Ten Example of Income Tax Calculation
Example 1
For Assessment Year 2016-17
(A) Calculation of Income tax in the case of an employee (Male or Female) below the age of sixty years and having gross salary income of:
i) Rs.2,50,000/- ,
ii) Rs.5,00,000/- ,
iii) Rs.10,00,000/-
iv) Rs.20,00,000/-. and
v) Rs. 1,10,00,000/-
(B) What will be the amount of TDS in case of above employees, if PAN is not submitted by them to their DDOs/Offices:
|
Particulars |
Rupees (i) |
Rupees (ii) |
Rupees (iii) |
Rupees (iv) |
Rupees (v) |
|
Gross Salary Income (including allowances) |
2,50,000 |
5,00,000 |
10,00,000 |
20,00,000 |
1,10,00,000 |
|
Contribution of G.P.F. |
45,000 |
50,000 |
1,00,000 |
1,00,000 |
1,00,000 |
Computation of Total Income and tax payable thereon
|
Particulars |
Rupees (i) |
Rupees (ii) |
Rupees (iii) |
Rupees (iv) |
Rupees (v) |
|
Gross Salary |
2,50,000 |
5,00,000 |
10,00,000 |
20,00,000 |
1,10,00,000 |
|
Less: Deduction U/s 80C |
45,000 |
50,000 |
1,00,000 |
1,00,000 |
1,00,000 |
|
Taxable Income |
2,05,000 |
4,50,000 |
9,00,000 |
19,00,000 |
1,09,00,000 |
|
|
|
|
|
|
|
|
(A) Tax thereon |
Nil |
18,000* |
1,05,000 |
3,95,000 |
3095000 |
|
Surcharge |
|
|
|
|
3095000 |
|
Add: (i) Education Cess @ 2%. (ii) Secondary and Higher Education Cess @1% |
Nil Nil |
360 180 |
2100 1050 |
7,900 3950 |
68,090 34,045 |
|
Total tax payable |
Nil |
18,540 |
1,08,150 |
406850 |
35,06,635 |
|
|
|
|
|
|
|
|
(B) TDS under sec. 206AA in case where PAN is not furnished by the employee |
Nil |
38,000 |
1,30,000 |
406850 |
35,06,635 |
* include Rebate of Rs 2000 u/s 87A
Example 2
For Assessment Year 2016-17
Calculation of Income Tax in the case of an employee below the age of sixty years having a handicapped dependent (With valid PAN furnished to employer).
|
S.No. |
Particulars |
Rupees |
|
1 |
Gross Salary |
4,20,000 |
|
2 |
Amount spent on treatment of a dependant, being person with disability (but not severe disability) |
7000 |
|
3 |
Amount paid to LIC with regard to annuity for the maintenance of a dependant, being person with disability( but not severe disability) |
60,000 |
|
4 |
GPF Contribution |
25,000 |
|
5 |
LIP Paid |
10,000 |
|
6 |
Interest Income on Savings Account |
12,000 |
Computation of Tax
|
S.No. |
Particulars |
Rupees |
|
1 |
Gross Salary |
4,20,000 |
|
2 |
Add: Income from Other Sources Interest Income on Savings Account |
Rs 12,000 |
|
3 |
Gross Total Income |
4,32,000 |
|
4 |
Less: Deduction U/s 80DD (Restricted to Rs.60,000/- only) |
60,000 |
|
5 |
Less: Deduction U/s 80C (i) GPF Rs.25,000/- (ii) LIP Rs.10,000/- = Rs.35,000/- |
35,000 |
|
6 |
Less: Deduction u/s 80TTA on Interest Income on savings account (restricted to Rs 10000/-) |
10000 |
|
7 |
Total Income |
3,27,000 |
|
8 |
Income Tax thereon/payable (includes Rebate of Rs 2000 as per Section 87A) |
5,700 |
|
9 |
Add: (i). cation Cess @2% (ii). Secondary and Higher Education Cess @1% |
114 57 |
|
10 |
Total Income Tax payable |
5,871 |
|
11 |
Rounded off to |
5,870 |
Calculation of Income Tax in the case of an employee below age of sixty years where medical treatment expenditure was borne by the employer (With valid PAN furnished to employer).
