INCOME TAX ON SENIOR CITIZEN

TAX ON SENIOR CITIZEN

Income tax exemption limit raised by Rs. 50000/- that is from Rs. 2.5 lakh to Rs. 3.0 lakh in the case of Senior Citizen

B. Senior Citizen (above 60 age)
Zero to 3.0 lac      = NIL
3.0 Lac to 5 Lac   = 10%
5.0 Lac to 10 Lac = 20%
10 Lac to Above   = 30%

Rabate under section 87A is applicable to you only if your Net Taxable Income is below Rs. 500000/-

However, Rebate is restricted to Rs. 2000/-

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Example No. 1
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Calculate Tax of Mr.A Whose Total Taxable income earned is Rs. 180000/- Per annum ??

Solution : Tax Liability is Nil. since any income earned upto Rs. 300000/- by Individual is EXEMPTED from TAX.

It is Pertinent to note that Rabate u/s 87A is not applicable when total tax payable is below Rs. 2000/-
In that given case tax payable is NIL thus, Rabate u/s 87 is not Appilicable.
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Example No. 2
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Calculate Tax of Mr.B Whose Total Taxable income earned is Rs. 300000/- Per annum ??

Solution : Tax Liability is Nil. since any income earned upto Rs. 300000/- by Individual is EXEMPTED from TAX.

It is Pertinent to note that Rabate u/s 87A is not applicable when total tax payable is below Rs. 2000/-

In that given case tax payable is NIL thus, Rabate u/s 87 is not Applicable.

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Example No. 3
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Calculate Tax of Mr.C Whose Total Taxable income earned is Rs. 400000/- Per annum ??

Solution : Tax Liability is 8240/-. since any income earned upto Rs. 300000/- is EXEMPTED from TAX. hence,

Taxable Income = 400000
Exempted Income = (400000 - 300000)
Tax is payable on Rs. 100000/-
at 10% Rate = 10000/-
(10000-2000(87A)=8000*3% =240/-)
LESS Rabate 87A = 2000 (Income <=5 lac)
PLUS 3% Cess and E. Cess
Thus, Rs. 8240/- is Tax Payable by Mr. C

**********PLEASE NOTE************
Where the taxable income of an individual exceeds rs. 500000/- the calculation is simle and started as under :
Taxable income above Rs. 500000/- is taxed at 20% Rate Plus 20000/- (200000*20%)
Plus 3% cess and E.cess

************ NOTE END*************
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Example No. 4
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Calculate Tax of Mr.E Whose Total Taxable income earned is Rs. 1100000/- Per annum ??

Solution : Tax Liability is 154500/-. As income above Rs. 1000000/- is Taxed at 30% = Rs. 30000/-
(500000-300000)= 200000*10% =20000/-
(1000000-500000) = 500000*20% = 100000/-
100000*30% = 30000/-
150000*3% = 4500/-
Plus 154000/-
Plus 3% Cess and E. Cess = Rs. 4500/-
Thus, Rs. 154000/- is Tax Payable by Mr. E