The same circular provides various illustrations for calculation of inome tax of salaried class. We have provided those examples here.
Illustrations provided by Income Tax Department for tax calculation for the year 2012-13 (Assessment Year 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 |
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