Calculating Employee Income Tax from CTC: Can You Help Me Figure It Out?

Dear all,

I require your help on how to calculate income tax (IT) for an employee based on their CTC. I am awaiting a reply.

Regards,
Satya

Hi Satya,

I hope this link will be somewhat useful for you:

[Personal Income Tax reduced - New Slabs as per Budget 2008 - Income Tax 2008, tax slabs](http://whatyouwant.in/show_want.php?id=693)

Please let me know if you have any questions or need further assistance.

Dear Satya,

As per your post, IT is calculated in CTC. I assume you are familiar with the slabs of IT. Also, you should be aware of exemptions. Please send me your email address, and I will forward the material to you.

Thank you.

Hi,

There are many factors that we need to consider while calculating income tax (IT) on salary. Usually, IT on salary is calculated and deducted in the form of TDS each month from the salary. This is mandatory for every company. If it is not done, the company will be liable to pay interest as well as penalties.

First of all, please note that IT on salary is not calculated on Cost to Company (CTC). It is always calculated on the net taxable income. I have provided an example of IT calculation in the attached Excel sheet. It is based on some assumptions and will vary if any of the assumptions change. I am also attaching a sheet showing the rates and possible exemptions from tax. In case of any doubt, please email me.