|
S.No. |
Particulars |
Rupees |
|
1 |
Gross Salary |
5,20,000 |
|
2 |
Medical Reimbursement by employer on the treatment of self and dependent family member |
35,000 |
|
3 |
Contribution of GPF |
20,000 |
|
4 |
LIC Premium |
20,000 |
|
5 |
Repayment of House Building Advance |
25,000 |
|
6 |
Tuition fees for two children |
60,000 |
|
7 |
Investment in Unit-Linked Insurance Plan |
30,000 |
|
8 |
Interest Income on Savings Account |
8,000 |
|
9 |
Interest Income on Time Deposit |
15,000 |
Computation of Tax
|
S.No. |
Particulars |
Rupees |
|
1 |
Gross Salary |
5,20,000 |
|
2 |
Add: Perquisite in respect of reimbursement of Medical Expenses In excess of Rs.15,000/- in view of Section 17(2)(v) |
20,000 |
|
3 |
Income from Other Sources i) Interest Income on Savings Account Rs 8,000 ii) Interest Income on Savings Account Rs 15,000 |
23,000 |
|
4 |
Gross Total Income |
5,63,000 |
|
5 |
a.Less: Deduction U/s 80C (i) GPF Rs.20,000/- (ii) LIC Rs.20,000/- (iii) Repayment of House Building Advance Rs.25,000/- (iv) Tuition fees for two children Rs.60,000/- (v) Investment in Unit-Linked Insurance Plan Rs.30,000/- Total =Rs.1,55,000/-
Restricted to Rs. 1,58,000/- b. Less: Deduction u/s 80TTA on Interest Income on savings account (restricted to Rs 8000/- – available only on Savings account interest) Rs 8000 Total deduction available Rs 1,58,000/- |
1,58,000 |
|
6 |
Total Income |
4,05,000 |
|
7 |
Income Tax thereon/payable (after rebate u/s 87A) |
15,800 |
|
8 |
Add: (i). cation Cess @2% (ii). Secondary and Higher Education Cess @1% |
276 138 |
|
9 |
Total Income Tax payable |
14,214 |
|
10 |
Rounded off to |
14,214 |
Illustrative calculation of House Rent Allowance U/s 10 (13A) in respect of residential accommodation situated in Delhi in case of an employee below the age of sixty years (With valid PAN furnished to employer).
|
S.No. |
Particulars |
Rupees |
|
1 |
Salary |
3,50,000 |
|
2 |
Dearness Allowance |
2,00,000 |
|
3 |
House Rent Allowance |
1,40,000 |
|
4 |
House rent paid |
1,44,000 |
|
5 |
General Provident Fund |
36,000 |
|
6 |
Life Insurance Premium |
4,000 |
|
7 |
Subscription to Unit-Linked Insurance Plan |
50,000 |
Computation of total income and tax payable thereon
|
S.No. |
Particulars |
Rupees |
|
1 |
Salary + Dearness Allowance + House Rent Allowance 3,50,000+2,00,000+1,40,000 = 6,90,000 |
6,90,000 |
|
2 |
Total Salary Income |
6,90,000 |
|
3 |
Less: House Rent allowance exempt U/s 10(13A): Least of: (a). Actual amount of HRA received= 1,40,000 (b). Expenditure of rent in excess of 10% of salary (including D.A. presuming that D.A. is taken for retirement benefit) (1,44,000-55,000) = 89,000 (c). 50% of Salary(Basic+ DA) = 2,75,000 |
89,000 |
|
|
Gross Total Income |
6,01,000 |
|
|
Less: Deduction U/s 80C (i) GPF Rs.36,000/- (ii) LIC Rs. 4,000 (iii) Investment in Unit-Linked Insurance Plan Rs.50,000/- Total =Rs.1,14,000/- |
90,000 |
|
3 |
Total Income |
5,11,000 |
|
|
Tax payable |
27,200 |
|
|
Add: (i). cation Cess @2% (ii). Secondary and Higher Education Cess @1% |
544 272 |
|
|
Total Income Tax payable |
28016 |
|
|
Rounded off to |
28020 |
For Assessment Year 2016-17
Illustrating valuation of perquisite and calculation of tax in the case of an employee below age of sixty years of a private company in Mumbai who was provided accommodation in a flat at concessional rate for ten months and in a hotel for two months ( With valid PAN furnished to employer).
