Calculating Your Income Tax Liability 2008-09
| Click here to calculate your income tax for 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 2008-2009 )
| Taxable Income Slab | Tax Slab |
| Upto Rs. 1,50,000 Up to Rs. 1,80,000 (for women) Up to Rs. 2,25,000 (for residents, 65 years or above) | Nil |
| Rs. 1,50,000 – Rs. 3,00,000 | 10% |
| Rs. 3,00,001 – Rs. 5,00,000 | 20% |
| Rs. 5,00,001 – Rs. 10,00,000 | 30% |
| Above Rs. 10,00,001 | 30% + 10% surcharge on tax |
| Note: In addition, an education cess of 3% is charged on the entire tax amount including surcharge | |
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 80.
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 180,000 | 0% | Zero | |
| Tax on the remaining Rs 60,000 | 10% | Rs.6,000 | |
| Total Income Tax Due | Rs. 6,000 | ||
| Educational Cess @ 3% | Rs. 180 | ||
| Total Tax Payable | Rs. 6,180 | ||
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 150,000 | 0% | Zero | |
| Tax on the next Rs 1,50,000 (Slab 150,001 to 3,00,000) | 10% | Rs.15,000 | |
| Tax on the next Rs 2,00,000 (Slab Rs. 3,00,001 to Rs. 500,000) | 20% | Rs.40,000 | |
| Tax on the Tax on next Rs. 570,000 (above 500,001) | 30% | Rs. 1,71,000 | |
| Income Tax Due | Rs. 2,26,000 | ||
| Surcharge on total tax (Surcharge is applicable if the taxable income is above Rs.1,000,000) | 10% | Rs. 22,600 | |
| Income Tax Due | Rs. 2,48,600 | ||
| Educational Cess @ 3% | Rs.7,458 | ||
| Total Tax Payable | Rs.2,56,058 | ||
Browse All Categories :
| Tax Filing | Income from Salaries | Tax Deduction |
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Madhuri said : 27/02/2010 |
Very easy way to understand the tax calculations ...... |
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vishakha said : 22/01/2010 |
Realyy it's a nice way to understand tax. |
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shekhar.dalvi said : 01/12/2009 |
this is very nice explanetion of tax |
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Rakesh Singh said : 27/11/2009 |
Thanks for your guide to learners, excellent work done by you people....expalin very clear and easy to understand metarial. |
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pavithra said : 25/11/2009 |
iam earning 2, 33,364 per annum ,belong to female category. iam paying 25000/- per year in Birla insurance . want to know how much IT i should pay for the same. |
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Chrisma said : 25/11/2009 |
Very simple explanation.Easy to understand. |
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Sridhar said : 01/11/2009 |
Thank you very much.. Very clear and useful.. |
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amardeep said : 20/10/2009 |
It is nicely explained, but if they could have added pf, esi, gratuity, ta, da and other fringe benefit it is fantastic under one roof opportunity to learn everything. |
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Divya said : 15/10/2009 |
really good attempt to explain things easily..it would be more useful if other salary components like HRA, LTA etc. are taken into calculations.. |
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Shiv Kumar vishwakarma said : 11/10/2009 |
Very easy and explainable. Excellent work. Thankyou so much. |