Income Tax Department provides Illustrative Tax Calculations

Click here to Calculate Income tax using GConnect Income Tax Calculator 2012-13 (Assessment year 2013-14)

[T]he Circular No: 08/2012 dated 05.10.2012 F.NO. 275/192/2012-IT(B) issued by the Income tax Department elaborately explains the procedure to calculate income tax for this year and also elaborates the procedure for deduction of tax.  Checkout the following link to get the text of the same.

Click here to get the Procedure for calculating Income tax for the year 2012-13 (Assessment Year 2013-14)

The same circular provides various illustrations for calculation of inome tax of salaried class.  We have provided those examples here. 

Illustrations provided by Income Tax Department for tax calculation for the year 2012-13 (Assessment Year 2013-14)

Example 1

For Assessment Year 2013-14

(A) Calculation of Income tax in the case of an employee below the age of sixty years and having gross salary income of:

(i)  Rs. 1,50,000/-,

(ii)  Rs.2,00,000/-,

(iii)  Rs.5,00,000/-,

(iv)  Rs. 10,00,000/-and

(v)  Rs.20,00,000/-.

(B) What will be the amount of TDS in case of above employees, if PAN is not submitted by them to their DDOs/Offices:

Particulars

Rupees (i)

Rupees (ii)

Rupees (iii)

Rupees (iv)

Rupees(v)

Gross Salary Income (including allowances)

1,50,000

2,00,000

5,00,000

10,00,000

20,00,000

Contribution of G.P.F.

10,000

45,000

50,000

1,00,000

1,00,000

Computation of Total Income and tax payable thereon

Particulars

Rupees (i)

Rupees (ii)

Rupees (iii)

Rupees (iv)

Rupees (v)

Gross Salary

1,50,000

2,00,000

5,00,000

10,00,000

20,00,000

Less: Deduction U/s 80C

10,000

45,000

50,000

1,00,000

1,00,000

Taxable Income

1,40,000

1,55,000

4,50,000

9,00,000

19,00,000

           

(A) Tax thereon

Nil

Nil

25,000

1,10,000

4,00,000

Add: (i) Education Cess @ 2%. (ii) Secondary and Higher Education Cess @1%

Nil Nil

Nil Nil

500 2200

250 1100

8000 4000

Total tax payable

Nil

Nil

25,750

1,13,300

4,12,000

(B) TDS under sec. 206AA in case where PAN is not furnished by the employee

Nil

Nil

90,000

1,80,000

4,12,000

Example 2

For Assessment Year 2013-14

Calculation of Income Tax in the case of an employee below the age of sixty years having a handicapped dependent ( With valid PAN furnished to employer).

S.No.

Particulars

Rupees

1

Gross Salary

3,20,000

2

Amount spent on treatment of a dependant, being person with disability (but not severe disability)

7000

3

Amount paid to LIC with regard to annuity for the maintenance of a dependant, being person with disability( but not severe disability)

50,000

4

GPF Contribution 25,000

 

5

LIP Paid

10,000

Computation of Tax

S.No.

Particulars

Rupees

 

1 Gross Salary

3,20,000

 

Less: Deduction U/s 80DD (Restricted to Rs.50,000/- only)

50,000

 

2 Taxable income

2,70,000

 

Less: Deduction U/s 80C (i) GPF Rs.25,000/- (ii) LIP Rs. 10,000/- = Rs.35,000/-

35,000

3

Total Income

2,35,000

4

Income Tax thereon/payable

3,500

 

Add: (i). Education Cess @2% (ii). Secondary and Higher Education Cess @1%

70 35

5

Total Income Tax payable

3,605

6

Rounded off to

3,610

Example 3

For Assessment Year 2013-14

Calculation of Income Tax in the case of an employee below age of sixty years where medical treatment expenditure was borne by the employer ( With valid PAN furnished to employer).

S.No.

Articulars

Rupees

1

Gross Salary

3,00,000

2

Medical Reimbursement by employer on the treatment of self and dependent family member

30,000

3

Contribution of GPF

20,000

4

LIC Premium

20,000

5

Repayment of House Building Advance

25,000

6

Tuition fees for two children

60,000

7

Investment in Unit-Linked Insurance Plan

20,000

Computation of Tax

S.No.