|
S.No. |
Particulars |
Rupees |
|
1 |
Salary |
7,00,000 |
|
2 |
Bonus |
1,40,000 |
|
3 |
Free gas, electricity, water etc. (Actual bills paid by company) |
40,000 |
|
4(a) |
Flat at concessional rate (for ten month). @ Rs.36000/month |
3,60, 000 |
|
4(b |
Hotel rent paid by employer (for two month) |
1,00,000 |
|
4(c) |
Rent recovered from employee. |
60,000 |
|
4(d) |
Cost of furniture. |
2,00,000 |
|
5 |
Subscription to Unit Linked Insurance Plan |
50,000 |
|
6 |
Life Insurance Premium |
10,000 |
|
7 |
Contribution to recognized P.F. |
42,000 |
COMPUTATION OF TOTAL INCOME AND TAX PAID THEREON:
|
S.No. |
Particulars |
Rupees |
|
1 |
Salary |
7,00,000 |
|
2 |
Bonus |
1,40,000 |
|
3 |
Total Salary(1+2) for Valuation of Perquisites |
8,40,000 |
|
Valuation of perquisites |
||
|
4(a) |
Perquisite for flat: Lower of (15% of salary for 10 months=Rs.1,05,000/-) and (actual rent paid= Rs 3,60,000) i.e. Rs. 1,05,000 |
1,38,600 |
|
4(b) |
Perquisite for hotel : Lower of (24% of salary of 2 months=Rs 33,600) and (actual payment= Rs 1,00,000) i.e. Rs 33,600 |
|
|
4(c) |
Perquisites for furniture(Rs.2,00,000) @ 10% of cost Rs. 20,000 |
|
|
4(c)(i) |
Total of [4(a)+(b)+(c)] (1,05,000+ 33,600+ 20,000)Rs.158,600 Less: rent recovered (-)Rs. 60,000 = Rs. 98,600 |
|
|
4(d) |
Add Perquisite for free gas, electricity, water etc. Rs.40,000 (+) Rs 98,600 [4(c)(i)] = Rs1,38,600 Total perquisites |
|
|
5 |
Gross Total Income (Rs.8,40,000+ 1,38,600) |
9,78,600 |
|
6 |
Gross Total Income |
9,78,600 |
|
7 |
Less: Deduction U/s 80C: (i). Provident Fund (80C) :42,000 (ii). LIC (80C) :10,000 (iii). Subscription to Unit Linked Insurance Plan(80C) :50,000/- Total = 1,02,000 Restricted to Rs 1,02,000 u/s 80C |
1,02,000 |
|
8 |
Total Income |
8,76,600 |
|
9 |
Tax Payable |
1,00,320 |
|
10 |
Add: (i). cation Cess @2% (ii). Secondary and Higher Education Cess @1% |
2,006 1,003 |
|
11 |
Total Income Tax payable |
1,03,329 |
|
12 |
Rounded off to |
1,03,330 |
Example 6
For Assessment Year 2016-17
Illustrating Valuation of perquisite and calculation of tax in the case of an employee below the age of 60 years of a Private Company posted at Delhi and repaying House Building Loan ( With valid PAN furnished to employer).
