Step I: Total Income
Calculate your Annual Income which is monthly income multiplied by 12.
Step II: Count the donations
In accordance to the income tax rules calculate the total donations that you have made towards various institutions.
Step III: How much have you saved?
Calculate all your savings and investments pertaining to the Income Tax Saving Schemes Sections.
Step IV: Taxable Income
Calculate your taxable income with the help of the following calculation.
Taxable Income =Step I – ( Step II + Step III)
Step V: Income Tax
After calculating your taxable income, calculate your income tax by referring to the following slabs.
Income tax slabs 2009-2010 (for Men) in India:
| Income Tax Slab (in Rs.) | Tax |
| 0 to 1,60,000 | No Tax |
| 1,60,001 to 3,00,000 | 10% |
| 3,00,001 to 5,00,000 | 20% |
| Above 5,00,000 | 30% |
Income tax slabs 2009-2010 (for Women) in India:
| Income Tax Slab (in Rs.) | Tax |
| 0 to 1,90,000 | No Tax |
| 1,90,001 to 3,00,000 | 10% |
| 3,00,001 to 5,00,000 | 20% |
| Above 5,00,000 | 30% |
Income tax slabs 2009-2010 (for Senior Citizens) in India:
| Income Tax Slab (in Rs.) | Tax |
| 0 to 2,40,000 | No Tax |
| 2,40,001 to 3,00,000 | 10% |
| 3,00,001 to 5,00,000 | 20% |
| Above 5,00,000 | 30% |
Step VI: Surcharge
Add 10 % Surcharge of your annual income to the Income Tax calculated in Step V and calculate new Income Tax.
(Not applicable if income is BELOW Rs. 10 lakh)
Step VII: Education Cess
You can add 3 % of your taxable income as the Educational Cess to the new Income Tax amount calculated in step VI.
TAX CALCULATED
Example
Example 1: Aman is 35 year old and earning 8 lac annually. (Male)
Calculation
| Tax on Income up to 1,60,000 | Nil |
| Tax on Income between 1,60,000-3,00,000 (@ 10%) | 14,000 |
| Tax on Income between 3,00,000-5,00,000 (@ 20%) | 40,000 |
| Tax on Income between 5,00,000- 8,00,000 (@30%) | 90,000 |
| Total | 1,44,000 |
| Educational Cess(@ 3% of Total Tax) | 4,320 |
| Net Tax Payable | 1,48,320 |
Example 2: Mrs. Paramjeet 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 1,90,000-3,00,000 (@ 10%) | 11,000 |
| Tax on Income between 3,00,000-5,00,000 (@ 20%) | 40,000 |
| Tax on Income between 5,00,000- 12,00,000 (@30%) | 2,10,0008 |
| Total | 2,61,000 |
| Educational Cess(@ 3% of Total Tax) | 7,830 |
| Net Tax Payable | 2,68,830 |
Example 3: Mrs. Rohan 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 2,40,000-3,00,000 (@ 10%) | 6,000 |
| Tax on Income between 3,00,000-5,00,000 (@ 20%) | 40,000 |
| Tax on Income between 5,00,000- 8,00,000 (@30%) | 90,000 |
| Total | 1,36,000 |
| Educational Cess(@ 3% of Total Tax) | 4,080 |
| Net Tax Payable | 1,40,080 |
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