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Income Tax


Income Tax Slab Rates for F.Y. 2014-15 (A.Y. 2015-16)

 

For Men

 

Upto Rs.250000                                                                                                                NIL

Rs. 250001to Rs. 500000                                                                                                10per cent

Rs. 500001to Rs. 1000000                                                                                             20per cent

Above Rs.1000000                                                                                                          30per cent

 

For Women

Upto Rs.250000                                                                                                                NIL

Rs. 250001to Rs. 500000                                                                                                10per cent

Rs. 500001to Rs. 1000000                                                                                             20per cent

Above Rs.1000000                                                                                                          30per cent

 

For Residentindividual of 60 years or above but below 80 years

Upto Rs. 300000/-                                                                                                            NIL

Rs. 300001 to Rs. 500000                                                                                                10per cent

Rs. 500001 to Rs. 1000000                                                                                             20per cent

Above Rs. 1000000                                                                                                          30per cent

 

For Residentindividual of  80 years or above

Upto Rs. 500000/-                                                                                                            NIL

Rs. 500001 to Rs. 1000000                                                                                             20per cent

Above Rs. 1000000                                                                                                          30per cent

 

Further, section 87A provides for Income Tax Rebate ofRs. 2000 to individuals earning income below Rs. 5 lakh. This Rebate of Rs.2000 would be given from the Total Tax Payable by an individual. It ispertinent to note here that Rs. 2000 is to be subtracted from Total Tax Payableand not from the Total Income of the individual.

Method of Income Tax Calculation for the year 2013-14


Method ofTax Calculation:

Every   person who is responsible for  paying   any income   chargeable   underthe head “Salaries” shall deduct income-tax on the estimated income of the assesseunder the head “Salaries” for the financial year 2013-14. Theincome-tax is required to be calculated on the basis of the rates givenabove, subject to the provisions related to requirement to furnish PANas per sec 206AA of the Act, and shall be deducted at   the time ofeach payment. No tax, however, will be required to be deducted at source in  any  case unless the  estimated salary incomeincluding   the value of perquisites, for thefinancial year exceeds Rs. 2,00,000/- or Rs.2,50,000/- or Rs. 5,00,000/-,as the case may be, depending upon the age of the employee.(Sometypical examples of computation of tax are given at Annexure-I).

Payment of Tax on Perquisites by Employer:

An option has been given to the employer to pay the tax onnon-monetary perquisites given to an employee.  The employer may, at itsoption, make payment of the tax on such perquisites himself withoutmaking any TDS from the salary of the employee. However, the employer willhave to pay the tax at the time when such tax was otherwise deductible i.e.at the time of payment of income chargeable under the head “salaries”to the employee.

Computation of Average Income Tax:

For the purpose  of  making  the payment  of  tax mentioned in para 3.2 above, tax  is tobe determined at the  average  of   income tax  computed on the  basis of rate in force  for the financial  year, on  the  income chargeable under   the  head  “salaries”,including the  value of perquisites for  which tax  has beenpaid by the employer himself.

Illustration:

The income chargeable under the head “salaries”of an employee below sixty years of age for the year inclusive of allperquisites is Rs.4,50,000/-, out of which, Rs.50,000/- is on account ofnon-monetary perquisites and  the employer opts to pay the tax on suchperquisites as per the provisions discussed in para 3.2 above.

STEPS:

Income Chargeable under the head “Salaries”inclusive of all perquisites

Rs.  4,50,000/-

Tax on Total Salary (including Cess)

Rs.    25,750/-

Average Rate of Tax [(25,750/4,50,000) X 100]

5.72%

Tax payable on Rs.50,000/= (5.72% of 50,000)

Rs.      2,861/-

Amount required to be deposited each month

Rs.      240 (Rs. 238.4) =2881/12)

The    tax so   paid by theemployer shall be deemed to be TDS made from the salary of the employee.