Understanding Salary Deductions: How Much Will Be Taken from a 2.2 LPA CTC?

What amount would be deducted from a CTC of 2.2 LPA?

What is the percentage of IT deduction for the given CTC slab?

Regards,
Tulaci

Annual Income and Tax Calculation

Annual Income: ₹220,000
- Nontaxable Slab Amount for Males: ₹160,000
- Nontaxable Slab Amount for Females: ₹190,000

Tax on the next ₹60,000 (Slab ₹160,000 - ₹5 lakhs):
- Tax Rate: 10%
- Tax Payable: ₹6,000

Education Cess:
- 3% on Tax Payable: ₹180

Total Tax: ₹6,180
Monthly Tax Liability: ₹6,180 / 12 = ₹515

Total Tax Liability: ₹515/-

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

Tax Exemption Details for Gentlemen

1. For gentlemen, the exemption is for the first Rs 1,80,000, not Rs 1,60,000. (This is as per the Financial Bill passed in May 2011 for the Assessment Year 2012-2013).

2. If the CTC is Rs 2,21,000 per annum (as provided by Uday), only Rs 41,000 is taxable at the rate of 10% (Rs 4,100 per annum or Rs 342 per month). However, the statutory deduction towards EPF (if applicable) is to be subtracted from the taxable amount (Rs 41,000). Additionally, Conveyance Allowance (if provided) is exempted to the extent of Rs 9,600 per annum (Rs 800 per month).

3. Therefore, the true picture will emerge only when the breakdown of the CTC is given. There is a lot of scope to reduce the taxable income to nil in this case by investing in PPF or MediClaim, etc.

Regards,
Rajusiachen

I would like to give clarification to the best of my knowledge. As highlighted above, for a CTC of Rs. 2.20 lakhs, the first breakup is to be given.

Even considering no breakup, the following deductions are permissible under IT:

- Professional Tax = exempted
- Provident fund contribution of the employee = exempted
- Rs. 800/- per month x 12 = Rs. 9600/- exempted, no proof required
- Rs. 1250/- per month or Rs. 15000/- per annum (bills required in the name of the employee) = exempted

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

Then comes your LIC, or any other Insurance Premiums being paid - under 80C exempted up to a maximum of Rs. 1.00 lakh.

Then exemption under 80D to be seen - that is up to a maximum of Rs. 150000.

After all these exemptions/deductions for a salary of Rs. 2.20 lakhs, I don't feel any tax liability will come because the employee's taxable income will certainly fall below the "Nil" tax up to Rs. 1.80 lakhs (or Rs. 1.60 lakhs... whatever it is).

Regards, Sundar