Tax calculation for 09-10

Tax
Close
Top of Form


>" name=email.articleTitle>



Bottom of Form
Calculating Your Income Tax Liability 2009-10
The income tax which is charged to you is based on the tax slabs declared by the Government in its annual budget every year. The following table encapsulates the tax slabs applicable this year. (Financial Year 2009-2010)
Taxable Income Slab
Tax Slab
Upto Rs. 1,60,000Up to Rs. 1,90,000 (for women)Up to Rs. 2,40,000 (for residents, 65 years or above)
Nil
Rs. 1,60,000 - Rs. 3,00,000
10%
Rs. 3,00,001 - Rs. 5,00,000
20%
Rs. 5,00,001 - Rs. 10,00,000
30%
Note: In addition, an education cess of 3% is charged on the entire tax amount. Surcharge of 10% on income above 10 Lakhs have been scraped.

Please note that the taxable income is arrived at after adding all your different sources of income and subtracting the deductions that you have taken advantage of under Section 80C to 80U.
Lets take a few examples to illustrate how you can calculate taxes based on these slabs.
Example 1: Sarla is a salaried employee, her annual income is Rs. 2,40,000. She has made no tax savings investments during the year. Let us calculate her income tax liability.
Heads
Amounts
Gross Total Income
Rs. 240,000
Deductions
Nil
Taxable Income
Rs. 240,000
Income Tax Calculations
Tax
Tax on Income upto Rs 1,90,000
0%
Zero
Tax on the remaining Rs 50,000
10%
Rs.5,000
Total Income Tax Due
Rs.5,000
Educational Cess @ 3%
Rs. 150
Total Tax Payable
Rs. 5,150

Example 2:Vinod is a salaried employee. His annual income is Rs. 3,25,000.His home loan interest payment is Rs 1,20,000 and his home loan principal repayment is Rs. 80,000.He has made an investment of Rs. 50,000 in NSC.Let us calculate Vinod's interest liability.
Heads
Amounts
Income from Salary
Rs. 325,000
Income from House Property(Section 24 Deduction for Home loan interest repayment)
Rs.120,000
Gross Total Income
Rs. 205,000
Section 80 C Deductions
Rs.100,000
NSC Investment
Rs. 50,000

Home Loan Principal Repayment
Rs.80,000

Total
Rs. 130,000

Taxable Income
105,000
Total Tax Due
Rs. 0
Example 3:Ram is a salaried employee who earned Rs.12,00,000. He has bought a health insurance policy for himself worth Rs 10,000. Ram has also bought ELSS funds for Rs. 80,000 and has also paid a LIC premium of Rs. 20,000.He has also donated Rs. 20,000 to the Prime Minister's Relief Fund. Let us calculate Ram's tax liability.
Heads
Amounts
Gross Total Income
Rs. 1,200,000
Section 80 C Deductions
Rs.100,000
LIC Premium
Rs. 20,000

Home Loan Principal Repayment
Rs. 80,000

Total
Rs. 100,000

Other Donations
Rs. 30,000
Section 80D Health Insuance Premium
Rs. 10,000

Section 80G Donation To A Charity
Rs. 20,000

Total Taxable Income
1,070,000
Income Tax Calculations
Tax
Tax on Income upto Rs 1,60,000
0%
Zero
Tax on the next Rs 1,40,000(Slab 160,001 to 3,00,000)
10%
Rs.14,000
Tax on the next Rs 2,00,000(Slab Rs. 3,00,001 to Rs. 500,000)
20%
Rs.40,000
Tax on next Rs. 570,000(above 500,001)
30%
Rs. 1,71,000
Income Tax Due
Rs. 2,25,000
Surcharge on total tax(No Surcharge is payable fromprevious year 2009-10 onwards)
0.00%
Rs. Nil
Income Tax Due
Rs. 2,25,000
Educational Cess @ 3%
Rs.6,750
Total Tax Payable
Rs.2,31,750