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How To Calculate Income Tax for Salaried Man or Woman in India?

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As the year-end arrives, everyone starts thinking about the computation of taxes. For salaried persons, the employer deducts the income tax on salary before the salary is distributed every month. But for filing the income tax return and to calculate the annual income tax, every salaried person must be aware of the process. An Income Tax Calculator is a convenient financial tool, available for everyone.

What are Income Tax Slab Rates?

Income tax for a salaried person is calculated, based on the slab rates as defined by the Income-Tax Act in India. It is similar for men and women both. You can use income tax calculator easily for your taxes online.

The slab rates are categorized as under:

Income Tax Slab Rates for Individual Tax Payers below 60 Years of Age (FY 2017-2018)

Income Tax Slabs Tax ImpliedHealth and Education Cess
Up to Rs. 2.5 lakh per annumNo Tax
From Rs. 2.5 lakh to Rs. 5 lakh per annum5%3% of Income Tax
From Rs. 5 lakh to Rs. 10 lakh per annum20%3% of Income Tax
More than Rs. 10 lakh per annum30%3% of Income Tax

Income Tax Slab Rates for Individual Tax Payers above 60 Year of Age and below 80 Years of Age (FY 2017-2018)

Income Tax Slabs Tax ImpliedHealth and Education Cess
Up to Rs. 3 lakh per annumNo Tax
From Rs. 3 lakh to Rs. 5 lakh per annum5%3% of Income Tax
From Rs. 5 lakh to Rs. 10 lakh per annum20%3% of Income Tax
More than Rs. 10 lakh per annum30%3% of Income Tax

Income Tax Slab Rates for Individual and HUF Tax Payers above 80 Year of Age (FY 2017-2018)

Income Tax Slabs Tax ImpliedHealth and Education Cess
Up to Rs. 5 lakh per annumNo Tax
From Rs. 5 lakh to Rs. 10 lakh per annum20%3% of Income Tax
More than Rs. 10 lakh per annum30%3% of Income Tax

How to calculate the salary income?

Once you’re aware of the tax slabs, you may need to calculate the salary income, which is derived by adding up the basic salary, house rent allowance, perquisites, and all the other allowances together.

There are a few allowances which are exempt from the tax, and these must be considered, when computing the salary income.  Following are some of the components of salary, on which exemptions of income tax depend:

  • House rent allowance (HRA): an employee staying in a rented place and receiving HRA from its employer can declare it as a tax deduction.
  • Travel allowance: this is tax-exempt as a part of the expense
  • Medical allowance: on furnishing medical bills, an employee can claim this deduction.

The employer mandatorily deducts the tax from the salary every month and pays the same to the Government. The employer based on the estimated salary calculates an estimated tax which is spread over the year and then subtracted from the monthly salary. Deduction of tax is a necessary practice followed in India.

Leading financial providers like Bajaj Finserv offer a wide range of financial products for your convenience. Apart from browsing the list of financial products, you can calculate the premiums to be paid for the loan, the returns from an FD (Fixed Deposit), and the Income Tax to be paid using the website.

The Salary Income Tax Calculator allows you to calculate the income tax based on the income details, exemption details, details of deduction under Form 16A, and the source of income details. However, you may need to submit the annual figures for each of these entries.

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