Dear Seniors,
I'm the HR Executive of a leading engineering consulting company in Chennai. I'm a fresher, but I have managed everything here. However, the TDS process is the only aspect that I am struggling to grasp. The accounts team here is not providing adequate details and is unwilling to teach me the necessary information to understand the TDS process. I kindly request your help to solve this problem. I am eager to learn the entire process of TDS deduction.
PLEASE FRIENDS, I NEED YOUR HELP.
From India, Madras
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11I'm the HR Executive of a leading engineering consulting company in Chennai. I'm a fresher, but I have managed everything here. However, the TDS process is the only aspect that I am struggling to grasp. The accounts team here is not providing adequate details and is unwilling to teach me the necessary information to understand the TDS process. I kindly request your help to solve this problem. I am eager to learn the entire process of TDS deduction.
PLEASE FRIENDS, I NEED YOUR HELP.
From India, Madras
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Dear Suganya,
I shall insert an Excel worksheet for Income Tax Calculation on salary for the Financial Year 2010-11 (Assessment Year 2011-12). Prior to that, I wish to explain some details to get an idea to enter the inputs.
On gross salary, the following deductions are applicable:
1) Professional Tax
2) House Rent in excess of 1/10th of salary subject to ceiling equivalent to HRA
3) Interest on Housing loan subject to ceiling Rs. 1,50,000
4) Refund on Housing loan, savings, tuition fee for 2 children, etc., altogether subject to ceiling Rs. 100,000
5) In addition, savings on infrastructure bonds up to Rs. 20,000
6) Other than the above one lakh, 15,000 to 20,000 towards mediclaim premium, 40,000 to 60,000 towards treatment on specified diseases like Motor Neuron disease, 75,000 to 100,000 towards disability, etc., are also admissible for deduction
Now taxable income can be calculated as follows:
Gross salary - total deductions = Taxable income
Taxpayers can be categorized into 3 groups:
1) Non Seniors - Male
2) Non Seniors - Female
3) Senior Citizens (65 years old & above)
If the taxable income is Rs. 2,40,000, a Senior Citizen is fully exempted from paying tax. Non-Senior Female has to pay in excess of Rs. 1,90,000 & Non-Senior Male in excess of Rs. 1,60,000.
Beyond the above income, one has to pay 10% up to Rs. 5,00,000, 20% thereafter up to Rs. 8,00,000, and 30% in excess of Rs. 8,00,000. In addition, an education cess @ 3% will be charged on Total Tax.
I shall provide an example:
Gross income of a Non-Senior Male - Rs. 12,00,000
Deductions (actual): Professional Tax - 12000, Housing loan interest - 2,00,000, Total savings/deductions - 2,50,000, Savings on Infrastructure bond - 25,000, other deductions over 1,00,000 - 50,000.
Admissible total deductions (subject to ceiling limits) - 12000+150000+100000+20000+50000 = 332000
Taxable income, 1200000 - 332000 = 868000
For Non-Senior Male:
Rs. 1,60,000 is exempted.
For the next 340000 (500000-160000), 340000x10% = 34000 -(1)
For the next 300000 (800000-500000), 300000x20% = 60000 -(2)
For the next 68000 (868000-800000), 68000x30% = 20400 -(3)
Tax - (1)+(2)+(3) = 114400
Also for Non-Senior Female Tax: 114400-3000 = 110400
and for Senior Citizens Tax: 114400-8000 = 106400
Education Cess: 114400*3% = 3432
Total Tax - Rs. 1,17,832
See Excel Sheet. Enter gross salary and deductions/savings applicable in the green color column. Results will occur in the yellow color. The red color is used for static data.
ABBAS.P.S,
Secretary,
ITI Employees' Association,
ITI Ltd, PALAKKAD - 678 623,
KERALA, INDIA.
Ph. +91 9447 467 667
From India, Bangalore
Acknowledge(0)Amend(0)
I shall insert an Excel worksheet for Income Tax Calculation on salary for the Financial Year 2010-11 (Assessment Year 2011-12). Prior to that, I wish to explain some details to get an idea to enter the inputs.
On gross salary, the following deductions are applicable:
1) Professional Tax
2) House Rent in excess of 1/10th of salary subject to ceiling equivalent to HRA
3) Interest on Housing loan subject to ceiling Rs. 1,50,000
4) Refund on Housing loan, savings, tuition fee for 2 children, etc., altogether subject to ceiling Rs. 100,000
5) In addition, savings on infrastructure bonds up to Rs. 20,000
6) Other than the above one lakh, 15,000 to 20,000 towards mediclaim premium, 40,000 to 60,000 towards treatment on specified diseases like Motor Neuron disease, 75,000 to 100,000 towards disability, etc., are also admissible for deduction
Now taxable income can be calculated as follows:
Gross salary - total deductions = Taxable income
Taxpayers can be categorized into 3 groups:
1) Non Seniors - Male
2) Non Seniors - Female
3) Senior Citizens (65 years old & above)
If the taxable income is Rs. 2,40,000, a Senior Citizen is fully exempted from paying tax. Non-Senior Female has to pay in excess of Rs. 1,90,000 & Non-Senior Male in excess of Rs. 1,60,000.
Beyond the above income, one has to pay 10% up to Rs. 5,00,000, 20% thereafter up to Rs. 8,00,000, and 30% in excess of Rs. 8,00,000. In addition, an education cess @ 3% will be charged on Total Tax.
I shall provide an example:
Gross income of a Non-Senior Male - Rs. 12,00,000
Deductions (actual): Professional Tax - 12000, Housing loan interest - 2,00,000, Total savings/deductions - 2,50,000, Savings on Infrastructure bond - 25,000, other deductions over 1,00,000 - 50,000.
Admissible total deductions (subject to ceiling limits) - 12000+150000+100000+20000+50000 = 332000
Taxable income, 1200000 - 332000 = 868000
For Non-Senior Male:
Rs. 1,60,000 is exempted.
For the next 340000 (500000-160000), 340000x10% = 34000 -(1)
For the next 300000 (800000-500000), 300000x20% = 60000 -(2)
For the next 68000 (868000-800000), 68000x30% = 20400 -(3)
Tax - (1)+(2)+(3) = 114400
Also for Non-Senior Female Tax: 114400-3000 = 110400
and for Senior Citizens Tax: 114400-8000 = 106400
Education Cess: 114400*3% = 3432
Total Tax - Rs. 1,17,832
See Excel Sheet. Enter gross salary and deductions/savings applicable in the green color column. Results will occur in the yellow color. The red color is used for static data.
ABBAS.P.S,
Secretary,
ITI Employees' Association,
ITI Ltd, PALAKKAD - 678 623,
KERALA, INDIA.
Ph. +91 9447 467 667
From India, Bangalore
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Excel sheet for Tax deduction.xls