Steps for Calculation of Income Tax A.Y. 2012-12 (F. Y. 2011-12)
Step I : Gross Income
Calculate your Annual Income. (Monthly Income * 12)
Step II : Donations
Calculate the total donations you have made towards various institutions in accordance to Income Tax Rules.
Step III : Savings
Calculate your total savings. This may include all the savings and investments mentioned in Income Tax Saving Schemes Sections.
Step IV : Taxable Income Follow the following rule to calculate your taxable income
Step V : Income Tax
When you have calculated your taxable income, refer to the following slabs to calculate your Income Tax accordingly. Choose the slab according to your income and calculate your Income tax.
Direct tax- tax levied on personal or corporate income
Indirect tax- tax levied on price of a good or service
Public goods and services are provided by government and quasi-government agencies which tend to finance themselves largely through taxes.
There is no change in tax structure for women.
Income tax slabs 2011-2012 (for Senior Citizens) in India:
A new income tax bracket for senior citizens has been introduced which are above eighty years of age. The tax exemption limit to senior citizens above 80 of age has been increased to Rs. five lakhs from the existing 2.4 lakhs. For senior citizens between 60 to 80 years the tax exemption limit has been revised to Rs 2,50,000 from Rs 2,40,000 thus an increase of Rs 10,000 only. The senior citizen age has also been reduced to 60 years from 64 years.
Step VI: Education Cess
Add 3 % of your taxable income as the Educational Cess to the Income Tax amount calculated in step V.
TAX CALCULATED
Example
Example 1: Mr. ABC is 25 year old and earning 8 lac annually. (Male)
Calculation
Step I : Gross Income
Calculate your Annual Income. (Monthly Income * 12)
Step II : Donations
Calculate the total donations you have made towards various institutions in accordance to Income Tax Rules.
Step III : Savings
Calculate your total savings. This may include all the savings and investments mentioned in Income Tax Saving Schemes Sections.
Step IV : Taxable Income Follow the following rule to calculate your taxable income
Step I - ( Step II + Step III) = Taxable Income
Step V : Income Tax
When you have calculated your taxable income, refer to the following slabs to calculate your Income Tax accordingly. Choose the slab according to your income and calculate your Income tax.
Income tax slabs 2011-2012 (for Men) in India:
The threshold income tax exemption limit for men has been revised to Rs 1,80,000 than the previous limit of Rs 1,60,000.There will be a minimum saving of Rs 2000 in income tax than previous year.| Income Tax Slab (in Rs.) | Tax |
| Up to Rs 1,80,000 | No Tax |
| 1,80,001 to 5,00,000 | 10% |
| 5,00,001 to 8,00,000 | 20% |
| Above 8,00,000 | 30% |
Income tax slabs 2011-2012 (for Women) in India:
When the government charges a fee on a product, income or activity to be used to finance government expenditure gets known as tax. Government imposes two kinds of taxes :Direct tax- tax levied on personal or corporate income
Indirect tax- tax levied on price of a good or service
Public goods and services are provided by government and quasi-government agencies which tend to finance themselves largely through taxes.
There is no change in tax structure for women.
| Income Tax Slab (in Rs.) | Tax |
| 0 to 1,90,000 | No Tax |
| 1,90,001 to 5,00,000 | 10% |
| 5,00,001 to 8,00,000 | 20% |
| Above 8,00,000 | 30% |
Income tax slabs 2011-2012 (for Senior Citizens) in India:
A new income tax bracket for senior citizens has been introduced which are above eighty years of age. The tax exemption limit to senior citizens above 80 of age has been increased to Rs. five lakhs from the existing 2.4 lakhs. For senior citizens between 60 to 80 years the tax exemption limit has been revised to Rs 2,50,000 from Rs 2,40,000 thus an increase of Rs 10,000 only. The senior citizen age has also been reduced to 60 years from 64 years.
| Income Tax Slab (in Rs.) | Tax |
| Up to Rs 5,00,000 | No tax / exempt |
| 5,00,001 to 8,00,000 | 20% |
| Above 8,00,000 | 30% |
Step VI: Education Cess
Add 3 % of your taxable income as the Educational Cess to the Income Tax amount calculated in step V.
TAX CALCULATED
Example
Example 1: Mr. ABC is 25 year old and earning 8 lac annually. (Male)
Calculation
| Tax on Income up to 1,60,000 | Nil |
| Tax on Income between 1,60,000-5,00,000 (@ 10%) | 34,000 |
| Tax on Income between 5,00,000-8,00,000 (@ 20%) | 60,000 |
| Total | 94,000 |
| Educational Cess(@ 3% of Total Tax) | 2,820 |
| Net Tax Payable | 96,820 |
Nice article. that helps
ReplyDeletets only the People working in Service sector (both Public and Private) that r majorly affected by such decisions. People in Private business suffers least from it. And now they thinking of raising xemption limit to 2lacs. Isnt this a childish act? Looks as if the Government is not aware of the inflation tht it has imposed in India. Tax limits should go in-hands with inflation rate considering some lower watermark.
ReplyDeleteI am Muthu Row, My monthly earnig is arround 2 Lks i want to know How to calculate income tax? and How to reduce it... Pls give some valuable suggestion
ReplyDeleteSome of suggestions would be :
ReplyDelete1. Invest in house property, the interest paid of house loan can save taxes upto 1.5 lacs yearly
2. ELSS schemes / Tax saving 5 year bank Fixed Deposit / principal amount / provident fund .. maximum of 1.0 lacs yearly
3. 20k can be invested in infra structure bond of 5 year lockin period also saves tax upto the invested amount.
I am running a SSI unit. My net profit is Rs.560500/. How much shuld I pay as income tax?
ReplyDelete