Income Tax Calculations - A General Understanding

We all know that without taxation a nation cannot survive. Taxes are the price we pay for a civilized society. In India just like in any other nation the main priority of most of its citizens is to save on Taxes. You must have heard the saying 'For Every Benefit You Receive Tax Is Levied'. Hardly I receive anything and the taxman is waiting at my doorstep. In order to learn more on Taxation please look up the website IndianMoney.com.

Most of us must be feeling very hot this season but not because of the heat alone. Now is that time in which the salaried employees must submit their tax related proofs in order to avail income tax deductions. But what are these tax deductions and how do they work ? Why are they so important to us? How can we use these Tax benefits in our day to day life? All these questions must be running through our minds. I would like to remind all of you that the team of Financial Planners at IndianMoney.com are always there for you to plan your Income Tax needs in a most efficient manner and are always willing to lend you a helping hand. You can explore this unique Free Advisory Service just by giving a missed call on 02261816111.

In order to understand Income tax deductions let us consider the following cases. Mr Suresh is 35 years old and works as an Operations manager in an IT Firm. His salary is INR 11 Lakhs per annum. Mr Suresh did not care to study about income tax deductions as he believed this was not his" cup of tea".

To calculate tax use our income tax calculator tool

Income Tax slab rates for Individuals Less Than 60 Years: FY-2012-2013

Here Mr Suresh was paying his Income taxes as per the slabs shown below : Table - 1

Now let us consider what Mr Suresh should have done in order to save taxes as per the Income Tax Deductions available to him. Mr Suresh could have invested a sum of INR 1 Lakh in Public Provident fund and claimed income tax benefits under section 80C.

Invest in Public Provident Fund

Medical claim Benefits

Here Mr Suresh Father is 67 years old and mother is 65 years old. He has a Spouse and a child .Here he can avail a medical benefit for his parents ,spouse and his child as per the Section 80D.

I would like to end this article hoping that it has proved to be very informative showing the Income Tax Calculations. On a Lighter Note "When There Is A Single Thief Its Robbery. When There Are Thousand Thief’s Its Taxation".