IT Deductions

What amount would be deducted from a ctc of 2.2 lpa?

Dear Mr.bandaru,
what is the percentage IT deduction for the given CTC slab?
regards,
tulaci

Annual Income : 220000 - Non taxable Slab Amount up to for Male : 160000 / Female : 190000
Tax on the next Rs.60000 (Slab Rs.160000 - Rs.5 lakhs) , Tax Rate :10% , Tax Payable : Rs.6000 & Education 3 % on Tax Payable : 180
Total : 6180 /12 : 515
Total Tax Liability : 515/-

Dear Mr.Bandaru,
Thank you very much for the reply. I assumed that 10% is deducted straight away from the CTC. Thanks for sharing IT basics.
Regards,
tulaci

1. For Gentlemen, the exempt is for the first Rs 1,80,000 - NOT Rs 1,60,000. (This is per the Financial Bill passed in May 2011 for the Assessment Year 2012-2013).
2. If the CTC is 2,21,000 pa (as given by Uday), only 41,000 is taxable at the rate of 10% (Rs 4100 pa or Rs 342 pm). However, the statutory deduction towards EPF (if this is there) is to be deducted from the taxable amount (41,000). Also, Conveyance Allowance (iF given) is exempted to the extent of Rs 9,600 pa (Rs 800 pm).
3. Therefore, the true picture will emerge only when the break down of the CTC is given. There is lots of scope to reduce the taxable income to nil in this case by investing in PPF or MediClaim etc etc.
Rajusiachen

I fully agree with Rajusiachen, he suggested like a chartered accountant and can save the consultation fee for Tulci.
Ashok

I would like to give clarification to the best of my knowledge.

As highlighted above for a CTC of Rs.2.20 lacs - first of break up is to be given.

Even considering no break up following deductions are permissible under IT :

Professional Tax = exempted

Provident fund contribution of employee = exempted

Rs.800/- per month x 12 = 9600/- exempted no proof required

Rs.1250/- per month or Rs.15000/- per annum (bills required in the name of employee) = exempted

then, HRA as per HRA exemptions (there are 3 rules and whichever is lower amount worked out) = ... that amount is exempted.

Then comes your LIC, or any other Insurance Premiums being paid - under 80C exempted upto a maximum of 1.00 lacs.

then exemption under 80D to be seen - that is upto a max of 150000

after all these exemptions / deductions for a salary of Rs.2.20 lacs - I don't feel any tax liability will come becuase the employee's taxble income will certainly fall below the "Nil" tax upto Rs.1.80 lacs (or rs.1.60 lacs .. whatever it is).

Sundar