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direct tax
how to calculate tds who is receiving salary
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gross salary
less: transport allowance
professional tax
deductions under chapter viA
setoff current year house property loss
income from salary
compute income tax on above
less: transport allowance
professional tax
deductions under chapter viA
setoff current year house property loss
income from salary
compute income tax on above
- Calculate gross monthly income as a sum of basic income, allowances and perquisites.
- Calculate available exemptions under Section 10 of the Income Tax Act (ITA). Exemptions are applicable on allowances such as medical, HRA, travel.
- Reduce exemptions according to step (2) for the gross monthly income calculated in step (1).
- As TDS is calculated on yearly income, multiply the corresponding figure from above calculation by 12. This is your yearly taxable income from salary.
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