Hi Asha,
As a practice, organizations deduct provisional income tax on monthly basis based upon the expenses and savings declaration given by the employee at the beginning of every financial year. In Jan every year they ask employees to submit the proof of their expenses and savings. If employees fail to submit the same, payroll recalculate the income tax based upon availability of proof and recover more tax in next two-three months. There is no hard & fast rule that income tax would be same for all people drawing 2L or 3 L or above. It all depends upon their expenses & savings.
There are different slabs for income tax for the Financial Year 2007-08. E.g.
Income upto 1.10L - Nil (for Male), 1.45L - Nil (for Female)
1.10 to 1.5L - 10% (For Male), 1.45 to 1.5L - 10% (for Female)
1.5 to 2.5 L - 20%
2.5L & above 30%
Please note that income is not the gross salary.
Income = Gross salary - expenses (e.g.HRA, CCA,Children Allw, Med reim, refreshment all etc) - Savings (PF, PPF, LIC, Mutual fund, Houseloan etc..etc..)- Statutory Deduction (ESI, P.Tax).
Pls refer computation of Income tax on salaries from Income tax book for details.
Pls remember that income tax rules changes every year according to Finance budget.
Regards,
Anup