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Income Tax Calculator


Tax Calculation Procedure Examples of Tax Calculation Direct Tax Code

Learn how to calculate your Income Tax
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: Mrs. Kuldeep is 35 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

Example 2: Mrs. Harminder Kaur is 32 year old and earning 12 lac annually. (Female)

Calculation
Tax on Income up to 1,90,000 Nil
Tax on Income between 1,90,000-5,00,000 (@ 10%) 31,000
Tax on Income between 5,00,000-8,00,000 (@ 20%) 60,000
Tax on Income between 8,00,000- 12,00,000 (@30%) 1,20,000
Total 2,11,000
Educational Cess(@ 3% of Total Tax) 6,330
Net Tax Payable 2,17,330

Example 3: Mrs. Rajesh is 67 years old and earning 8 lac annually. (Senior Citizen)

Calculation
Tax on Income up to 2,40,000 Nil
Tax on Income between 2,40,000-5,00,000 (@ 10%) 26,000
Tax on Income between 5,00,000-8,00,000 (@ 20%) 60,000
Total 86,000
Educational Cess(@ 3% of Total Tax) 2,580
Net Tax Payable 88,580

INCOME TAX SLABS FOR MEN, WOMEN AND SENIOR CITIZENS FROM FINANCIAL YEAR 2001 TO 2011
Tax MEN WOMEN SENIOR CITIZEN
financial year 2011-12
Basic Exemption 180000 190000 250000
10% tax 180001 to 500000 190001 to 500000 250001 to 500000
20% tax 500001 to 800000 500001 to 800000 500001 to 800000
30% tax Above 800000 Above 800000 Above 800000
financial year 2010-11
Basic Exemption 160000 190000 240000
10% tax 160001 to 500000 190001 to 500000 240001 to 500000
20% tax 500001 to 800000 500001 to 800000 500001 to 800000
30% tax above 800000 above 800000 above 800000
financial year 2009-10
Basic Exemption 160000 190000 240000
10% tax 160001 to 300000 190001 to 300000 240001 to 300000
20% tax 300001 to 500000 300001 to 500000 300001 to 500000
10% tax above 500000 above 500000 above 500000
financial year 2008-09
Basic Exemption 150000 180000 225000
10% tax 150001 to 300000 180001 to 300000 225001 to 300000
20% tax 300001 to 500000 300001 to 500000 300001 to 500000
30% tax above 500000 above 500000 above 500000
financial year 2007-08
Basic Exemption 110000 145000 195000
10% tax 110001 to 150000 145001 to 150000 Nil
20% tax 150001 to 250000 150001 to 250000 195001 to 250000
30% tax above 250000 above 250000 above 250000
note:- there is a 10% surcharge if income is greater than 10 lakh
financial year 2006-07 & 2005-06
Basic Exemption 100000 135000 185000
10% tax 100001 to 150000 135001 to 150000 Nil
20% tax 150001 to 250000 150001 to 250000 185001 to 250000
30% tax above 250000 above 250000 above 250000
financial year 2004-05 & 2003-04
Basic Exemption 50000 50000 50000
10% tax 50001 to 60000 50001 to 60000 50001 to 60000
20% tax 60001 to 150000 60001 to 150000 60001 to 150000
30% tax above 150000 above 150000 above 150000
note:- there is a 10% surcharge if income is greater than 8.5 lakh
financial year 2002-03
Basic Exemption 50000 50000 50000
10% tax 50001 to 60000 50001 to 60000 50001 to 60000
20% tax 60001 to 150000 60001 to 150000 60001 to 150000
30% tax above 150000 above 150000 above 150000
note:- there is a 5% surcharge if income is greater than 60000.
financial year 2001-02
Basic Exemption 50000 50000 50000
10% tax 50001 to 60000 50001 to 60000 50001 to 60000
20% tax 60001 to 150000 60001 to 150000 60001 to 150000
30% tax above 150000 above 150000 above 150000
note:- there is a 2% surcharge if income is greater than 60000.

Glimpse of Direct Tax Code
Indian Union government is, currently, following, Direct Tax Code (DTC) in India from April 1, 2011. This DTC has replaced the previous Income tax structure in India, leaving more money in the hands of people.

Although, During the budget 2010 presentation, the finance minister Mr. Pranab Mukherjee said to enforce the new direct tax code (DTC) from 1st of April, 2011, but same could not be fulfilled and now it will be applicable from 1st April, 2012. Union government is determined to implement that Direct Tax Code (DTC) in India by April 1, 2011. The new DTC will replace the existing Income tax structure in India, leaving more money in the hands of people. Here are the main highlights of Direct Tax Code (DTC)

