TAX ON INDIVIDUAL

TAX ON INDIVIDUAL

Income Tax exemption limit raised by Rs. 50000/- That is , from Rs. 2 Lakh To 5 Lakh in the case of Individual Taxpayers.

A Male/Famale (Individual)
Zero To 2.5 Lac   = Nil
2.5 Lac To 5 Lac = 10 %
5 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. 250000/- 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. 2
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Calculate Tax of Mr.B Whose Total Taxable Income earned is Rs. 300000/- Per annum ??

Solution : Tax Liability is 3090/-. since any Income earned upto Rs. 250000/- is EXEMPTED from TAX.

Taxable Income = 300000
Exempted Income = (250000)
Tax is payable on Rs. 50000/-
at 10% Rate = 5000/-
(5000-2000(87A) = 3000*3% = 90/-)
LESS Rabate 87A = 2000 (Income <=5 lac)
PLUS 3% Cess and E. Cess
Thus, Rs. 3090/- is Tax Payable by Mr. B

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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 13390/-. since any income earned upto Rs. 250000/- is EXEMPTED from TAX. hence,

Taxable Income = 400000
Exempted Income = (250000)
Tax is payable on Rs. 150000/-
at 10% Rate = 15000/-
LESS Rabate 87A = 2000 (Income <=5 lac)
PLUS 3% Cess and E. Cess
Thus, Rs. 13390/- 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 25000/- (250000*10%)
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. 600000/- Per annum ??

Solution : Tax Liability is 46350/-. As income above Rs. 500000/- is Taxed at 10% = Rs. 25000/-
 (500000-250000)= 250000/-
Plus 25000/-
Plus 3% Cess and E. Cess = Rs. 1350/-
Thus, Rs. 46350/- is Tax Payable by Mr. E

Taxable Income = 600000
 Income = (250000*10%)= 25000/-
Tax is payable on Rs. 100000*20%=20000/-
at 10% Rate = 25000/-
PLUS 3% Cess and E. Cess = 1350
Thus, Rs. 46350/- is Tax Payable by Mr. E



**********PLEASE NOTE************
Where the taxable income of an Individual exceeds rs. 1000000/- the calculation is simple and started as under :
Taxable Income above Rs. 1000000/- is taxed at 30% Rate Plus 125000/-
(250000*10% Rs. 25000/-
500000*20% Rs. 100000/-)
Plus 3% Cess and E.cess

************ NOTE END*************
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Example No. 5
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Calculate Tax of Mr J Whose Total Taxable income earned is Rs. 1100000/- Per annum ??

Solution : Tax Liability is 159650/-. As income above Rs. 1000000/- is Taxed at 30% = Rs. 125000/-
 (500000-250000)= 250000
  250000*10% =. 25000/-
  500000*20% = 100000/-
  100000*30% = 30000/-

Plus 155000/-
Plus 3% Cess and E. Cess = Rs. 1350/-
Thus, Rs. 46350/- is Tax Payable by Mr. E

Taxable Income = 600000
 Income = (250000*10%)= 25000/-
Tax is payable on Rs. 100000*20%=20000/-
at 10% Rate = 25000/-
PLUS 3% Cess and E. Cess = 4650
Thus, Rs.159650/- is Tax Payable by Mr. J