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

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Sreenivasulu Yarram said : 15/04/2009	My Package:300000 per annum what is basic for month? what is my hra? what is my deductions? what is my taxable amount? please send all these things with salary slip format
KALPESH PANCHAL said : 15/04/2009	what is the rate for calculate interest on income tax
vishal raj said : 14/04/2009	My Net income is around Rs.270000 and I am paying rs.3600 house rent per month. What will be my income tax for the financial year 2008-09?
Hafeez Ahamed said : 13/04/2009	sir, for HRA Which least figure we can take. What is the three options?
arbind  said : 08/04/2009	Please calculate my tax
mahesh said : 01/04/2009	sir, My Basic salary - 95277 DA. 40623 HRA 32500 CONVEYANCE 30000 M.A. 18000 INCENTIVE 51700 LIC 16541 PF 11435 T.F 10000 P.T 2200 HOW TO CALCULATE THE TAX AMOUNT PLEASE
Bapan said : 31/03/2009	My Gross income is around Rs.420000 and I am paying rs.3500 house rent per month. What will be my income tax for the financial year 2008-09?
Bapan said : 31/03/2009	My Net income is around Rs.420000 and I am paying rs.3500 house rent per month. What will be my income tax for the financial year 2008-09?
Sugar Boy said : 30/03/2009	Nice One, Like to Have More Egs
Pavan Phalke said : 25/03/2009	It is very usful tool for calculating tax and tax related queries. It would be more usful if you provide a READY RECKONER or SOFTWARE which gives approx. amount of total TAX Payable suppose I type my tax related figures.