Particulars

Rupees

1

Gross Salary

3,00,000

 

Add: Perquisite in respect of reimbursement of Medical Expenses In excess of Rs. 15,000/- in view of Section 17(2)(v)

15,000

2

Taxable income

3,15,000

 

Less: Deduction U/s 80C

 
 

(i) GPF

Rs. 20,000/-

 
 

(ii) LIC

Rs. 20,000/-

 
 

(iii) Repayment of House Building Advance

Rs.25,000/-

 
 

(iv) Tuition fees for two children

Rs. 60,000/-

 
 

(v) Investment in Unit-Linked Insurance Plan

Rs. 20,000/-

 
 

Total =Rs. 1,45,000/-

 
 

Restricted to Rs. 1,00,000/-

1,00,000

3

Total Income

2,15,000

4

Income Tax thereon/payable

1,500

 

Add: (i). Education Cess @2% (ii). Secondary and Higher Education Cess @1%

30 15

5

Total Income Tax payable

1,545

6

Rounded off to

1,550

Example 4

For Assessment Year 2013-14

Illustrative calculation of House Rent Allowance U/s 10 (13A)in respect of residential accommodation situated in Delhi in case of an employee below the age of sixty years (With valid PAN furnished to employer).

S.No.

Particulars

Rupees

1

Salary

2,50,000

2

Dearness Allowance

1,00,000

3

House Rent Allowance

1,40,000

4

House rent paid

1,44,000

5

General Provident Fund

36,000

6

Life Insurance Premium

4,000

7

Subscription to Unit-Linked Insurance Plan

50,000

Computation of total income and tax payable thereon

S.No.

Particulars

Rupees

1

Salary + Dearness Allowance + House Rent Allowance 2,50,000+1,00,000+1,40,000 = 4,90,000

4,90,000

2

Total Salary Income

4,90,000

3

Less: House Rent allowance exempt U/s 10(13A): Least of: (a)  Actual amount of HRA received= 1,40,000 (b) Expenditure of rent in excess of 10% of salary (including D.A. presuming that D.A. is taken for retirement benefit) (1,44,000-35,000) = 1,09,000 (c) 50% of Salary(Basic+ DA) = 1,75,000

1,09,000

 

Gross Total Income

3,81,000

 

Less: Deduction U/s 80C (i)  GPF Rs. 36,000/- (ii)  LIC Rs. 4,000/- (iii) Investment in Unit-Linked Insurance Plan Rs. 50,000/- Total =Rs.90,000/-

90,000

3

Total Income

2,91,000

 

Tax payable on total income

9,100

 

Add: (i). Education Cess @2% (ii). Secondary and Higher Education Cess @1%

182 91

 

Total Income Tax payable

9,373

 

Rounded off to

9370

Example 5

For Assessment Year 2013-14

Illustrating valuation of perquisite and calculation of tax in the case of an employee below age of sixty years of a private company in Mumbai who was provided accommodation in a flat at concessional rate for ten months and in a hotel for two months ( With valid PAN furnished to employer).

S.No.

Particulars

Rupees

1

Salary

7,00,000

2

Bonus

1,40,000

3

Free gas, electricity, water etc. (Actual bills paid by company)

40,000

4(a)

Flat at concessional rate (for ten month). = Rs. 3,60,000

3,60, 000

4(b)

Hotel rent paid by employer (for two month)

1,00,000

4(c)

Rent recovered from employee

60,000

4(d)

Cost of furniture.

2,00,000

5

Subscription to Unit Linked Insurance Plan

50,000

6

Life Insurance Premium

10,000

7

Contribution to recognized P.F.

42,000

8

Investment in long term infrastructure bonds (80CCF)

20,000

COMPUTATION OF TOTAL INCOME AND TAX PAID THEREON:

S.No.

Particulars

Rupees

1

Salary

7,00,000

2

Bonus

1,40,000

3

Total Salary(l+2) for Valuation of Perquisites

8,40,000

Valuation of perquisites

4(a)

Perq. for flat: Lower of (15% of salary for 10 mnths.=Rs. 1,05,000/-) and (actual rent paid= Rs 3,60,000) Rs. 1,05,000 1,38,600

Rs l,38,600

4(b)

Perq for hotel : Lower of (24% of salary of 2 mths.=Rs 33,600) and (actual payment= Rs 1,00,000) Rs. 33,600

4(c)

Perquisites for furniture(Rs.2,00,000) @ 10% of cost 20,000

4(c)(i)

Total of [4(a)+(b)+(c)] (1,05,000+ 33,600+ 20,000) Rs. 158,600 Less: rent recovered (-)Rs. 60,000 = Rs. 98,600

4(d)

Add perq. for free gas, electricity, water etc. Rs.40,000 (+) Rs 98,600 [4(c)(i)] = Rs l,38,600 Total perquisites

5

Gross Total Income (Rs.8,40,000+ 1,38,600)

