05 July 2012
1. Compute total taxable income for the whole year. 2. Compute total tax liability on such income. 3. Compute average rate of tax = Total Tax/Total Taxable Income. 4. TDS per month = Monthly taxable salary*average rate of tax.
05 July 2012
On gross salary the following deductions are applicable. 1) Professional Tax 2) House Rent in excess of 1/10th of salary subject to ceiling equivalent to HRA 3) Interest on Housing loan subject to ceiling Rs. 1,50,000. 4) Refund on Housing loan, savings, tution fee to 2 children etc. altogether subject to ceiling Rs.100,000. 5) In addition savings on infrastructure bonds upto Rs. 20,000. 6) Other than the above one lakh, 15000 to 20000 towards medi claim premium, 40000 to 60000 towards treatment on specified diseases like Motor Neuron disease, 75000 to 100,000 towards disabilty etc. are also admissible for deduction.
Now taxable income can be calculated as follows.
Gross salary - total deductions = Taxable income.....
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