Income Tax Calculation 2010



First of all Happy Independence Day




Calculating our tax by ourselves always seemed to be a tough and confusing task, for me atleast. I learned something in it and thought to share my understanding for the needy. Before calculating the tax lets see various income tax slab declared in Indian Union Budget 2010 - 2011 by our Finance minister Pranab Mukherjee.




For Men
           0 – 1,60,000 : 0%
1,60,001 – 5,00,000 : 10%
5,00,001 – 8,00,000 : 20%
       Above 8,00,000 : 30%




 For Women
           0 – 1,90,000 : 0%
1,90,001 – 5,00,000 : 10%
5,00,001 – 8,00,000 : 20%
       Above 8,00,000 : 30%


For Senior Citizens
           0 – 2,40,000 : 0%
2,40,001 – 5,00,000 : 10%
5,00,001 – 8,00,000 : 20%
       Above 8,00,000 : 30%


To calculate income tax let’s take an example,




Say, a man’s earnings as Rs.10,00,000 annually and have invested Rs.1,00,000 under 80C. Now his tax calculation will be
 10,00,000
  1,00,000 (-) [After deducting all investments under 80C, 80CCF 80D, 80G]
  9,00,000 (Total taxable income)




 So 9,00,000 is his taxable income and the tax percentage has to be applied,
            0 – 1,60,000 = 0%
1,60,001 – 5,00,000 = 10% for 3,39,999 = 33,999.9
5,00,001 – 8,00,000 = 20% for 2,99,999 = 59,999.8
8,00,001 – 9,00,000 = 30% for    99,999 = 29,999.7 (+)
                                                              1,23,999.4
                          Educational Cess @ 3% =   3,719.98 (+)
                             Total tax payable = 1,27,719.38


So, 1,27,719.38 is the tax that has to be paid to Government of India for various development activities.