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CORRECT CALCULATION OF INCOME TAX

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05 October 2008 PLS CONFRIM WHICH IS CORRECT CALUCATION OF INCOME TAX. ON THE INTERNET WE FOUND TWO DIFFERENT INFORMATIONS

(A)
If the assesse claims any rebate/ exemption, the claimed amount will be deducted from his income with reference to the law of Income Tax Act before calculating the tax
(B)
This deduction is termed as Rebate. Rebate is a reduction from income tax liability and not a deduction from income


Total Income 264066
Less: No Tax upto Rs 150000
Net Taxable Income 114066
Income Tax @10% 11407
Rebnate on PPF Deposit
@20% on Rs.40000/= 8000
Net Tax Payable (1) 3407

OR

Total Income 264066
Less: No Tax upto Rs 150000
Net Taxable Income 114066
Rebnate on PPF Deposit
@20% on Rs.40000/= 8000
Net Taxable Income 106066
Income Tax @10% (2) 10607
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Bhaskaran Chackrapani Warrier

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Bhaskaran Chackrapani Warrier (Expert)
05 October 2008 Clarification sought for to answer.
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