Explain how much Tax will be deducted on an annual Salary of Rs. 600000 - breakup and formula's. (No PF deductions)

Good day, everyone. Can anyone please explain how much tax will be deducted on an annual salary of Rs. 600,000? I would appreciate it if you could help me with the breakup and formulas. (No PF deductions)

If your annual income from all sources is Rs 600,000, the tax can be worked out by referring to the following tax slabs for Men Below 60 Years of Age:

Income Tax Slab Income Tax Rate

Income up to Rs. 2,50,000 Nil

Income between Rs. 2,50,001 - Rs. 500,000 - 10% of Income exceeding Rs. 2,50,000

Income between Rs. 500,001 - Rs. 10,00,000 - 20% of income exceeding 500,000

For the first Rs 250,000, no tax is applicable. For the next Rs 250,000, a 10% tax of Rs 25,000 is applicable. For the last Rs 100,000, a 20% tax of Rs 20,000 applies, making the total tax Rs 45,000.

However, it is important to consider adding interest on the SB account and taking deductions into account.

If your Rs. 6.00 L annual income (salary) is gross, you should provide the following details:

1. Is this for 2015-16 or for an earlier period?
2. HRA received as a part of salary and House Rent paid for the full year (1.4.15 to 31.3.16).
3. Does it include any perks other than basic, DA, regular allowance? If yes, indicate details.
4. Any other incomes like dividends, interest on investments such as bank FDs, SB accounts. Also, indicate your savings including:
- Premium paid towards LIC, medical insurance, NSC, Mutual funds, 5 yrs. bank FDs, Infra.bonds.
- Children's Education - tuition fees.
- Any house building loans taken from banks, EMI refunded with a break-up towards principal and interest (to be supported by a bank certificate).
- Medical expenses/premium incurred on self, family, dependent parents, and handicapped.
- Contribution towards PPF and other pension funds.
- TDS and advance tax remitted/recovered by your office so far. If not, you are liable for some interest on delay.

You can use this IT Department link for calculating your tax liability yourself:

[Income and Tax Calculator](http://www.incometaxindia.gov.in/Pages/tools/income-tax-calculator.aspx)

You need to give the details of your salary breakdown headwise, such as basic salary, house rent, etc. Also, provide information about the amount you are paying for house rent, expenses for school-going children, as well as details of your savings under sections 80C and 80D for calculation purposes.

Hello All,

I need guidance. I am working in a startup company in Delhi, which recently registered (three months back) itself and till date not generating any revenue. The company is in the investment phase now. We are 15 employees, whose salaries range from 10k to 75k monthly. There is no PF registration, hence no PF deduction.

My question is, should we deduct tax from the salary of employees who fall into the tax bracket? How should I design the employee salary breakup to minimize the tax burden? Should we deduct professional tax too?

Thank you for your valuable advice.

IT as TDS is deductible from all those employees whose income falls within the taxable bracket. To do this, you should estimate the annual taxable income now and deduct TDS proportionately, remitting it to the government account using relevant challans. This can be done online or by cheque payment through banks. Utilize the portals mentioned elsewhere in this post for estimation purposes. However, it is unlikely that many of you will escape this obligation for the current year, as salaries are only for a few months during the current year ending on 31.3.16. I believe your company should have already obtained the PAN/TAN numbers, without which you cannot remit the TDS.

From the company's perspective, as there has been no revenue so far, there will be no IT and advance tax in respect of the company. If you have already raised invoices, this should be accounted for as "Income," forming part of your Profit and Loss Account to determine taxable income; please check this. If there is a profit, there won't be much IT liability. Therefore, there is nothing to worry about for the current year. Consult your auditors for clarification on these matters before you can relax.

Regarding PF, since you already have 15 employees, you should register with EPFO immediately, recover PF from covered employees, and remit it along with the company's contribution. Additionally, consider ESI; examine this aspect as well.

For Professional Tax (PT) in Delhi, PT is not currently in effect. Verify this information and confirm it with your ACTO/VAT officer.

You can think of Professional Tax:

The first step is to get registered as a ‘payee’ of professional tax in the local Professional Tax Office under the respective State’s Act. This is mandatory for all individuals, persons and bodies who are liable to pay professional tax.

As to calculation and payment of these taxes through prescribed forms and methods, you have to do it yourself. Your calculation and payment has to be audited and certified by a Chartered Accountant.

When it comes to employees however, it is the duty of the employer to deduct Professional Tax. That is, apart from paying professional tax for its own activities, every employer has to calculate, deduct and pay the professional tax on the salaries paid to employees.

Professional tax, like Income Tax, follows an slab rate method (based on how much you earn) to ensure taxes are levied equitably.

Regarding Provident Fund:

If there are 20+ permanent employees in your company, then you should start working on PF deduction. Else with less than 20 employees you can do it voluntarily but it is not mandatory.

Hope this helps you to get your answer.