Do you jump into a lake if you do not know how to swim? You must be thinking what a stupid question to ask. You must be knowing a number of your friends who say they can handle any financial problem with ease. Piece Of Cake. Many of your friends say I don’t have any qualifications in finance but I can easily handle financial issues. I advise you not to believe them. This is like a person who doesn’t know how to swim standing at the edge of a swimming pool and saying just watch me jump into the deep end of the pool. Do you want to be in this position? Definitely Not? Don’t you think you should be armed with the knowledge of which Income tax slab you fall under. Don’t you think you should study all the tax deductions available to you? Care To know more about Income Tax? The team of Financial Planners at IndianMoney.com are always there for you to plan your taxation needs in a most effective and efficient manner. You can explore this unique Free Advisory Service just by giving a missed call at 022 6181 6111.
Individuals And Hindu Undivided Families and Resident Woman Under 60 Years
|
|
Income Tax Slabs |
Income Tax Rates |
Education Cess |
| 1 |
Where the total income does not exceed INR 2,00,000 |
NIL |
NIL |
| 2 |
Where the total income exceeds INR 2,00,000 but does not exceed INR 5,00,000 |
10% of the amount by which the total income exceeds INR 2,00,000. |
2 % of Income Tax |
| 3 |
Where the total income exceeds INR 5,00,000 but does not exceed INR 10,00,000 |
INR 30000/- + 20% of the amount by which the total income exceeds INR 5,00,000. |
2 % of Income Tax |
| 4 |
Where the total income exceeds INR 10,00,000 |
INR 130000/- + 30% of the amount by which the total income exceeds INR 10,00,000 |
2 % of Income Tax |
Education cess on Income tax and Secondary and Higher Education cess on income tax shall be levied at the rate of 2% and 1% respectively.
Let us consider Mr Ritesh who is married and 38 years of age works for a market research firm. He has a pay package of INR 11 Lakhs per Annum. Let us consider Mr Ritesh does not avail of the income tax deductions available to him. So How Much Income Tax Does He Pay?
Table 1
Heads |
% Of Income tax |
Income Tax |
|
Up To INR 2 Lakhs |
Nil |
Nil |
|
INR 2 Lakhs - INR 5 Lakhs |
10% |
INR 30000 (A) |
|
INR 5 Lakhs - INR 10 Lakhs |
20% |
INR 100000 (B) |
|
INR 10 Lakhs And Above |
30% |
INR 30000 ( C ) |
|
Total |
INR 160000 (A)+(B)+(C) |
|
|
Educational Cess |
3% Of Total Tax (160000 *3%) |
INR 4800 (D) |
|
Net Tax Payable |
INR 164800 (A)+(B)+(C)+(D) |
A Loan facility up to 25% can be availed from 3rd financial year till the 5th financial year while a withdrawal of up to 50% is allowed from 6th financial year onwards.
Heads |
Amounts |
|
Gross Taxable Income |
INR 11,00,000 (A) |
|
Less Public Provident Fund deductions under Section 80 C |
INR 50000 (B) |
|
Less Unit Linked Insurance Plan Premium under Section 80 C |
INR 50000 (C) |
|
Less Tax Deductions Under Section 80 D |
INR 35000 (D) |
|
Total Taxable Income |
INR 965000 (A) – (B+C+D) |
Table 3
Heads |
% Of Income Tax |
Income Tax |
|
Up To INR 2 Lakhs |
NIL |
NIL |
|
INR 2.0 Lakhs - INR 5 Lakhs |
10% |
INR 30000 (A) |
|
INR 5 Lakhs – INR 10 Lakhs |
20% |
INR 93000 (B) |
|
Total Tax |
INR 123000 (A)+(B) |
|
|
Education Cess |
3% Of INR 123000 |
INR 3690 (C ) |
|
Net Tax Payable |
INR 126690 (D)=(A)+(B)+(C) |
You must have noticed that Mr Ritesh has saved a phenomenally huge amount of INR 172010 by making use of the deductions available to him under the Income tax act. You can picture yourself in Mr Ritesh position .Imagine what you can do with this kind of an amount Perhaps buy an LED Television, An Ultrabook, A high end Smartphone or even some jewellery for your wife. Don’t you think it would be wise to invest in qualities of thrift, prudence and perhaps just that extra bit of paying attention to detail and upgrading your income tax knowledge which can save you all this money?.It would be wise to remember " There Is No Elevator To Success You Have To Use The Stairs ".
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