There is just one word which can describe year 2008-2009 tax structure … GREAT. This article will tell you everything about tax in 2008 . Following things will be discussed :
1. Tax Slab in 2008 for salaried employees
2. How much will you save ?
The exemption limit for year 2008 is 1.5 lacs , which means that if your taxable income is upto 1.5 lacs , you dont pay any tax .
What is Taxable Income ?
The pay which you get has many components , like HRA , conveyance allowance and others.
Out of this income some things are deductible on your hand and after deducting you arrive at a amount called Taxable income , on which you have to pay tax.
Taxable Income = Your Gross Salary – (HRA) – (Investments under Sec 80 C) – (Conveyance allowance) – (Health insurance Premium , Sec 80D) and some more things which you may claim.
The slab for year 2008-09 is as follows:
Exemption Limit for Men = 1.5 lacs
Exemption Limit for Women = 1.8 lacs
Exemption limit for Senior Citizens = 2.25 lacs
3% Education cess also on the tax amount after tax and surcharge (if any)
What is surcharge?
* If salary is above 10 lacs , 10% surcharge will also be applicable.
Example : Ajay earns Rs 14 lacs
Total Income (14 lac ) – amount under sec 80c (1 lac) – HRA (Rs 70k , for example) – Conveyence allowance (9,600 , 800*12) – health Insurance (10k , max 15k) under sec 80D (its seperate from sec 80C) = 14 lacs – 1,94,800 = 12,05,200
Now lets do tax calculation :
0 – 1.5 : 0
1.5 – 3 : 15,000 (@ 10%)
3 – 5 : 40,000 (@ 20%)
5+ : 2,11,560 (@ 30%)
= 2,66,560 + surcharge (10% of this amount)
= 2,66,560 + 26,656
= 2,93,216
Now education cess will also be applied : @ 3% , so 2,93,216 + 3%
= 2,93,216 + 8796.48
= Rs. 302012.48
This is the total tax payable.
Note : education cess is charged after surcharge is applied and not before.
I would be happy to read your comments or disagreement on any topic. Please leave a comment.
{ 7 comments… read them below or add one }
This is good blog about investing.
did you like the short trading or long term stock (value investing) ?
this is my blog about foreigner investment in asia.
ASI report : The report is all over image of Asia.
what do you think ?
Hi Modeller
I like short term trading ..
Manish
Im confused about Assessment Year & Financial Yr as this is the first time i would be paying Income tax.Would you be able to explain for which year`s income should the income tax be paid before this March 31st 2010 ?
for the period from April 2009 – Mar 2010 OR April 2008 – March 2009?
April 2009 – Mar 2010
We can also claim upto 1.5 lacs on house loan interest paid. That saves good money for us.
Hi Manish… Gud explanation… Just 1 doubt… Dont we deduct EPF n Gratuity for salaried class? N for my case I do’ve a Group Mediclaim provided by my company, for which I pay monthly premium of Rs 5k pa.. So can I include it for exemption?
You can include only EPF for 80C ,rest all is seperate . Gratuity comes into the picture in the year of reciept
Manish