Hi all,
Here I have attached the income tax regimes calculations and its slabs (new regime slab and old regime slab calculation).It will be useful to calculate the taxes for upcoming years. And also I have attached HRA(House rent allowance) calculation and where it is working? how it works?. Hope you all liked the presentation and i will upload the various types of sections. There are 298 sections in the income tax deductions and exemptions.
INCOME TAX REGIME CALCULATIONS -> NEW REGIME/OLD REGIME
1.
2. Income tax is a tax charged on the annual income of an
individual or business earned in a financial year.
The Income Tax system in India is governed by “The
Income Tax Act, 1961”.
Income tax is typically calculated for the previous year.
(Ex: If you are filing your tax return in 2024, you would
be reporting income and expenses for the tax year that
ended in 2023.)
There is a two types of taxes : Direct tax and indirect tax.
3.
4. Identify income from all sources
Identify and calculate exemptions and deductions
from income
Calculate Net taxable income
Compute income tax based on tax slab
Finalize income tax (Add CESS, Reduce Rebate)
6. EXEMPTIONS DEDUCTON
Section 10 of Income Tax Act.
Sec 80C – Investment Types
Sections such as 80C,80D,etc.
Exemption are not attached to taxable income, but deduction
are reduced from taxable income
7. Tax Exemptions :
•Leave Travel Allowance
•House Rent Allowance
•Children Education Allowance
•Hostel Allowance ,etc…
Tax Deduction :
•Standard Deduction (₹50,000)
•₹1.5Lakh (Section 80C,80CC and
80CCD(1) – EPF, PPF, ELSS, etc.
•Medical Insurance
•Interest on housing loan up to 2
lakhs (for self occupied) ,etc…
Tax Exemptions :
•Leave Travel Allowance
•House Rent Allowance
•Children Education Allowance
•Hostel Allowance ,etc…
Tax Deduction :
•₹1.5Lakh (Section 80C,80CC and
80CCD(1) – EPF, PPF, ELSS, etc.
•Medical Insurance
•Interest on housing loan up to 2
lakhs (for self occupied) ,etc…
Very few deductions available
Standard Deduction (₹50,000),..
Introduced in Budget 2023.
8. SECTIONS ELIGIBLE
INVESTMENTS FOR TD
MAXIMUM
DEDUCTION
80C
Investment made in Equity
Linked Saving Schemes,
PPF/SPF/RPF, Life
Insurance Premiums, etc.
Rs 1,50,000
80CCC
Payment made towards
pension funds
Rs 1,50,000
80CCD(1)
Payments made towards
Atal Pension Yojana or
other pension schemes
notified by government
Employed: 10% of basic
salary + Dearness
Allowance
Self-employed: 20% of
gross total income
80CCD(1B)
Investments in NPS
(outside Rs 1,50,000 limit
under Section 80CCE)
Rs 50,000
9. Salaried employees – Sec 10(13A)
Total HRA paid through salary
50% of Basic (METRO) or
40% of Basic (NON-METRO)
Rent – 10% Basic
Basic
salary
Received
Rs.20000
(*12)
Rs.240000
HRA
Received
Rs.10850
(*12)
Rs.130200
Actual Rent
Paid
Rs.8000
(*12)
Rs.96000
City of residence METRO
Total HRA
paid through
salary
Rs.130200
50% of the
basic salary
Rent – 10%
basic
Rs.240000
*(50/100)
120000
96000-
(240000*10/100)
72000
Total HRA - HRA Exemption = 130200 - 72000 = Rs.58,200
12. 87A REBATE
NET Taxable income
less than
SURCHARGE ON
INCOME TAX
NET Taxable income
more than
HEALTH AND
EDUCATION CESS ON
INCOME TAX
50,000 50 Lakhs
4%
13. Gross Salary 9,00,000
Standard
Deduction
50,000 (-)
HRA Exemption 1,95,000 (-)
Gross Salary-
Exemptions
6,55,000
Interest From
Deposits
70,000 (+)
Gross total
Income
7,25,000
PPF + EPF
(80C)
1,00,000 (-)
Medical
Insurance
25,000 (-)
Net Taxable
Income
6,00,000
9,00,000
2,45,000
6,55,000
70,000
7,25,000
1,25,000
6,00,000
14. 2,50,000
No Income Tax
2,50,000
2,50,000
5,00,000
5%
Income Tax
12,500
1,00,000
6,00,000
20%
Income Tax
20,000
+
Income Tax 32,500
Net taxable
income slabs
Tax
rate
Upto ₹2.5
Lakhs
0%
₹2.5 Lakhs –
₹5Lakhs
5%
₹5 Lakhs -
₹10 Lakhs
20%
> ₹10 Lakhs 30%
Net Taxable
Income
6,00,000
33,800
Total Income
Tax Amount CESS 1300