9,78,600

6

Gross Total Income

9,78,600

7

Less: Deduction U/s 80C & 80CCF: (i). Provident Fund (80C) :42,000 (ii) LIC (80C) :10,000 (iii) Subscription to Unit Linked Insurance Plan(80C) :50,000/- (iv) Investment in Infrastructure Bond(80CCF) :20,000 Total = 1,22,000 Restricted to Rs 1,00,000 u/s 80C and Rs 20,000 u/s 80CCF

1,20,000

8

Total Income

8,58,600

9

Tax Payable

1,01,720

10

Add: (i) Education Cess @2% (ii) Secondary and Higher Education Cess @1%

2,034 1,017

11

Total Income Tax payable

1,04,771

12

Rounded off to

1,04,770

Example 6

For Assessment Year 2013-14

Illustrating Valuation of perquisite and calculation of tax in the case of an employee below the age of 60 years of a Private Company posted at Delhi and repaying House Building Loan ( With valid PAN furnished to employer)

S.No.

Particulars

Rupees

1

Salary

3,00,000

2

Dearness Allowance

1,00,000

3

House Rent Allowance

1,80,000

4

Special Duties Allowance

12,000

5

Provident Fund

60,000

6

LIP

10,000

7

Deposit in NSC VIII issue

30,000

8

Rent Paid by the employee for house hired by her

1,20,000

9

Repayment of House Building Loan (Principal)

60,000

10

Tuition Fees for three children (Rs. 10,000 per child)

30,000

Computation of total income and tax payable thereon

S.No.

Particulars

Rupees

1

Gross Salary (Basic+DA+HRA+SDA)

5,92,000

 

Less: House rent allowance exempt U/s 10 (13A) Least of: (a). Actual amount of HRA received. :Rs. 1,80,000 (b). Expenditure on rent in excess of 10% of salary (Including D.A.)assuming D.A. is including for retirement benefits (1,20,000- 40,000) :Rs. 80,000 (c). 50% of salary (including D.A) : Rs. 2,00,000

80,000

2

Gross Total Taxable Income 5,12,000

 
 

Less: Deduction U/s 80C (i). Provident Fund : 60,000 (ii). LIP : 10,000 (iii). NSC VIII Issue : 30,000 (iv). Repayment of HBA : 60,000 (v). Tuition Fees (Restricted to two children) : 20,000 Total : 1,80,000 Restricted to 1,00,000

1,00,000

 

Total Income

4,12,000

 

Income Tax thereon/payable

21,200

 

Add: (i)  Education Cess @ 2% (ii)  Secondary and Higher Education Cess @ 1%

424 212

 

Total Income Tax payable

21836

 

Rounded off to

21840

Example 7

For Assessment Year 2013-14

A. Calculation of Income tax in the case of a retired employee above the age of sixty years but below the age of 80 years and having gross pension of:

  i.  Rs. 4,50,000/-,

ii.  Rs. 8,00,000/-,

B. What will be the amount of TDS in case of above employees, if PAN is not submitted by them to their DDOs/Offices:

Particulars

Rupees (i)

Rupees (ii)

Gross Pension

4,50,000

8,00,000

Contribution of P.P.F.

70,000

70,000

Computation of Total Income and tax payable thereon

Particulars

Rupees (i)

Rupees (ii)

Gross Pension

4,50,000

8,00,000

Less: Deduction u/s 80C

70,000

70,000

Taxable Income

3,80,000

7,30,000

Tax thereon

13,000

71,000

Add: (i)  Education Cess @ 2%. (ii) Secondary and Higher Education Cess @ 1%

260 130

1420 710

Total tax payable

13,390

73,130

     

TDS under sec. 206AA in case where PAN is not furnished by the employee

26,000

1,46,000

Example 8

For Assessment Year 2013-14

A. Calculation of Income tax in the case of a retired employee above the age of 80 years and having gross pension of:

iii. Rs. 4,50,000/-,

iv. Rs. 8,00,000/-,

B. What will be the amount of TDS in case of above employees, if PAN is not submitted by them to their DDOs/Offices:

Particulars

Rupees (i)

Rupees (ii)

Gross Pension

4,50,000

8,00,000

Contribution of P.P.F.

70,000

70,000

Computation of Total Income and tax payable thereon

Particulars

Rupees (i)

Rupees (ii)

Gross Pension

4,50,000

8,00,000

Less: Deduction U/s 80C

70,000

70,000

Taxable Income

3,80,000

7,30,000

     

Tax thereon

Nil

46,000

Add: (i) Education Cess @ 2%. (ii) Secondary and Higher Education Cess @ 1%

 

920 460

Total tax payable

Nil

47,380

     

TDS under sec. 206AA in case where PAN is not furnished by the employee

Nil

1,46,000

Click here to Calculate Income tax using GConnect Income Tax Calculator 2012-13 (Assessment year 2013-14)

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