|
S.No. |
Particulars |
Rupees |
|
1 |
Salary |
4,00,000 |
|
2 |
Dearness Allowance |
1,00,000 |
|
3 |
House Rent Allowance |
1,80,000 |
|
4 |
Special Duties Allowance |
12,000 |
|
5 |
Provident Fund |
60,000 |
|
6 |
LIP |
10,000 |
|
7 |
Deposit in NSC VIII issue |
30,000 |
|
8 |
Rent Paid by the employee for house hired by her |
1,20,000 |
|
9 |
Repayment of House Building Loan (Principal) |
60,000 |
|
10 |
Tuition Fees for three children (Rs.10,000 per child) |
30,000 |
Computation of total income and tax payable thereon
|
S.No. |
Particulars |
Rupees |
|
1 |
Gross Salary (Basic+DA+HRA+SDA) |
6,92,000 |
|
|
Less: House rent allowance exempt U/s 10 (13A) Least of: (a). Actual amount of HRA received. :Rs.1,80,000 (b). Expenditure on rent in excess of 10% of salary (Including D.A.)assuming D.A. is included for retirement benefits (1,20,000- 50,000) :Rs. 70,000 (c). 50% of salary (including D.A) : Rs. 2,50,000 |
70,000 |
|
2 |
Gross Total Taxable Income |
6,22,000 |
|
|
Less: Deduction U/s 80C (i). Provident Fund : 60,000 (ii). LIP : 10,000 (iii). NSC VIII Issue : 30,000 (iv). ayment of HBA : 60,000 (v). Tuition Fees (Restricted to two children) : 20,000 Total : 1,80,000 Restricted to 1,50,000 |
1,50,000 |
|
|
Total Income |
4,72,000 |
|
|
Income Tax thereon/payable |
20,200 |
|
|
Add: (i). cation Cess @2% (ii). Secondary and Higher Education Cess @1% |
404 202 |
|
|
Total Income Tax payable |
20,806 |
|
|
Rounded off to |
20,810 |
Example 7
For Assessment Year 2016-17
A. Calculation of Income tax in the case of a retired employee above the age of sixty years but below the age of 80 years and having gross pension of:
iv) Rs.4,50,000/-,
v) Rs.8,00,000/- ,
vi) Rs. 12,50,000/-.
B What will be the amount of TDS in case of above employees, if PAN is not submitted by them to their DDOs/Offices:
|
Particulars |
Rupees (i) |
Rupees (ii) |
Rupees (iii) |
|
Gross Pension |
4,50,000 |
8,00,000 |
12,50,000 |
|
Contribution of P.P.F. |
70,000 |
1,00,000 |
1,50,000 |
Computation of Total Income and tax payable thereon
|
Particulars |
Rupees (i) |
Rupees (ii) |
Rupees (iii) |
|
Gross Pension |
4,50,000 |
8,00,000 |
12,50,000 |
|
Less: Deduction U/s 80C |
70,000 |
1,00,000 |
1,50,000 |
|
Taxable Income |
3,80,000 |
7,00,000 |
11,00,000 |
|
|
|
|
|
|
Tax thereon (after rebate u/s 87A) |
6,000 |
60,000 |
1,50,000 |
|
Add: (i) Education Cess @ 2%. (ii) Secondary and Higher Education Cess @1% |
120 60 |
1200 600 |
3000 1500 |
|
Total tax payable |
6,180 |
61,800 |
1,54,500 |
|
|
|
|
|
|
TDS under sec. 206AA in case where PAN is not furnished by the employee |
24,000 |
90,000 |
1,70,000 |
Example 8
For Assessment Year 2016-17
A. Calculation of Income tax in the case of a retired employee above the age of 80 years and having gross pension of:
i) Rs.5,00,000/-,
ii) Rs.8,00,000/- ,
iii) Rs. 12,50,000/-.
B What will be the amount of TDS in case of above employees, if PAN is not submitted by them to their DDOs/Offices:
|
Particulars |
Rupees (i) |
Rupees (ii) |
Rupees (iii) |
|
Gross Pension |
5,00,000 |
8,00,000 |
12,50,000 |
|
Contribution of P.P.F. |
80,000 |
1,20,000 |
1,50,000 |
Computation of Total Income and tax payable thereon
|
Particulars |
Rupees (i) |
Rupees (ii) |
Rupees (iii) |
|
Gross Pension |
5,00,000 |
8,00,000 |
12,50,000 |
|
Less: Deduction U/s 80C |
80,000 |
1,20,000 |
1,50,000 |
|
Taxable Income |
