To calculate income tax for FY 2014-15 based on the latest budget changes, follow these steps:
Step 1: Determine the basic exemption limit based on the individual's age group:
- For individuals (excluding senior citizens), the limit is now Rs. 2.50 lakhs.
- For senior citizens aged between 60 to 80 years, the limit is Rs. 3 lakhs.
Step 2: Consider the enhanced limit under Section 80C for deductions:
- The deduction limit under Section 80C has been increased from Rs. 1 lakh to Rs. 1.50 lakhs. Ensure to factor this into your calculations.
Step 3: Account for the revised housing interest deduction:
- The interest deduction limit for self-occupied properties has been raised to Rs. 2 lakhs from the previous Rs. 1.50 lakhs.
Step 4: Calculate your taxable income by subtracting the exemptions and deductions from your total income.
Step 5: Use the revised income tax slabs to determine the applicable tax rate based on your taxable income.
Step 6: Apply the tax rate to your taxable income to calculate the total income tax due for FY 2014-15.
By following these steps, salaried employees in both the government and private sectors can accurately calculate their income tax liability for the specified financial year.