Tax Proposals of Budget-2014 for Salaried and Retired People

CA Tejas Andharia , Last updated: 11 July 2014  
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Budget – 2014 has proposed the following income tax rates

For Individuals below 60 years age (including Woman Assessees): 

Income

Tax Rate

Upto 2,50,000

Nil

250,000 to 5,00,000

10% of the amount exceeding 250,000

500,000 to 10,00,000

Rs.25,000 + 20% of the amount exceeding 5,00,000

10,00,000 & above

Rs.1,25,000 + 30% of the amount exceeding 10,00,000


For Individuals aged 60 years and above but below 80 years (Senior Citizen):

Income

Tax Rate

Upto 3,00,000

Nil

3,00,000 to 5,00,000

10% of the amount exceeding 3,00,000

5,00,000 to 10,00,000

Rs.20,000 + 20% of the amount exceeding 5,00,000

10,00,000 & above

Rs.1,20,000 + 30% of the amount exceeding 10,00,000


For Individuals aged 80 years and above (Very Senior Citizen):

Income

Tax Rate

Upto 5,00,000

Nil

5,00,000 to 10,00,000

20% of the amount exceeding 5,00,000

10,00,000 & above

Rs.1,00,000 + 30% of the amount exceeding 10,00,000

Plus 3% education cess on the tax calculated as above.  Further, limit to get deduction under section 80C is increased to Rs. 1,50,000/- from Rs. 1,00,000/-

Now, we will study certain income scenarios based on above mentioned budget proposals.

Person with Age of less than 60 years

scenario - 1

scenario - 2

scenario - 3

scenario - 4

Gross Total Income

2,70,000

3,70,000

4,20,000

4,20,000

Less:Deductions u/s. 80C
Eligible upto Rs. 1,50,000/-

0

1,00,000

1,00,000

1,50,000

Taxable Income

2,70,000

2,70,000

3,20,000

2,70,000

Tax on above income

2,000

2,000

7,000

2,000

Less: Rebate u/s 87A

2,000

2,000

2,000

2,000

Tax after Rebate

0

0

5,000

0

Add: Education Cess 3%

0

0

150

0

Total Tax Liability

0

0

5,150

0

Person with Age of 60 years or more but less than 80 years

scenario - 1

scenario - 2

scenario - 3

scenario - 4

Gross Total Income

3,20,000

4,20,000

4,70,000

4,70,000

Less:Deductions u/s. 80C
Eligible upto Rs. 1,50,000/-

0

1,00,000

1,00,000

1,50,000

Taxable Income

3,20,000

3,20,000

3,70,000

3,20,000

Tax on above income

2,000

2,000

7,000

2,000

Less: Rebate u/s 87A

2,000

2,000

2,000

2,000

Tax after Rebate

0

0

5,000

0

Add: Education Cess 3%

0

0

150

0

Total Tax Liability

0

0

5,150

0

Person with Age of 80 years or more

scenario - 1

scenario - 2

scenario - 3

scenario - 4

Gross Total Income

5,00,000

5,10,000

6,10,000

6,60,000

Less:Deductions u/s. 80C
Eligible upto Rs. 1,50,000/-

0

0

1,00,000

1,50,000

Taxable Income

5,00,000

5,10,000

5,10,000

5,10,000

Tax on above income

0

2,000

2,000

2,000

Less: Rebate u/s 87A

0

0

0

0

Tax after Rebate

0

2,000

2,000

2,000

Add: Education Cess 3%

0

60

60

60

Total Tax Liability

0

2,060

2,060

2,060

To calculate the tax for other scenarios, you may use the tax calculator.

Author:

CA. Tejas K. Andharia

B. COM, F.C.A., D.I.S.A.(ICAI),  D.I.R.M.(ICAI)  

Bhavnagar, Gujarat

Email: tejasinvites@gmail.com


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CA Tejas Andharia
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Comments

12 July 2014 Avnesh Chaudhary

why exemption of 150000 cannot be claimed on the taxable income of 270000 or 370000???


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