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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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