4,20,000 |
6,80,000 |
11,00,000 |
|
|
|
|
|
|
Tax thereon |
Nil |
36,000 |
1,30,000 |
|
Add: (i) Education Cess @ 2%. (ii) Secondary and Higher Education Cess @1% |
|
720 360 |
2600 1300 |
|
Total tax payable |
Nil |
37,080 |
1,33,900 |
|
|
|
|
|
|
B. TDS under sec. 206AA in case where PAN is not furnished by the employee |
Nil |
37,080 |
1,33,900 |
Example 9
Exemption u/s 10 (13A)
1. Mr. A, employed with XYZ Ltd. Up to 31.10.2015, received following emoluments :
|
S.No. |
Particulars |
Rupees |
|
1. |
Basic pay p.m. |
13,000 |
|
2. |
Bonus for the year received in July, 2015 |
72,000 |
|
3. |
Club facility (for private use only) Expenditure by employer p.m. |
700 |
|
4. |
House Rent Allowance p.m. |
2,800 |
|
5. |
Employer’s contribution to URPF p.m. (Mr. A also made equal contribution) |
1,000 |
|
W.e.f. 01.11.2015, Mr. A joined PQR Ltd., with following pay package : |
||
|
1. |
Basic pay p.m. |
18,000 |
|
2. |
House Rent Allowance p.m. |
1,600 |
|
3. |
Club Facility (for private use only) Expenditure by employer p.m. |
1,100 |
|
4. |
Use of car for journey between office and residence – Employer’s expenditure p.m. |
600 |
|
5. |
Employer’s contribution to RPF p.m. (Mr. A also made equal contribution) |
2,000 |
|
Other particulars of Mr. A are as under : |
||
|
1. |
Mr. A resides at Amritsar paying a monthly rent of |
3,500 |
|
2. |
Mr. A’s income from other sources |
95,000 |
|
3. |
Mr. A contributed to LIC/PPR/NSC etc. |
20,000 |
|
Compute Mr. A’s taxable income and tax liability for A.Y. 2016-17. |
||
Computation of Tax
|
S.No. |
Particulars |
Rupees |
|
|
1. |
Income from Salary |
|
|
|
|
(a) From XYZ Ltd. |
|
|
|
|
Basic pay (Rs.13,000 x 7) |
91,000 |
|
|
|
Bonus |
7,200 |
|
|
|
Club facility (Rs.700 x 7) |
Rupees |
4,900 |
|
|
H.R.A. (Rs.2,800 x 7) |
19,600 |
|
|
|
Less : Exempt u/s 10(13A) |
15,400 |
4,200 |
|
|
Employer’s Contribution to U.R.P.F. |
|
1,07,300 |
|
|
(b) From PQR Ltd. |
Rupees |
|
|
|
Basic pay (Rs.18,000 x 5) |
90,000 |
|
|
|
H.R.A. (Rs.1,600 x 5) |
8,000 |
|
|
|
Less : Exempt u/s 10(13A) |
8,000 |
|
|
|
Club Facility (Rs.1,100 x 5) |
5,500 |
|
|
|
Facility of Car (not taxable as perquisite) |
15,400 |
|
|
|
Employer’s Contribution to R.P.F. |
95,500 |
|
|
|
Gross Salary |
2,02,800 |
|
|
|
Less: Deduction |
—– |
|
|
|
Net Salary |
2,02,800 |
|
|
2. |
Income from Others Sources |
95,000 |
|
|
|
Gross Total Income |
2,97,800 |
|
|
|
Less : Deduction u/s 80C |
|
|
|
|
: Contribution to LIC/PPF/NSC |
Rs. 20,000 |
|
|
|
: Contribution to RPF ( Rs.2000 x 5) |
Rs. 10,000 |
30,000 |
|
|
Total Income |
2,67,800 |
|
|
|
Computation of Tax Liability |
|
|
|
|
Tax payable on Rs.2,67,800 |
1,780 |
|
|
|
Less : Rebate u/s 87A |
1,780 |
|
|
|
Net Income-tax payable |
Nil |
|
|
|
Add : Surcharge |
Nil |
|
|
|
Add : EC @ 2% |
— |
|
|
|
Add : S&HEC @ 1% |
— |
|
|
|
Total Tax Payable |
Nil |
|
Example 10
2. One Computation of Taxable Salary and allowances, Deduction for Interest on Housing Loan and Deduction u/s 80C.
Mr. X, a Central Govt. Officers in Delhi, is receiving Basic Pay Rs.23,720, grade Pay Rs.7,600, DA at prescribed rates, transport allowances @ Rs.3200+DA thereon, and HRA 30% of basic pay + grade pay (though living in his own house). His date of increment is Ist July. The following are other particulars of his income. Compute his taxable income and tax payable, for A.Y.2015-16.
