The document provides steps to calculate income tax in India. It explains how to calculate gross income, donations, savings, and tax amount based on income slabs. It provides examples of calculating tax for individuals with different incomes and age groups. It also discusses tax saving investment options under Section 80C like mutual funds, PPF, insurance etc. and their benefits over fixed returns.

1. Image here Taxation (2010-11)

2. Learn how to calculate your Income Tax Step I : Gross Income Calculate your Annual Income. (Monthly Income * 12) Step II : Donations Calculate the total donations you have made towards various institutions in accordance to Income Tax Rules . Step III : Savings Calculate your total savings. This may include all the savings and investments mentioned in Income Tax Saving Schemes Sections .

3. Step IV : Income Tax Learn how to calculate your Income Tax Choose the slab according to your income and calculate your Income tax. Income tax slabs 2009-2010 (for Men) in India: Income tax slabs 2009-2010 (for Women) in India Income Tax Slab (in Rs.) Tax 0 to 1,60,000 No Tax 1,60,001 to 3,00,000 10% 3,00,001 to 5,00,000 20% Above 5,00,000 30% Income Tax Slab (in Rs.) Tax 0 to 1,90,000 No Tax 1,90,001 to 3,00,000 10% 3,00,001 to 5,00,000 20% Above 5,00,000 30%

4. Income tax slabs 2009-2010 (for Senior Citizens) in India: Step VII: Education Cess Add 3 % of your taxable income as the Educational Cess to the new Income Tax amount calculated in step VI. Learn how to calculate your Income Tax Income Tax Slab (in Rs.) Tax 0 to 2,40,000 No Tax 2,40,001 to 3,00,000 10% 3,00,001 to 5,00,000 20% Above 5,00,000 30%

5. TAX CALCULATION Example 1: Mr. Kuldeep is 35 year old and earning 8 lac annually. (Male) Calculation Learn how to calculate your Income Tax Tax on Income up to 1,60,000 Nil Tax on Income between 1,60,000 - 3,00,000 (@ 10%) 14,000 Tax on Income between 3,00,000 - 5,00,000 (@ 20%) 40,000 Tax on Income between 5,00,000 - 8,00,000 (@30%) 90,000 Total 1,44,000 Educational Cess (@ 3% of Total Tax) 4,320 Net Tax Payable 1,48,320

6. Example 2: Mrs. Harminder Kaur is 32 year old and earning 12 lac annually. (Female) Calculation Learn how to calculate your Income Tax Tax on Income up to 1,90,000 Nil Tax on Income between 1,90,000-3,00,000 (@ 10%) 11,000 Tax on Income between 3,00,000-5,00,000 (@ 20%) 40,000 Tax on Income between 5,00,000- 12,00,000 (@30%) 2,10,000 Total 2,61,000 Educational Cess(@ 3% of Total Tax) 7,830 Net Tax Payable 2,68,830

7. Example 3: Mrs. Rajesh is 67 years old and earning 8 lac annually. (Senior Citizen) Calculation Learn how to calculate your Income Tax Tax on Income up to 2,40,000 Nil Tax on Income between 2,40,000-3,00,000 (@ 10%) 6,000 Tax on Income between 3,00,000-5,00,000 (@ 20%) 40,000 Tax on Income between 5,00,000- 8,00,000 (@30%) 90,000 Total 1,36,000 Educational Cess(@ 3% of Total Tax) 4,080 Net Tax Payable 1,40,080

8. Slab Revision Agricultural income is exempt from income-tax. For the Assessment Year 2009-10 2009-2010 Taxable income slab (Rs.) Rate (%) Up to 1,60,000 (for Men) Up to 1,90,000 (for Women) Up to 2,40,000 (for Individual of 65 years and above) NIL 1,60,001 – 3,00,000 10% 3,00,001 – 5,00,000 20% 5,00,001 upwards 30%

9. Options Available under Section 80 C Apart from these, insurance premium on life insurance policies and principal component of housing loan are also eligible for Section 80 C benefit. Investment Options Returns (%) Lock In Tax On Income Minimum Investment Maximum Investment Mutual Fund(ELSS) 15% - 18% 3 Yrs Tax Free Dividend & Returns Rs.500 No Limit PPF 8% 15 Yrs Tax Free Returns Rs.500 Rs.70000 NSC 8% 6 Yrs Taxable - Interest Rs.100 No Limit Fixed Deposit 6.25 to 7.5% 5 Yrs Taxable – Interest Rs.200 No Limit Senior Citizen Saving Scheme ( Min. age 55 Yrs) 9% 5 Yrs Taxable – Interest Rs.1000 Rs.15 Lacs

10. Tax Saving Investments are long term Investment What is the Advantages of doing Smart Investment In Mutual Fund ELSS? Take Example of Two Sisters Karishma & Kareena Both Invested Rs.70000 Every Year.

11. Karishma MF (ELSS) Market Driven Smart Decision Making Kareena PPF 8% FIXED RETURNS Investment Started from 14 th Feb 2002 to 14 th Feb 2011 Invested Rs. 7 Lacs in 10 Years

12. Stock markets swings from 3000 to 21000, Back to 8000 and now around 18200. Smart Decision Making Kareena feels proud on his decision of not investing in ELSS and choosing PPF. So you will also agree with Kareena as PPF has given Him fixed return of 8% over the years.

13. 34.52 Lacs 10.87 Lacs Top 10 ELSS Schemes have delivered 22.67% Average Yearly Returns in 10 Years. Karishma has made almost 3 times more money than Kareena by investing in MF ELSS schemes rather than PPF Smart Decision Making

14. ELSS : Best way of saving taxes. Based on Tax Slab for FY 09-10 Assuming an investment of Rs. 100,000 in ELSS in this Financial Year for male below 65 year age Your earning Tax without ELSS Tax with ELSS You save 250,000 9,270 0 9,270 300,000 14,420 4,120 10,300 400,000 35,020 14,420 20,600 800,000 1,48,320 1,17,420 30,900 1,500,000 3,64,620 3,33,720 30,900

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