Confused About Income Tax Calculation Based on Joining Date? Let's Clarify Together

Dear HR friends, I want to understand how income tax is calculated. As per my knowledge, tax will be calculated based on the date of joining and on the gross income. Please correct me if I am wrong.

Example Calculation

For example, if an employee joined in October '13 and the offered package is 380,000, is he eligible for income tax? My calculation is as follows: 380,000 / 6 = 63,333 (calculated based on the date of joining). Then he is out of tax for the financial year '13.

Is the above calculation correct? Kindly help me understand how to calculate it.

Regards,
Dilep.A

While deducting TDS, his earnings from his previous employer and the tax deducted already have also to be taken into account.

Income Tax Calculation Based on Gross Earnings

Tax will be calculated based on his gross earnings since the date of joining (DOJ). For example, 380,000/12 = 31,666 * 6 = 190,000. Professional Tax (PT) Paid, Conveyance Allowance Paid (Max 800/month), House Rent Allowance (HRA) Paid, and Section 80C deductions should be considered. I hope your doubt is cleared.

Regards,
MS Hegde.

If the concerned employee has given the declaration about his income from earlier employment, then that should be added. In your case, the CTC is Rs. 3,80,000. Hence, for 6 months, i.e., Rs. 1,90,000, it is not taxable. But if he is declaring his earlier income, then it will cross Rs. 2,00,000, and it will become taxable as per rules.

When computing income, please consider his Traveling Allowance (i.e., as per I.T. Transport to reaching office maximum to Rs. 800.00 without any proof) and Professional Tax deducted if any.

Regards,
Ramakant