How is income tax calculated for salaried person?
As his taxable income is Rs. 3,77,500, he falls in the slab of 2.5 lakhs – 5 lakhs of income tax. Thus he has to pay 10\% of his net income as income tax….Example.
| Basic Salary | 25000 * 12 | = 3,00,000 |
|---|---|---|
| DA | 4500 * 12 | = 54,000 |
| EA | 2250 * 12 | = 27,000 |
| Gross Salary | = 3,81,000 | |
| Professional Tax | 3500 |
What is the income tax process in India?
What is the Existing / Old Income Tax Regime?
| Income Range | Tax rate | Tax to be paid |
|---|---|---|
| Up to Rs.2,50,000 | 0 | No tax |
| Between Rs 2.5 lakhs and Rs 5 lakhs | 5\% | 5\% of your taxable income |
| Between Rs 5 lakhs and Rs 10 lakhs | 20\% | Rs 12,500+ 20\% of income above Rs 5 lakhs |
| Above 10 lakhs | 30\% | Rs 1,12,500+ 30\% of income above Rs 10 lakhs |
Is income tax automatically deducted from salary?
Yes, TDS on salary is deducted every month. As per Section 192, the employer will deduct TDS on salary at the time of making the payment to the employee. Since the employee gets a salary every month, the employer will make a deduction for TDS on salary every month.
Do you have to pay income tax in India?
After you deduct all the applicable deductions and TDS, the amount that you get is the tax amount you need to pay to the Indian government. If your total income is lesser than 2.5 lakhs, then you do not need to pay any income tax. Beyond this limit, you are liable to pay income tax according to your salary slab.
How do I fill out an incometax form in India?
Download the form from incometaxindia.gov.in or just google it. Its also called Sahaj form. Fill in your details. Don’t forget to take form16 from ur employer. It contain TDS deduction details. Mention this data in ur form. After finishing, create xml file (option is given in the excel utility file option) but after validating ur file.
What is the tax deduction for senior citizens in India?
For senior citizens of 60 years or older, the 0 tax limit is prescribed for income up to INR 3,00,000. The TAX employer deducts is called TDS or Tax Deducted at Source which they pay to IT department. The amount they cut off from the salary, is calculated on the base of your total income and investments you did.
What is the meaning of INR income tax?
Income tax is an annual tax on income. The Indian Income Tax Act (Section 4) provides that in respect of the total income of the previous year of every person, income tax shall be charged for the corresponding assessment year at the rates laid down by the Finance Act for that assessment year.