|
S.No. |
Particulars |
Rupees |
|
1. |
Honorarium for valuation of answer books of a departmental examination |
3,000 |
|
2. |
Fee for work done for a private body (1/3rd of fees has been retained by Govt.) |
6,000 |
|
3. |
Contributions to G.P.F. p.m. |
4,700 |
|
4. |
Postal Life Insurance Premium financed from G.P.F. p.m. |
280 |
|
5. |
Contribution to Central Govt. Employees Group Insurance Scheme p.m. |
500 |
|
6. |
Life Insurance Premium (being a Life Insurance Policy of Rs.1,00,000 taken in name of his wife before 1.04.2012) |
10,500 |
|
7. |
Contribution to Public Provident Fund |
10,000 |
|
8. |
Repayment of HDFC loan borrowed after 1.04.1999 EMI Rs.25,000 (Towards loan Rs.95,000, towards interest Rs.2,05,000) |
3,00,000 |
Computation of Tax
|
S.No. |
Particulars |
Rupees |
|
|
1. |
Income from Salary |
|
|
|
|
Basic Pay @ Rs 23,720 p.m |
|
|
|
|
(March to June ’14) |
94,880 |
|
|
|
@ Rs 24,660 p.m * (July 2014 to Feb 2015) |
1,97,280 |
2,92,160 |
|
|
|
|
91,200 |
|
|
Grade Pay @ Rs 7,600 p.m |
|
|
|
|
Dearness Allowance |
|
|
|
|
1.3.2014 to 30.06.2014 @ 100% i.e., Rs 31,320 p.m |
1,25,280 |
|
|
|
1.7.2014 to 31.12.2014 @ 107% i.e. Rs 34,518 p.m |
2,07,108 |
|
|
|
1.1.2015 to 28.02.2015 @ 113% (assumed) i.e., |
|
|
|
|
Rs. 36,454 p.m |
72,908 |
4,05,296 |
|
|
House Rent Allowance |
|
|
|
|
@ 30% of basic pay + grade pay |
|
|
|
|
1.3.2014 to 30.06.2014 @ Rs 9,396 |
33,584 |
|
|
|
1.07.2014 to 28.2.2015 @ Rs 9,678 |
77,424 |
1,15,008 |
|
|
|
|
|
|
|
Transport Allowance |
|
|
|
|
1.3.2014 to 30.6.2014 @ Rs 6,400 p.m |
25600 |
|
|
|
1.7.2014 to 31.12.2014 @ Rs 6,624 p.m |
39,744 |
|
|
|
1.1.2015 to 28.2.2015 @ Rs 6,816 p.m |
13,632 |
|
|
|
|
78,976 |
|
|
|
Less: Exempt u/s 10(14) @ 800 p.m |
9600 |
69,376 |
|
|
|
|
9,73,040 |
|
|
Honorarium |
3,000 |
|
|
|
Fees (2/3 retained by him) |
4000 |
|
|
|
Total Salary |
9,80,040 |
|
|
|
Less: Standard Deduction |
– |
|
|
|
Net Salary |
9,80,040 |
|
|
2. |
Income from House Property |
|
|
|
|
Self-occupied u/s 23(2)(a) deemed at nil |
|
|
|
|
Less: Interest on HDFC Loan |
2,00,000 (-) |
2,00,000 |
|
|
Gross Total Income |
|
7,80,040 |
|
|
Less: Deduction u/s 80 C |
|
|
|
|
– GPF @ Rs 4,700/-p.m |
56,400 |
|
|
|
– CGEGIS @ Rs 500/- p.m |
6,000 |
|
|
|
– Life Insurance Premium |
10, 500 |
|
|
|
– Repayment of HDFC Loan |
95,000 |
|
|
|
– Deposit in Public Provident Fund |
10,000 |
|
|
|
1,77,900 |
|
|
|
|
|
1,50,000 |
|
|
|
Restricted to a maximum of Taxable Income |
6,30, 040 |
|
|
|
|
|
|
|
|
Computation of Tax Liability |
|
|
|
|
Tax payable |
51,008 |
|
|
|
Add: Surcharge |
– |
|
|
|
Add: Education Cess |
1020 |
|
|
|
Total Tax Liability |
52,538 |
|
Signed Copy Click here