rs. 40,000 i.e. 2, 90,000 - (1,85,000+65,000) is taxable @30%.

    · 30% of Rs. 40,000 is Rs. 12,000.

    · Therefore, the net Income Tax Payable is Rs. 13,000 + Rs. 12,000 i.e. Rs. 25,000.

    (If the assesse claims any rebate/ exemption, the claimed amount will be deducted from his income with reference to the law of Income Tax Act before calculating the tax.)

    Note:
    · Surcharge @ 10% applicable if total income exceeds Rs. 8.5 lakh for A.Y. 2005-06 and Rs. 10 lakh for A.Y. 2006-07.

    · There is a new section 80C according to which a person can get rebate upto Rs. 1,00,000 against insurance premium, PF contributions and other such schemes.

    · In case of higher education there is a deduction in tax for a maximum period of 8 years, deduction is allowed to the iinterest paid in the year.

    · Marginal relief would be provided to ensure that the additional income tax payable including surcharge, on the excess of income over Rs. 10,00,000 (Rs. 8.5 lakh for A.Y. 2005-06) is limited to the amount by which the income is more than Rs. 10 lakh (Rs. 8.5 lakh for A.Y. 2005-06).

    · Education cess @ 3% on tax plus surcharge.



  2. #2
    coolestnapster
    Guest
    hmm this i didi in my graduation class and in 12th to calculate tax ......

    nice post

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