TAX CALCULATION

POSTED BY Jig ON June 19, 2012 4:14 pm COMMENTS (3)

Hello All,
I am an NRI and need expert view to come down to one decision.
I am getting offer of 10 lac package in india. How much we can expect net income after tax deduction?
Also how much max we can invest to save tax? In other way how much mandatory tax will be deducted in this package?
Your comments are highly valuable to me.
Thanks

3 replies on this article “TAX CALCULATION”

  1. Jig says:

    Thank you BFA & Ashal for reply

    that will be CTC.

    nJoy

  2. Dear Jig, is this 10L cash in hand salary or 10L CTC? there is a vast difference of tax in both cases.

    Please clarify.

    thanks

    Ashal

  3. BanyanFA says:

    Jig,
    This is a bit diff question to answer – owing to different options offered by different companies to their employees to reduce the tax burden. While computing income tax for salaried employees, you get several deductions, the biggest one being HRA (House Rent Allowance). If you just go by 80C’s 1 lac deduction and ignore all other deductions, your tax liability for 10 lac package would be Rs. 110,000. However, this is assuming that there would be no PF deduction. If that happens, the employer deducts 12% of the Basic as employer’s contribution and another 12% as your contribution.

    Hence it is very important to know what would be the breakup of the Salary. If you want a rough estimate, your max tax liability would be Rs. 1.1 lac. However, on a safe side, you may not have to pay more than 50-60K per year tax (assuming HRA deduction).

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