Thank you Punithaji for your excellent work. But this is applicable for the Financial Year 2009-10 for which the deductions are already over. Now it is time to plan for the Financial Year 2010-11 (Assessment Year 2011-12). Also, the above Excel sheet is meant for the General Category, i.e., Non-Senior Male. What about Females & Senior Citizens.
Hence, I shall insert an Excel worksheet (but comparatively simple) for Income Tax Calculation on salary for the Financial Year 2010-11 (Assessment Year 2011-12). Prior to that, I wish to explain some details to get an idea to enter the inputs.
On gross salary, the following deductions are applicable:
1. Professional Tax
2. House Rent in excess of 1/10th of salary subject to ceiling equivalent to HRA
3. Interest on Housing loan subject to ceiling Rs. 1,50,000
4. Refund on Housing loan, savings, tuition fee for 2 children, etc., altogether subject to ceiling Rs. 100,000
5. In addition, savings on infrastructure bonds up to Rs. 20,000
6. Other than the above one lakh, 15000 to 20000 towards mediclaim premium, 40000 to 60000 towards treatment on specified diseases like Motor Neuron disease, 75000 to 100,000 towards disability, etc., are also admissible for deduction.
The details can be obtained from the following website: [CENTRAL GOVERNMENT EMPLOYEES NEWS: New Income Tax Slab for FY 2010-11](http://90paisa.blogspot.com/2010/03/new-income-tax-slab-for-fy-2010-11.html)
Now, taxable income can be calculated as follows:
Gross salary - total deductions = Taxable income
Taxpayer can be categorized into 3 categories:
1. Non-Seniors - Male
2. Non-Seniors - Female
3. Senior Citizens (65 years old & above)
If the taxable income is Rs. 2,40,000, a Senior Citizen is fully exempted from paying tax. Non-Senior Female has to pay in excess of Rs. 1,90,000 & Non-Senior Male in excess of Rs. 1,60,000.
Beyond the above income, one has to pay 10% up to Rs. 5,00,000, 20% thereafter up to Rs. 8,00,000, and 30% in excess of Rs. 8,00,000. In addition, an education cess @ 3% will be charged on the Total Tax.
I shall quote an example:
Gross income of a Non-Senior Male - Rs. 12,00,000
Deductions (actual): Professional Tax - 12000, Housing loan interest - 2,00,000, Total savings/deductions - 2,50,000, Savings on Infrastructure bond - 25,000, other deductions over 1,00,000 - 50,000.
Admissible total deductions (subject to ceiling limits) - 12000 + 150000 + 100000 + 20000 + 50000 = 332000
Taxable income, 1200000 - 332000 = 868000
For Non-Senior Male:
Rs. 1,60,000 is exempted.
For the next 340000 (500000-160000), 340000 x 10% = 34000 -(1)
For the next 300000 (800000-500000), 300000 x 20% = 60000 -(2)
For the next 68000 (868000-800000), 68000 x 30% = 20400 -(3)
Tax - (1) + (2) + (3) = 114400
Also, For Non-Senior Female Tax is 114400 - 3000 = 110400
and Senior Citizens Tax is 114400 - 8000 = 106400
Education Cess, 114400 * 3% = 3432.
Total Tax - Rs. 1,17,832
See Excel Sheet. Enter gross salary and deductions/savings applicable in the green colour column. Results will be occurred in the yellow colour. The red colour is used for static data.
ABBAS.P.S,
Secretary,
ITI Employees' Association,
ITI Ltd, PALAKKAD - 678 623,
KERALA, INDIA.
Ph. +91 9447 467 667