Income tax is a type of direct tax, which means that it is directly paid to the government by the taxpayer. It is based on the taxpayer's income and is calculated using the tax slabs defined by the Income Tax Department.
Note: Rebate limit of Personal Income Tax to be increased to Rs. 7 lakh from the current Rs. 5 lakh in the new tax regime. Thus, persons in the new tax regime, with income up to Rs. 7 lakh to not pay any tax.
New tax slabs
|
Income |
Tax Rate |
|
Up to Rs 3 lakh |
Nil |
|
Above Rs 3 lakh and up to Rs 6 lakh |
5% on income over Rs 3 lakh |
|
Above Rs 6 lakh and up to Rs 9 lakh |
Rs 15000 + 10% on income over Rs 6 lakh |
|
Above Rs 9 lakh and up to Rs 12 lakh |
Rs 45000 + 15% on income over Rs 9 lakh |
|
Above Rs 12 lakh and up to Rs 15 lakh |
Rs 90000 + 20% on income over Rs 12 lakh |
|
Above Rs 15 lakh |
Rs 150000 + 30% on income over Rs 15 lakh |
Let us take an example to understand the current tax slabs
Rohit is a salaried person with a basic of Rs 1,20,000 per month. HRA of Rs 52,000 per month. Special Allowance of Rs 18,000 per month. LTA of Rs 20,000 annually and pays a rent of Rs 40,000. He has income from other sources like FD interest 20000 respectively.
|
Particulars |
Amount |
|
|
Income from Salary |
||
|
Basic Salary (1,20,000 * 12) |
1440000 |
|
|
HRA (52,000 * 12) |
624000 |
|
|
Special Allowance (18000 * 12) |
216000 |
|
|
LTA (20,000 annually) |
20000 |
|
|
Less: Standard Deduction |
50000 |
|
|
Total Income from Salary |
2250000 |
|
|
Add: Income from Other Sources FD Interest 20,000 |
20000 |
|
|
Gross Total Income |
2270000 |
|
|
Income Tax [1,50,000 + (2270000 - 1500000) * 30%] |
381000 |
|
|
Add: Cess @4% on 3,81,000 |
15240 |
|
|
Total Income Tax |
396240 |
|
CAclubindia
