Tax Calculation in India

Tax calculation is a complicated procedure but using the right tool will make the procedure simpler. There are many tax calculators on the Internet that can help you work out the precise amount of tax in a short period. Tax calculation in India This is the process of determining the amount of tax payable to the authorities. If you are a taxpayer, you should use a financial calculator to arrive at the exact amount. In India, tax is levied on income of both private sector and public sector employees. Income Tax calculation in India is performed on the basis of the income of an individual from different heads of income (as laid down under sectio 14, chapter 4 of the IT Act, 1961). These heads are the following: Income from salaryr Income from business or professionr Income from capital gainsr Income from residential propertyr Income from other sources Income Tax Rates for financial year 2010-2011 Listed below are the rates for men, women, and senior citizens for the financial year 2010-2011: For Men Amount of Income with Rate Upto Rs. 1,60,000 - Nilr Rs. 1,60,001 to Rs. 5,00,000 - 10% Rs. 5,00,001 to Rs. 8,00,000 - 20% Greater tha Rs.8,00,000 - 30% For Women Amount of Income with Rate Upto Rs. 1,90,000 - Nilr Rs. 1,90,001 to Rs. 5,00,000 - 10% Rs. 5,00,001 to Rs. 8,00,000 - 20% Greater tha Rs.8,00,000 - 30% For senior citizens/resident individuals of 65 years or above Amount of Income with Rate Upto Rs. 2,40,000 - Nilr Rs. 2,40,001 to Rs. 5,00,000 - 10% Rs. 5,00,001 to Rs. 8,00,000 - 20% Greater tha Rs.8,00,000 - 30% Seven easy steps for Tax Calculation in India Working out the amount payable to the authorities is easy if you follow the steps given below: Calculate your gross income (gross income = monthly income*12) Calculate your charity/donation amount (if applicable) Determine your savings (take into account savings and investments that are exempt) Calculate your taxable income (deduct your charity, donations, and savings from your gross income) Refer to the IT slabs for calculating the amount of tax (for individuals, women, and senior citizens) Add 3% of your taxable earnings as the educational cess to the new amount you have ascertained With help of this data you can easily calculate income tax. If you do not want to calculate manually you can also use income tax calculator provided.