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  • Category: Tax Planning

    Need to know the Income tax calculation

    Want to know how to calculate income tax from net salary? Looking out for detailed calculation procedure here? Find responses from experts for your query here.

    I have a query regarding The income tax deductions.

    My Net Salary is 36200 per month after all the deductions except the Income tax.

    Can you please let me know the approx deduction per month?

    How much amount is taxable?
  • Answers

    7 Answers found.
  • For a salaried person Income Tax calculations are simple and straight but for this certain data is required regarding certain savings made by him in specified categories which are to some extent or to limit deductible from the income before calculation of the tax.

    Anyway presently the limit for this deduction is Rs 1.5 lakh per year and I assume that you have done some saving in this category which includes savings in PPF, Post Office deposits like NSc, LIC premium paid etc etc. So we can deduct this amount from your earnings. Let us say you have saved in this category Rs 40000.

    Now the total earnings from salary in the year is 12 x 36200 = Rs 434400.

    So the taxable income is 434400-40000 = Rs 394400

    Now upto Rs 250000 there is no tax and after that the first slab rate upto Rs 500000 is 5% .

    So the tax is 5% of (394400-250000) which comes to 7220.

    So your employer should deduct around Rs 600 per month from your salary and any difference in final tax can be adjusted in the last month.

    If you increase your savings from 40000 to more amount then your tax will decrease accordingly.

    If your taxable income comes below Rs 3.5 lakh then you will be entitled for an additional tax rebate of Rs 2500 on your tax amount.

    In this calculation we have not taken account of your PF deductions and other small amounts like children education allowance etc which are also to be taken in calculation but as these are minor amounts they will make little difference.

    One important thing we have to remember is that this part we have discussed is only between you and your employer. If you have any other income from any other source like interest on bank FDs, income from share market etc then that is also to be added by you and to be shown at the time of filing IT return.

    Knowledge is power.

  • Income Tax Slabs for Individual Tax Payers & HUF (Less Than 60 Years Old) for FY 2018-19 –
    Income Tax Slabs Tax Rate Health and EducationCess
    Income up to Rs 2,50,000* No tax
    Income from Rs 2,50,000 – Rs 5,00,000 5% 4% of Income Tax
    Income from Rs 5,00,000 – 10,00,000 20% 4% of Income Tax
    Income more than Rs 10,00,000 30% 4% of Income Tax
    Surcharge: 10% of income tax, where the total income exceeds Rs.50 lakh up to Rs.1 crore.
    Surcharge: 15% of income tax, where the total income exceeds Rs.1 crore.

    Rs.36,200 is your taxable salary for a month. So Salary for annum is 36200X12= 434400 rupees.
    The tax on this income will be 434400-250000= 1,84,400 rupees. Tax for this @5% is Rs.9,220/- +@4% cess = Rs.9588/-
    But you can save up to Rs.1,50,000 under 80C, you need not pay any tax.
    You have not mentioned anything about the tax. So you calculate based on your savings in 80C.
    The maximum tax is Rs.9588/- per year.

    always confident

  • The notional monthly TDS for IT will be about Rs 800/- as per calculation based on certain assumptions as detailed in the last para of this answer.

    Please read on for details..
    Your question does not give the required details to answer the question in specific. Hence I shall give a general answer.
    To calculate the taxable income you need the following details
    1. Total Gross salary for the FY ( before getting F16 from employer you can be taken adding the gross salary received during the FY).
    2. You have to add any other income received during the FY(like interest on fixed deposits, rent received etc)
    3. Some salaried employees may get some perquisites apart from salary like concessional accommodation, interest free loans, other benefits in lieu of salary etc. If so the perquisite values have to be added as income.
    4. Total of above all is the gross salary

    Now you can subtract certain (permitted exemptions) from the income to arrive at net taxable income.

    Those which are relevant to salaried for FY 2018-19 persons are:
    1. Professional Tax and Entertainment allowance, a standard deduction of Rs 40000/-
    2. Amount of housing loan interest paid on self occupied house.
    3. Amounts remitted towards PF, pension, Life Insurance premium, NPS premium etc.
    4. Deduction /remittance towards Medical insurance
    5. Interest paid on Education Loan
    6. EMI of Housing loan.
    7. LTA if Leave Travel undertaken and the amount of allowance spent actually

    Please note that there are some maximum ceilings and terms and conditions for the above exemptions.

    Reducing the actual exemptions or the ceiling whichever is less from you can get the net taxable income.
    On this you have to calculate the tax as per existing slab and rates.

    For the current FY 2018-19 it is:
    Upto 2.5 lakhs –Nil
    For the amount from 2 L o 5 L - 5%
    From 5 L to 10 L – 20%.