Here are the main highlights of Direct Tax Code (DTC)
  • Tax exemption limit for men to be raised from Rs 160000 to Rs 180000. No new tax exemption limit for women.
  • 1% interest subvention (subsidy) on home loans up to Rs 15 lakhs, where the cost of house does not exceed Rs 25 lakhs.
  • Priority home loan limit raised to Rs 25 lakhs from Rs 20 lakhs
  • Relaxation in e-filing norms for 'small taxpayers' announced
  • To extend Rs 20,000 exemption for investment in infra debt funds for another year.
  • Senior citizens eligibility age reduced from 65 to 60. Tax Exemption limit raised to Rs 2.5 lakhs
  • Tax exemption limit for citizens above 80 years (very senior citizens) raised to Rs 5 lakhs

General Tax Incentives for Investors :
The Government offers many incentives to investors in India with a view to stimulating industrial growth and development. The incentives offered are normally in line with the government's economic philosophy, and are revised regularly to accommodate new areas of emphasis. The following are some of the important incentives offered, which significantly reduce the effective tax rates for the beneficiary companies:

Five year tax holiday for:
  • Power projects.
  • Firms engaged in exports.
  • New industries in notified states and for new industrial units established, in electronic hardware/software parks.
  • Export Oriented Units and units in Free Trade Zones.
  • As of 1994-95 budget firms engaged in providing infrastructure facilities, can also avail of this benefit.
  • Tax deductions of of 100 per cent of export profits.
  • Deduction of 30 per cent of net (total) income for 10 years for new industrial undertakings.
  • Deduction of 50 per cent on foreign exchange earnings by construction companies, hotels and on royalty, commission etc. earned in foreign exchange.
  • Deduction in respect of certain inter-corporate dividends to the extent of dividend declared.

Tax Rebates for Corporate Sector
  • The classical system of corporate taxation is followed.
  • Domestic companies are permitted to deduct dividends received from other domestic companies in certain cases.
  • Inter Company transactions are honored if negotiated at arm's length.
  • Special provisions apply to venture funds and venture capital companies.
  • Long-term capital gains have lower tax incidence.
  • There is no concept of thin capitalization.
  • Liberal deductions are allowed for exports and the setting up on new industrial undertakings under certain circumstances. There are liberal deductions for setting up enterprises engaged in developing, maintaining and operating new infrastructure facilities and power-generating units.
  • Business losses can be carried forward for eight years, and unabsorbed depreciation can be carried indefinitely. No carry back is allowed.
  • Specula tax provisions apply to activities carried on by nonresidents.
  • A minimum alternative tax (MAT) on corporations has been proposed by the Finance Bill 1996.
  • Dividends, interest and long-term capital gain income earned by an infrastructure fund or company from investments in shares or long-term finance in enterprises carrying on the business of developing, monitoring and operating specified infrastructure facilities or in units of mutual funds involved with the infrastructure of power sector is proposed to be tax exempt.

Important industry measures
  • Financial Year 2011-12 divestment target at Rs 40000 crore
  • Education sector is allocated Rs 52,057 crores
  • Infrastructure spending to rise by 24%. To allocate Rs 58,000 crores for Bharat Nirman projects
  • RBI to be allowed to grant more banking licenses
  • Considering a new fertiliser policy for urea.
  • Banks allowed to raise tax-free infrastructure bonds worth Rs 30,000 crores
  • Hybrid auto parts to get custom duty exemption
  • Ship-owners allowed duty-free spare-parts import
  • Standard excise duty and service tax at 10%. Minimum Alternate Tax (MAT) to be raised 18.5% from 18%. Foreign dividend tax rate cut to 15% for Indian companies
  • Cold-chain equipments exempted from excise duty
  • Health sector gets Rs 26760 crores, PSU banks Rs 6000 crores
Income Tax Slabs
Income Tax Slab (in Rs.) Tax
0 to 2,00,000 (2,50,000 for senior citizens) No Tax
2,00,001 to 5,00,000 10%
5,00,001 to 10,00,000 20%
Above 10,00,000 30%
  • Exemption for interest on housing loan for self-occupied property will be 1.5 lakhs per year (same as earlier).
  • Only half of Short-term capital gains will be taxed. Long term capital gains (From equities and equity mutual funds, on which STT has been paid) exempted from income tax.
  • Tax exemption at all three stages (EEE) - savings, accretions and withdrawal’s to be allowed for provident funds (GPF, EPF and PPF), NPS (new pension scheme administered by PFRDA), Retirement benefits (gratuity, leave encashment, etc), pure life insurance products & annuity schemes.
  • Surcharge and education cess abolished.
  • For incomes arising of House Property: Deductions for Rent and Maintenance reduced from 30% to 20% of the Gross Rent. Also all interest paid on house loan for a rented house will be deductible from rent.
  • Tax exemption on LTA (leave travel allowance) is abolished.
  • Tax exemption on Education loan to continue.
  • Corporate tax reduced from 34% to 30% including education cess and surcharge.
  • Taxation of Capital gains from property sale : For sale within one year, gain is to be added to taxable salary. For long term gain (after one year of purchase), gain after indexation will be added to taxable income and taxed at per the tax slab.
  • Max limit for medical reimbursements has been increased to 50,000 per year. (currently 15,000)


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