. Income Tax Calculator
1. Basic Info

Income tax slab rate for AY 2016-17:


For individuals below 60 Years of Age


Income Tax Slab Income Tax Rate
Income up to Rs. 2,50,000 Nil
Income between Rs. 2,50,001 - Rs. 500,000 10% of Income exceeding Rs. 2,50,000
Income between Rs. 500,001 - Rs. 10,00,000 Rs. 25,000 plus 20% of Income exceeding Rs. 5,00,000
Income above Rs. 10,00,000 Rs. 1,25,000 plus 30% of Income exceeding Rs. 10,00,000

For Resident Senior Citizens (Age 60 years or more but less than 80 years)


Income Tax Slab Income Tax Rate
Income up to Rs. 3,00,000 Nil
Income between Rs. 3,00,001 - Rs. 500,000 10% of Income exceeding Rs. 3,00,000
Income between Rs. 500,001 - Rs. 10,00,000 Rs. 20000 plus 20% of Income exceeding Rs. 5,00,000
Income above Rs. 10,00,000 Rs. 1,20,000 plus 30% of Income exceeding Rs. 10,00,000


For Resident Super Senior Citizens (Age 80 years or more)


Income Tax Slab Income Tax Rate
Income up to Rs. 5,00,000 Nil
Income between Rs. 500,001 - Rs. 10,00,000 20% of Income exceeding Rs. 5,00,000
Income above Rs. 10,00,000 Rs. 1,00,000 plus 30% of Income exceeding Rs. 10,00,000


• A rebate of Rs. 2000 (Rs. 5000 form A.Y. 2017-18) is available for individual (who is resident in India) with income less than Rs. 5 lacs u/s 87A of Income Tax Act.
• If you attain the age of 60 years (senior citizen) or 80 years (super senior citizen) anytime during this financial year, your age will be regarded as 60 years/ 80 years as the case maybe.
• Education cess @ 3% of the total of income tax for all individuals will be applicable.
• Surcharge of 12% (15% for A.Y. 2017-18) will be applicable if your total income exceeds Rs. 1 crore.

How to calculate TDS amount?


In order to calculate the amount of TDS per month we need to calculate the salary for the year and deduct all the amounts that are exempt from taxes and other deductions that reduce the taxable income. In order to calculate this amount the accounts department asks for some tax declarations that need to be given based on the amount of investments that you will make during the year. Apart from this you may also estimate the amount of certain expenses like travel and rent for the year. Rent amount can be calculated based of the rent agreement. Other expenses like medical, travel expenses and others that may give you some tax exemptions, can be estimated basis past year expenses. Once all these figures are given, the accounts department calculates your tax liability. Here is an example explaining the computation of Income Tax.


Calculating Income Tax to be deducted from Salary:


Mr. Girish, aged 45 years, submitted the details of his income and investment for financial year 2015-16, as under:


Particulars Amount (In Rupees)
Basic Salary 6,00,000
Dearness Allowance 2,40,000
House Rent Allowance 1,80,000
Transport Allowance 24,000
Employer’s contribution towards PF 1,00,000
Leave Travel Allowance 75,000
Deposit in Public Provident Fund Account (PPF) 1,50,000
Mediclaim Premium paid (for self) 24,000

Mr. Girish pays rent of Rs.10,000 p.m. in Pune. He travelled to Kerala with his family on a holiday trip. Tickets for which cost him Rs.40,000.


Calculation of taxable income:


Particulars Amount Amount
Basic pay 6,00,000
+ Dearness allowance 2,40,000
+ Transport Allowance
(-) Exemption
24,000
(19,200)
4,800
+ House Rent allowance
(-) Amount of HRA exempted
Least of the following is exempt-
1. Actual HRA received – Rs.1,80,000
2. Rent paid in excess of 10% of (Basic+DA) – Rs.36,000 (Rs.1,20,000 – Rs.84,000)
3. 40% of (Basic+DA) – Rs.3,36,000
1,80,000
(36,000)
1,44,000
+ Leave travel allowance
(-) Amount exempted on Leave travel allowance
75,000
(40,000)
35,000
Gross Salary 10,23,800
Less: Deductions under Chapter VI A
Under Section 80C
1. PF Contribution
2. Deposit in PPF Account
Maximum deduction available
Under Section 80D
Mediclaim premium paid
1,00,000
1,50,000
(1,50,000)
(24,000)
Taxable Income Under Salaries 8,49,800
Tax on Salary (for the year) 97,810
TDS amount per month = (Tax for the year/12) 8,151

