Eight Examples For Income tax Calculation – 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

MORE DETAILS VISIT- law.incometaxindia.gov.in-Circular Page

Circular No. 8/2012, dated 5-10-2012