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    Math Assignment

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    ambitzzlol20

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    Math Assignment

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    ambitzzlol20
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    Math Assignment

    Uploaded by

    ambitzzlol20

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    © All Rights Reserved
    Download as DOCX, PDF, TXT or read online from Scribd
    Download as docx, pdf, or txt
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    Math Assignment

    *INCOME TAX CALCULATION

    WHAT IS INCOME TAX CALCULATION?

    Income tax calculation helps you estimate your taxes based on your income after the union budget
    is presented.

    Union Budget: The Union Budget of a year, also referred to as the annual financial statement, it is a
    statement of the estimated receipts and expenditure of the government for that particular year.

    *How to calculate Income Tax:

    Income Tax Calculation for the Salaried:

    Income from salary is the sum of Basic salary+ HRA + Special Allowance + Transport Allowance+
    any other allowance.

    What is HRA?

    Salaried Individuals, who live in rented houses, can claim the House Rent Allowance (HRA) to lower
    their taxes- partially or wholly. This allowance is for expenses related to rented accommodation. If
    you don’t live in a rented accommodation, this allowance is fully taxable.

    What is LTA?

    Leave Travel Allowance or LTA allows individuals to claim tax exemption for a trip made within India
    for the taxpayer and his/her family under Section 10(5).

     Some components from your salary are exempt from tax, such as telephone bills
    reimbursement, leave travel allowance.
     On top of these exemptions, a standard deduction of Rs. 40,000/- was introduced in budget
    2018. This has been increased to Rs. 50,000 in budget 2019.
     In case you opt for the new tax regime, these exemptions will not be available to you.
     Let’s understand income tax calculation under the current tax slabs and new tax slabs by
    way of an example

    Nikhil receives a Basic Salary of Rs. 1,00,000 per month. HRA of Rs. 50,000. Special allowance of Rs.
    21,000 per month. LTA of Rs 20,000 annually. Nikhil pays a rent of 40,000 and lives in Delhi.

    Nature Amount Exemption/Deduction Taxable (Old Regime) Taxable (New


    Regime)
    Basic Salary 12,00,000 - 12,00,000 12,00,000
    HRA 6,00,000 3,60,000 2,40,000 6,00,000
    Special Allowance 2,52,000 - 2,52,000 2,52,000
    LTA 20,000 12,000(bills submitted) 8,000 20,000

    Standard Deduction - 50,000 50,000 -


    Gross Total Income 16,50,000 20,72,000
    from Salary
    To calculate Income Tax, include income from all sources. Include Income from:

     Salary
     House Property
     Capital gains
     business/ profession
     other sources

    Calculation of gross taxable income in India (New Regime):

    Nature Amount Total


    Income from Salary 20,72,000
    Income from other sources 20,000
    Gross Total Income 20,92,000
    Total tax on above (including 3,79,704
    cess)

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