Understanding Salary Taxation: Which Parts of Your Paycheck Are Taxable and How?

Hi Sir,

I would like to know what components of the salary are taxable. For example, CTC is divided into Basic, HRA, Conveyance, etc. Are these components taxable (basic and HRA) apart from special allowance? Please help me with this. Also, how is income tax calculated, what are the slabs, and will it be calculated on the special allowance left after basic, HRA, and conveyance? I would be grateful if you could assist me with this.

I am curious to know whether the basic salary is taxable and how much of the special allowance is taxable. For instance, if the CTC of ABC is 20,000 PM, then the salary breakdown will be as follows:

Basic Salary - 8000

HRA (Metro) - 4000

Conveyance - 800

PF Contribution gets deducted for both the employer and employee, and then the rest goes to Special allowance.

I would like to know how much tax amount will be applicable to ABC and how much he needs to pay as tax.

Regards

Hi!

The CTC is divided as follows:
- Basic
- HRA
- DA
- Medical allowance
- Transport allowance
- Special allowance

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Gross salary
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- Employer contribution to PF
- Employer contribution to ESI
- Perks (credit cards, free meals, telephone charges, free house, water, electricity supply, etc.)

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CTC
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Gross salary:
Less:
1) Employer contribution to PF
2) Employer contribution to ESI
3) Professional tax
4) TDS

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Net salary
--------------

Please find the attached tax calculation slab:
Income Tax %
Up to 110,000 0
110,000-150,000 10%
150,000-250,000 20%
Above 250,000 30%

Have a nice day.

Ram

Tax Query

Can I show my wife's education and medical expenses as deductions on my tax return?

Yes, you can typically claim deductions for education and medical expenses incurred by your spouse if you meet certain criteria. Make sure to keep detailed records and consult with a tax professional to ensure you are following the correct procedures. It's important to accurately report all relevant information to avoid any issues with the tax authorities.

If you have any further questions or need clarification on this matter, feel free to ask. Proper documentation and compliance with tax regulations are crucial when claiming deductions for expenses related to education and medical purposes.

The income tax slab has been changed. Up to 250,000 is nil, 250,001 to 500,000 is 10%, 500,001 to 1,000,000 is 20%, and above 1,000,001 is 30%. However, for employees up to 60 years old.