Income Tax Calculation

POSTED BY puparasar ON July 5, 2012 7:05 pm COMMENTS (3)

Hi Manish,
I have a question regarding the income tax calculations. Like we know, upto 2 lakhs is tax free for everyone now. But when company calculate TDS they charge you on the entire salary. They do not deduct the 2 lakhs before calculating your tax. For example if an individual draws a salary of 7 lakhs, they deduct the HRA, Conveyance, your investment of upto 1 lakhs and then calculate the tax. Shouldn’t they also deduct 2 lakhs from the remaining amount after all the other deductions? Because as per my understanding the 2 lakhs is tax free for all.
Let me know if I am wrong.
Thanks and looking forward to your reply.
Puja

3 replies on this article “Income Tax Calculation”

  1. Ashal Jauhari says:
    April 24, 2013 at 10:47 pm

    Dear Sonadhi, there is a small correction in your above reply. the 80d benefit ‘ll be max. 35000 Rs. if self + Sr. citizen parents are involved.

    Thanks

    Ashal

    Reply
  2. Ashal Jauhari says:
    July 5, 2012 at 7:39 pm

    Dear Puja, can you provide exact nos. FYI please – the employer does include the basic zero tax slab benefit to employees. The tax is calculated only from the 2L to that adjusted figure for HRA, tax saving investments etc.

    Thanks

    Ashal

    Reply
    1. sonadhi says:
      April 24, 2013 at 6:23 pm

      Dear Puja,
      I assume your salary is 7 lacs.
      Under 80C-1Lac;Under Home Loan(if you have)-1.5Lac,80D-25K(with senior cover),80DDB-60K(if in case),suppose u have not done-80G-50 or 100%,then the income is now 7L-all above=>365000…>365000-200000:->165000-taxable..>Income Tax to be given :-16500.
      Correct me if I am wrong.
      Thnx,
      Dhiraj

      Reply

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