How much Income Tax do I need to pay?-MoneyMindz

By | 13/03/2018

How much tax you should pay depends upon the tax slab applicable to your income. Income tax is calculated on the basis of these tax slabs.

Income Tax Rates for taxpayers under 60 years of age in FY 2018-2019 and FY 2017-2018

Income Slab Tax Rate
Up to Rs.2,50,000                                                                                                No Tax
Rs.2,50,000 – Rs.5,00,000                                                                                                        5%
Rs.5,00,000 – Rs.10,00,000 20%
Rs.10,00,000 and beyond 30%

Income Tax Slab For Individuals Above 60 Years But Below 80 Years

Income (Yearly) Tax Rate
Below Rs. 3,00,000 Nil
Rs. 3,00,000 to Rs. 5,00,000 5%
Rs. 5,00,000 to Rs. 10,00,000 20%
Above Rs. 10,00,000 30%

Income Tax Slab For Resident Individuals Above 80 Years

Income (Yearly) Tax Rate
Below Rs. 5,00,000 Nil
Rs. 5,00,000 to Rs. 10,00,000 20%
Above Rs. 10,00,000 30%

 

 

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Currently, a cess of 3% of income tax payable is added to the tax liability. This 3 per cent is made up of 2 per cent of education cess and 1 per cent of senior secondary education cess. 

As per the current income tax slabs, taxation of income of resident individuals below 60 years is as follows:

Income up to Rs 2.5 lakh is exempt from tax, 5 percent tax on income between Rs 250,001 to Rs 5 lakh; 10 percent tax on income between Rs 500,001 and Rs 10 lakh; and 30 percent tax on income above Rs 10 lakh. 

Include income received (if any) from the following sources to calculate income tax

  • Income from Salary which is the salary paid by the employer
  • Income from residential property (rental income)
  • Income from capital gains (income from the sale of shares or house property)
  • Income from business or any other profession (income from consulting, freelancing or small business)
  • Income from various other sources (Interest received from savings accounts, fixed deposits, bonds, etc)

Let’s take the example of Harish, a Visual Designer, working in an MNC in Bangalore He is 30  years old and his annual income is Rs. 8,00,000. According to the income tax slabs mentioned earlier, here’s how much tax she will be paying if he doesn’t plan his taxes:

 

Total Taxable Income Income Tax Payable
Rs 800000 Rs. 74,675

 

Particulars Investment Amount (in Rupees) Amount (in Rupees)
Salary   8,00,000
Income From Other Sources  
Income From House Property  
Income From Business  
Income From Capital Gains  
Net Taxable Income   8,00,000
Deduction Under Section 80C    
PPF Contribution 20,000  
ULIP 10,000  
NPS Contribution  
ELSS Funds  
Children’s Tuition Fees 100000  
Life Insurance Premium 50,000  
Tax-saver Fixed Deposit  
Other Deductibles  
Deduction Under Chapter VI A    
Medi-claim Premium (Section 80 D) 15,000  
Contribution to Pension Account (Section 80CCD)  
House Rent Paid (Section 80GG)  
Interest On Deposits In Savings Account (Section 80TTA)  
Total Deduction 165000  
Total Taxable Income   6,35,000

 

Total Income Total Taxable Income Total Tax Amount
Rs. 8,00,000 Rs. 6,35,000 Rs. 40,685
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Eventually, He’ll be paying only Rs. 40,685 in tax with little planning, as compared to

Rs.74,675 he would have had to pay if she hadn’t planned her taxes at all.

Are you willing increasing your wealth by saving tax?

Leave a missed call @ 022-62116588.

 

 

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