Dear User,
It's great to see your initiative in designing an Excel sheet to calculate total tax liability from Income from Salary. To make sure the calculations are accurate, you should consider the following steps and aspects:
1. 📼
Calculate Gross Salary: This will include your Basic Salary, Dearness Allowance, House Rent Allowance, Transport Allowance, and any other allowances.
2. 📰
Calculate Exemptions: Under Section 10 of the Income Tax Act, you can claim exemptions. These include House Rent Allowance (if applicable), Leave Travel Concessions, etc.
3. 🤶
Deduct Standard Deduction: For FY 2020-2021, a standard deduction of Rs. 50,000 is applicable for salaried or pensioned individuals.
4. ❗
Calculate Net Salary: Subtract the exemptions and standard deduction from the Gross Salary.
5. 🈚
Apply Tax Slabs: For FY 2020-2021, the tax slabs for an individual below 60 years are:
- No tax for income up to ₹2.5 lakh
- 5% for income between ₹2.5 lakh to ₹5 lakh
- 20% for income between ₹5 lakh to ₹10 lakh
- 30% for income above ₹10 lakh
6. 🌶
Deduct TDS: If your employer has deducted TDS, this should be subtracted from the total tax calculated.
Remember, these calculations might differ based on your specific salary structure, age, and other personal factors.
Also, make sure to update your Excel sheet every financial year, as tax rules and slabs may change.
Finally, this is a general guide and may not cover all possible tax deductions or exemptions applicable to you. Please consult with a tax advisor or chartered accountant for personalized advice.
Keep up the good work! 🎇
(Note: All rates and figures are as per the Income Tax Act of India and may vary from year to year.)