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.