Dear All
I want to know that which part of salary break up (i.e. basic, HRA, DA, allownces etc) is taxable..?
on which amount employee has to pay tax.?
Does Higher Basic leads to higher tax?
how to minimize the amount paying as a tax?
Please do help. ASAP.
Regards,
Neha Varma
From India, Delhi
I want to know that which part of salary break up (i.e. basic, HRA, DA, allownces etc) is taxable..?
on which amount employee has to pay tax.?
Does Higher Basic leads to higher tax?
how to minimize the amount paying as a tax?
Please do help. ASAP.
Regards,
Neha Varma
From India, Delhi
hi neha,
as per my knowledge and payment of the wages rules , Basic+ DA and HRA is the taxeble income for employee.
if you add medical, transport allowences in salary stucture this is the also taxeble because P.T is calculate on Gross income.
From India, Nasik
as per my knowledge and payment of the wages rules , Basic+ DA and HRA is the taxeble income for employee.
if you add medical, transport allowences in salary stucture this is the also taxeble because P.T is calculate on Gross income.
From India, Nasik
Dear Neha Varma,
In general the income earned by employees are taxable.
But the employees can avail exemption permitted under the IT rules.
1. Conveyance allowance is exempt to the extent of Rs.800/ month. Amount paid over and above Rs.800/- is taxable.
2. Medical reimbursement is exempt from tax upto Rs.15000/- per annum against production of medical bills.
3. Leave Travel Allowance is exempt from tax if the employee avails LTA twice in a block of 4 calendar years. However, the employee has to provide proof for having availed travel (self and member of his family)
4. Interest on Housing Loan is exempt from taxable income.
5. Likewise if the employee invests maximum of 1 Lakh in the form of PF, LIC, Principal on Housing Loan, PPF, Children Education etc this is exempt from tax.
6. HRA is exempt from tax subject to certain conditions stipulated under IT rules.
The list is not exhaustive and only gives an overview.
Regards
M.V.KANNAN
From India, Madras
257In general the income earned by employees are taxable.
But the employees can avail exemption permitted under the IT rules.
1. Conveyance allowance is exempt to the extent of Rs.800/ month. Amount paid over and above Rs.800/- is taxable.
2. Medical reimbursement is exempt from tax upto Rs.15000/- per annum against production of medical bills.
3. Leave Travel Allowance is exempt from tax if the employee avails LTA twice in a block of 4 calendar years. However, the employee has to provide proof for having availed travel (self and member of his family)
4. Interest on Housing Loan is exempt from taxable income.
5. Likewise if the employee invests maximum of 1 Lakh in the form of PF, LIC, Principal on Housing Loan, PPF, Children Education etc this is exempt from tax.
6. HRA is exempt from tax subject to certain conditions stipulated under IT rules.
The list is not exhaustive and only gives an overview.
Regards
M.V.KANNAN
From India, Madras
Dear Neha Varma,
I shall insert an Excel worksheet for Income Tax Calculation on salary for the Financial Year 2010-11 (Assessment Year 2011-12). Prior to that I wish to explain some details to get an idea to enter the inputs.
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.
6) 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
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.
With regards,
ABBAS.P.S,
ITI Ltd, PALAKKAD - 678 623,
KERALA, INDIA.
Ph. +91 9447 467 667
From India, Bangalore
I shall insert an Excel worksheet for Income Tax Calculation on salary for the Financial Year 2010-11 (Assessment Year 2011-12). Prior to that I wish to explain some details to get an idea to enter the inputs.
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.
6) 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
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.
With regards,
ABBAS.P.S,
ITI Ltd, PALAKKAD - 678 623,
KERALA, INDIA.
Ph. +91 9447 467 667
From India, Bangalore
now a days we can save 20000/- above 100000/-. condition apply is the amt whould be invested in infrastructure bonds. Please clearify me if I am not right. Regards, P K Prasad
From India
From India
The fees or expenses for club also exempted from tax.
"The initial one time deposits or fees for corporate or institutional membership, where the benefit does not remain with a particular employee after cessation of employment, are exempt." as per I.T.Dept
regards
R.Ponraj
From India, Lucknow
"The initial one time deposits or fees for corporate or institutional membership, where the benefit does not remain with a particular employee after cessation of employment, are exempt." as per I.T.Dept
regards
R.Ponraj
From India, Lucknow
Greetings,
All portions of the salary are taxable. Some of the elements where tax deductions are exempted are the following:
Higher basic does not mean higher tax - it means higher HRA components and higher PF / Gratuity calculations.
Sreeja
From United Kingdom, London
All portions of the salary are taxable. Some of the elements where tax deductions are exempted are the following:
- Production of receipts for 50% or 40% of basic as HRA (depending on Metro or Non Metro)
- Production of bills for fuel reimbursement (based on the limits in IT Act)
- Production of bills for kids education (IT Act) etc. .
Higher basic does not mean higher tax - it means higher HRA components and higher PF / Gratuity calculations.
Sreeja
From United Kingdom, London
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