Hi all,
As per my knowledge different heads of Salary get different slabs for tax deduction, like Medical Allowance comes under tax deduction but reimbursement of medical expense is tax free, likewise there are other heads which are taxable. Please help me out to know what are the different heads in salary and the tax rate applicable on these heads and heads that are not taxable.
Regards:
Sandeep Singh
From India, Delhi
As per my knowledge different heads of Salary get different slabs for tax deduction, like Medical Allowance comes under tax deduction but reimbursement of medical expense is tax free, likewise there are other heads which are taxable. Please help me out to know what are the different heads in salary and the tax rate applicable on these heads and heads that are not taxable.
Regards:
Sandeep Singh
From India, Delhi
Dear friend,
I shall make abrief on Income Tax Calculation for the Financial Year 2010-11 (Assessment Year 2011-12).
On gross salary the following deductions are applicable.
1) Professional Tax
2) House Rent in excess of 1/10th of salary subject to ceiling equivalent to HRA
3) Interest on Housing loan subject to ceiling Rs. 1,50,000.
4) Refund on Housing loan, savings, tution fee to 2 children etc. altogether subject to ceiling Rs.100,000.
5) In addition savings on infrastructure bonds upto Rs. 20,000.
5) Other than the above one lakh, 15000 to 20000 towards medi claim premium, 40000 to 60000 towards treatment on specified diseases like Motor Neuron disease, 75000 to 100,000 towards disabilty etc. are also admissible for deduction.
Now taxable income can be calculated as follows.
Gross salary - total deductions = Taxable income
Tax payee can be categorised into 3.
1) Non Seniors - Male
2) Non Seniors - Female
3) Senior Citizens (65 years old & above)
If the taxable income is Rs. 2,40,000, a Senior Citizen is fully exempted from paying tax. Non Senior Female has to pay in excess of Rs.1,90,000 & Non Senior Male in excess of Rs.1,60,000.
Beyond the above income, one has to pay 10% upto Rs.5,00,000, 20% there after upto Rs.8,00,000 and 30% in excess of Rs.8,00,000. In addition, an education cess @ 3% will be charged on Total Tax.
I shall quote on example.
Gross income of a Non Senior Male - Rs. 12,00,000
Deductions (actual) : Professional Tax - 12000, Housing loan interest - 2,00,000, Total savings/deductions - 2,50,000, Savings on Infrastructure bond - 25,000, other deductions over 1,00,000 - 50,000.
Admissible total deductions (subject to ceiling limits) - 12000+150000+100000+20000+50000 = 332000
Taxable income, 1200000 - 332000 = 868000
For Non Senior Male :
Rs. 1,60,000 is exempted.
For next 340000 (500000-160000), 340000x10% = 34000 -(1)
For next 300000 (800000-500000), 300000x20% = 60000 -(2)
For next 68000 (868000-800000), 68000x30%= 20400 -(3)
Tax - (1)+(2)+(3) = 114400
Also For Non Senior Female Tax is, 114400-3000 = 110400
and Senior Citizens Tax is, 114400-8000 = 106400
Education Cess, 114400*3% = 3432.
Total Tax - Rs. 1,17,832
Now I shall come to your details. HRA upto 50% may be exempted. Balance salary is 11400+800+3650+1250 = 17100 p.m. i.e. Annual income 2,05,200. EPF will be 1368 x 12 =16416 (This may vary subject to your orgnisational policies). Balance taxable income is 1,88,784.00 (You may also deduct professional tax etc., which I don't know).
Upto 1,60,000, no tax. 10% will be charged as tax on 1,88,784 - 1,60,000 = 28,784 i.e 2,878 & cess @ 3% is 86. Total tax = 2,878 + 86 = Rs. 2,964.00
See Excel Sheet. Enter gross salary and deductions/savings applicable in green colour column. Results will be occured in yellow colour. The red colour is used for static datas.
ABBAS.P.S,
From India, Bangalore
517I shall make abrief on Income Tax Calculation for the Financial Year 2010-11 (Assessment Year 2011-12).
On gross salary the following deductions are applicable.
1) Professional Tax
2) House Rent in excess of 1/10th of salary subject to ceiling equivalent to HRA
3) Interest on Housing loan subject to ceiling Rs. 1,50,000.
4) Refund on Housing loan, savings, tution fee to 2 children etc. altogether subject to ceiling Rs.100,000.
5) In addition savings on infrastructure bonds upto Rs. 20,000.
5) Other than the above one lakh, 15000 to 20000 towards medi claim premium, 40000 to 60000 towards treatment on specified diseases like Motor Neuron disease, 75000 to 100,000 towards disabilty etc. are also admissible for deduction.
Now taxable income can be calculated as follows.
Gross salary - total deductions = Taxable income
Tax payee can be categorised into 3.
1) Non Seniors - Male
2) Non Seniors - Female
3) Senior Citizens (65 years old & above)
If the taxable income is Rs. 2,40,000, a Senior Citizen is fully exempted from paying tax. Non Senior Female has to pay in excess of Rs.1,90,000 & Non Senior Male in excess of Rs.1,60,000.
Beyond the above income, one has to pay 10% upto Rs.5,00,000, 20% there after upto Rs.8,00,000 and 30% in excess of Rs.8,00,000. In addition, an education cess @ 3% will be charged on Total Tax.
I shall quote on example.
Gross income of a Non Senior Male - Rs. 12,00,000
Deductions (actual) : Professional Tax - 12000, Housing loan interest - 2,00,000, Total savings/deductions - 2,50,000, Savings on Infrastructure bond - 25,000, other deductions over 1,00,000 - 50,000.
Admissible total deductions (subject to ceiling limits) - 12000+150000+100000+20000+50000 = 332000
Taxable income, 1200000 - 332000 = 868000
For Non Senior Male :
Rs. 1,60,000 is exempted.
For next 340000 (500000-160000), 340000x10% = 34000 -(1)
For next 300000 (800000-500000), 300000x20% = 60000 -(2)
For next 68000 (868000-800000), 68000x30%= 20400 -(3)
Tax - (1)+(2)+(3) = 114400
Also For Non Senior Female Tax is, 114400-3000 = 110400
and Senior Citizens Tax is, 114400-8000 = 106400
Education Cess, 114400*3% = 3432.
Total Tax - Rs. 1,17,832
Now I shall come to your details. HRA upto 50% may be exempted. Balance salary is 11400+800+3650+1250 = 17100 p.m. i.e. Annual income 2,05,200. EPF will be 1368 x 12 =16416 (This may vary subject to your orgnisational policies). Balance taxable income is 1,88,784.00 (You may also deduct professional tax etc., which I don't know).
Upto 1,60,000, no tax. 10% will be charged as tax on 1,88,784 - 1,60,000 = 28,784 i.e 2,878 & cess @ 3% is 86. Total tax = 2,878 + 86 = Rs. 2,964.00
See Excel Sheet. Enter gross salary and deductions/savings applicable in green colour column. Results will be occured in yellow colour. The red colour is used for static datas.
ABBAS.P.S,
From India, Bangalore
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