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# How to Calculate Income Tax?

#### IndianMoney.com Research Team | Posted On Monday, December 14,2009, 08:28 PM

In our previous article we have shared with you the income tax rates for the financial year 2009-10. We have received hundreds of requests from readers to describe the method of income tax calculation in an easier way. We have developed an Income Tax calculator to calculate the tax liability on your own. There are different categories of Individuals for the purpose of calculating Income tax. Income Tax Act has categorized all Income Tax Payers (Individuals) into 3 different types:

• Male taxpayers

• Female taxpayers

• Senior citizens

### Income Tax Slab for Male Tax Payers

 Annual Income Income Tax rates for FY 2009-10 Up to 160000 Nil 160000 – 300000 10% 300000 – 500000 20% 500000 and above 30%

Now, let us see the method of calculating income tax in detail with few examples:

Example 1: Mr. Rahul is 35 year old and earning 8 lac annually.

Calculation

 Heads % of Income Tax Tax Amount Tax on Income up to 160000 Nil Nil Tax on Income between 160000-300000 10% 14000 Tax on Income between 300000-500000 20% 40000 Tax on Income between 500000- 800000 30% 90000 Total 144000 Educational Cess 3% of the total tax 4320 Net Tax Payable 149320

Example 2: Mr. Sandeep is 40 year old and earning 12 lac annually.

Calculation:

 Heads % of Income Tax Tax Amount Tax on Income up to 160000 Nil Nil Tax on Income between 160000-300000 10% 14000 Tax on Income between 300000-500000 20% 40000 Tax on Income between 500000- 1200000 30% 210000 Total 264000 Educational Cess 3% on the total tax 7920 Net Tax Payable 272920

### Income Tax Slab for Female Tax Payers

 Annual Income Income Tax rates for FY 2009-10 Up to 190000 Nil 190000 – 300000 10% 300000 – 500000 20% 500000 and above 30%

Now, let me explain the method of calculating income tax in detail with few examples:

Example 1: Ms. Shreya is 35 year old and earning 8 lac annually.

Calculation:

 Heads % of Income Tax Tax Amount Tax on Income up to 190000 Nil Nil Tax on Income between 190000-300000 10% 11000 Tax on Income between 300000-500000 20% 40000 Tax on Income between 500000- 800000 30% 90000 Total 141000 Educational Cess 3% of the total tax 4230 Net Tax Payable 146230

Example 2: Ms.Priya is 40 year old and earning 12 lac annually.

Calculation

 Heads % of Income Tax Tax Amount Tax on Income up to 190000 Nil Nil Tax on Income between 190000-300000 10% 11000 Tax on Income between 300000-500000 20% 40000 Tax on Income between 500000- 1200000 30% 210000 Total 262000 Educational Cess 3% on the total tax 7860 Net Tax Payable 269860

### Income Tax Slab for Senior Citizens

 Annual Income Income Tax rates for FY 2009-10 Up to 240000 Nil 240000 – 300000 10% 300000 – 500000 20% 500000 and above 30%

Now, let us the the method of calculating income tax in detail with few examples:

Example 1: Mr. Ganesh Prasad is 67 year old and earning 8 lac annually.

Calculation:

 Heads % of Income Tax Tax Amount Tax on Income up to 240000 Nil Nil Tax on Income between 240000-300000 10% 6000 Tax on Income between 300000-500000 20% 40000 Tax on Income between 500000- 800000 30% 90000 Total 136000 Educational Cess 3% of the total tax 4080 Net Tax Payable 140080

Example 2: Ms. Lakshmi 66 year old and earning 12 lac annually.

Calculation:

 Heads % of Income Tax Tax Amount Tax on Income up to 240000 Nil Nil Tax on Income between 240000-300000 10% 6000 Tax on Income between 300000-500000 20% 40000 Tax on Income between 500000- 1200000 30% 210000 Total 256000 Educational Cess 3% on the total tax 7680 Net Tax Payable 263680

See Also: How do i file income tax returns?

We hope this will help you to understand income tax calculation better. Please click on the below link to access Income Tax Calculator.

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