Calculation of tax liability:


The taxable income of Mr. Girish is Rs. 8,49,800. The tax he is required to pay on this income will be calculated as follows:


Up to Rs 2,50,000 Exempt from tax 0
Rs 2,50,000 - Rs 5,00,000 10% (10% of Rs 5,00,000 (-) Rs 2,50,000) Rs.25,000
Rs 5,00,000 - Rs 10,00,000 20% ( 20% of Rs 8,49,800 less Rs 5,00,000) Rs.69,960
More than Rs Rs 10,00,000 30% 0
Education Cess 3% of total tax (3% of Rs 25,000 + Rs 69,960) Rs.2,849
Total Income Tax Rs 25,000 + Rs 69,960 + 2,849 Rs. 97,810

Hence, the total Income Tax liability for Mr. Girish is Rs. 97,810 for the FY 2015-16.


What is an Assessment Year? What is the difference between an Assessment Year and Previous Year?


AY is the year in which you file returns . It is the year in which the income that you have earned in the Financial Year that just ended will be evaluated. For instance, if you have had an income between 1 April 2015 and 31 March 2016, 2016-17 will be the AY.
As the word ‘previous’ means ‘coming before’, hence it can be simply said that the Previous Year is the Financial Year preceding the Assessment Year. e.g., for Assessment Year 2016-2017 the Previous Year should be the Financial Year ending 31st March 2016.


Who is a resident of India?


If you have spent more than 182 days in India for that FY then you are considered as a resident irrespective of your citizenship or;
If you were in India for 60 days or more during that Financial Year and have been in India for 365 days or more during 4 previous years immediately preceding the relevant Financial Year.


What is considered as income?


If you are a salaried person, your salary from your employer will be treated as income. On the other hand for a businessman, the net profit will be considered as income.
In all there are five heads for income as follows:
1) Salary
2) Income from house property
3) Income from business/profession: This applies for entrepreneurs and small business people who don't get a regular salary income. Some examples are doctors, lawyers, etc.
4) Capital gains such as profit from sale of house, land, gold, etc.
5) Income from other sources such as interest received on bank deposits, winnings from lotteries or game shows, etc.


Why should I pay income tax?


When your income exceeds the threshold limit set by the income tax department that is exempt from taxes, you will have to pay tax on the excess income you earn. It is calculated for the period from April 1 to March 31. This period is referred to as a Financial or Previous year. The tax money garnered is used for the country's development.


Do I need to pay tax on gifts received?


Gift received in cash, which exceed Rs 50,000, are taxable. However, gift tax is not applicable in the following situations:
1) Gifts in cash or kind whose value is less than Rs 50,000
2) Gifts received on marriage day from friends or relatives
3) Gifts received from relatives as defined under the act


What are Capital Gains?


Capital gains are gains made by selling capital assets, such as equities, property, land, gold, etc. Under Indian income tax laws, you need to pay income tax on capital gains. The tax calculation is dependent on whether you have held the asset for a long term or short term as defined by tax laws.


What are receipts? Are all receipts considered as income?


A receipt is your entire income before tax deductions. Not all receipts are considered as income. Basically, they are of two kinds:
1. Capital receipt: This is the income earned by selling the source or asset. For example, income earned from selling a property, gold, etc.
2. Revenue receipt: Income from source such as salary, interest accrued on deposits, rent from property is termed as revenue receipt.


What are the fines/penalties if I file income tax returns after the due date?


You may have to pay a penalty up to Rs. 5,000 and interest on tax due @1% per month of default.


If I have paid more tax when filing my returns, will it be refunded?


Yes, the excess amount will be refunded by cheque or direct credit into your bank account.


What are donations?


If you make any donations to certain qualified institutions or causes, you can claim a tax benefit on the donated amounts. Depending on the receiver of the donation, your donation would qualify either for 100% deduction or 50% deduction.

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