Calculate Taxable Income

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Calculate Your Taxable Income

As per the provisions of the income tax Act there are five heads of Income. Following are as below—

Salary
House Property
Business & Profession
Capital Gains
Other Sources

Steps in calculating tax—

Classify the receipts into one of the five sources.
Collect information on all the receipts both cash and other source of income. (income from lottery)
Deduct exemptions allowed from each source of income. (Medical allowance exempt up to Rs 15000/-)
Add taxable portion of income from all sources.
Calculate tax based on the prevailing rates and also depending on weather male below 65, female below 65 or a senior citizen.
If the income is above Rs 1000000/- add surcharge @ 10%.
Calculate education cess @ 3% on the tax payable including surcharge.

Tax slab for Man (2009-2010)

From	To	%
0	160000/-	0%
160001	300000/-	10%
300001	500000/-	20%
500001	Above	30%

Tax slab for Women (2009-2010)

From	To	%
0	190000/-	0%
145001	300000/-	10%
300001	500000/-	20%
500001	Above	30%

Tax slab for Senior Citizen (2009-2010)

From	To	%
0	240000/-	0%
240001	300000/-	10%
300001	500000/-	20%
500001	Above	30%

Tax Savings under Sec 80 C

Premium paid towards life insurance.
Equity linked savings scheme of mutual fund.
National savings scheme.
Tuition free paid on children’s education up to two children.
Public provident fund.
Bank fixed deposits with a tenure of 5 years or more.
Principal on housing loan.
Recognized superannuation fund.
Specified infrastructure bond.

Tax Savings under Sec 80 CCE

In this section the maximum allowable deductions for investments made under section 80C and 80CCC (pension) taken together is Rs 100000/-.
Maximum deduction for 80C + 80CCC is Rs 100000/- with no internal break up limit.

Tax Savings under Sec 10 (10D)

Proceeds from an insurance policy including the gain made are tax free provided that sum assured is at least 5 times of premium.
In case this condition is violated then the entire proceeds becomes taxable as income from other sources. Proceeds form a key man insurance policy is taxable.

For Example

Particular	Amount
Basic	150000/-
Transportation Allowance	15000/-
Medical Allowance	20000/-
Special Allowance	300000/-
Personal Pay	300000/-
Incentives	450000/-
Total	1215000/

Solution

Particular	Amount	Amount
Basic is fully taxable		150000/-
Personal pay is fully taxable		300000/-
Special Allowance is fully taxable		300000/-
Incentives is fully taxable		450000/-
Medical Allowance (less exempt amount Rs 15000/- u/s 80D)	20000/- -15000/-	5000/-
Transportation Allowance (less max exempt amount Rs 9600/-)	15000/- -9600/-	5400/-
Total Taxable Amount		1210400/

Calculate total tax

Slab	Income in the slab	Rate	Tax
0 to 110000/-	110000/-	0%	0/-
110001/- to 150000/-	40000/-	10%	4000/-
150001/- to 250000/-	100000/-	20%	20000/-
Above 250001/-	960400/-	30%	288120/-
Total			312120/-
Add Surcharge @ 10% on 312120/-			31212/-
Total			343332/-
Add Education cess @ 3%			10300/-
Total Tax			353632/

Note
Maximum exempt amount is Rs 15000/- for medical allowance under section 80D but you need to furnishes all medical bills.

Maximum exempt amount is Rs 9600/- for transportation allowance.
Surcharge @ 10% incase of total income is more than 10 lakh per annum.
Education cess @ 3%.

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