# Thread: Income Tax Calculator - How to calculate tax

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

nice post

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