    Calculate the total payable tax. There will be a cess of 4 % on this tax amount. The total of the two is the amount of tax. You can reduce any TDS recovered and credited to your a/c in the FY. If the difference is excess, you claim refund. If it is short you have to remit the amount to IT as self assessment tax before filing return.

    Coming to the monthly TDS that will be recovered by your employer, They will multiply your monthly gross salary by 12 to arrive at your Gross salary. Then they will apply the annual exemptions as per the data ready with them like PF, salary deducted insurance premium, medical insurance premium etc and also those eligible exemptions that you informed them with proof. Then they will arrive at the notional income Tax payable as per above explained. The notional tax will be divided by 12 to arrive at the monthly Tax deduction.
    Some employers have software which can revise, recalculate and readjust the TDS as per the progressing situations also.

    I want to re-emphasise that it is not the net salary, but the Gross salary that is taken to start IT calculations, and exemptions applied on Gross salary to arrive at net taxable salary.

    Now, assuming that the 36200/- is the net monthly taxable amount arrived by applying all exemptions (including std deduction )and dividing the net taxable annual income by 12,then the Tax calculations will be
    Net taxable annual income= 36200 x 12= Rs 434400.
    Tax for amt upto 2.5 L- NIL
    (Slab 3 L to 5 L -5%) Actual 434400/- hence falls in this slab
    So for amt 434400-250000, ie. %% on 184400 =9220/-
    Cess 0f 4% on above 9220 (rounded to) = .370
    Total notional tax liability =9590

    Monthly notional TDS = 9590 /12= 800 rs per month. This is subject to change as per the actual differing from assumptions.

  • To get an exact answer to your question you must provide definite information. As per the information provided by you for tax computation it is just a figure which leaves everything to assumptions.
    Every answer to your query will be correct but at the same time incorrect.

    You will never get the exact monthly TDS on your income with the amount of information available.

    Now as per details given your annual salary is Rs. 4,34,400/- after all deductions (including HRA and standard deduction of Rs. 40,000)
    I am assuming that you will save around Rs. 1,00,000 as investment under section 80C to 80U for which deduction is available for LIC, PPF, Sukanya Samruddhi Yojana, FD 5 years, NSC, etc.

    Now your net taxable salary will be Rs. 3,34,400/-

    You will fall in slab of 5% as your net taxable income is a below Rs. 5,00,000/-
    Total tax will be computed as under:

    Upto Rs. 2,50,000/- : Rs. NIL
    On Rs. 84,400/- : Rs. 4,220/-
    Add : Cess @4% on above i.e. Rs. 170

    Total tax will be Rs. 4,390/- for the complete year.
    Now the TDS is deducted on average basis on salary income under section 192B of the Income Tax Act, hence your monthly TDS will be Rs.366/- p.m.

    Now there are various answers based on various assumption and you can get a fair idea of your tax but not the exact answer. Also the answers might confuse you if you do not know much about the Income Tax Act 1961.

    Live before you leave.

  • Lets understand first deductions are applicable on your gross income of year. So after deductions whatever amount remaining if it is more than Rs. 2,50,000 then you have to pay taxes. Now tax will be paid gradually by dividing total annual tax by 12 months so that you won't be having pressure in end of year. So you see your TDS cut will be very low.

    Life Is Beautiful

  • 1. Net salary: Rs. 36200/- per month
    2. Yearly salary: Rs. 36200x12= Rs.434400/-
    3. Standard Deduction: Rs. 40,000/-
    4. The amount on which Income Tax will be charged: Rs 394400/-
    5. No Tax on first Rs. 2,50,000/-
    6. So, Tax on the remaining: Rs.1,44,400/- @ 5%
    7. Total Tax calculated: Rs. 7220/-
    8. Cess @ 4%: Rs, 289/-
    9. So, total Tax calculaed: Rs. 7509/-

    But please note that this calculation may not be fully accurate because you have not indicated your savings under Section 80C, Health Insurance Premium (if any) to be deducted from the Tax under Section80D, NPS deduction which is also eligible to get tax benefit under Section80CCD, and other deductions like EMI on Home Loans, if any.

    "If you are killed in action, you go to Heaven. If you win, you rule this Earth (as beautiful as Heaven). That is why, O son of Kunti, take a firm resolve and fight!"-- Shrimad Bhagwad Gita

  • I will not give you exact figures as don't know your full financial details. For knowing the tax you have to pay.

    A. You need to have all the sources of income that is in your name
    Salary, interest from savings, deposits, capital gains ( short term, shares and mutual funds), a sale of property, rental income, prizes/lotteries etc.
    B. From this list, you have to exempt all the incomes that can be listed under exemptions

    1.Leave/Travel Allowance
    This tax exemption is for work related travel and does not apply for recreation/food and shopping during these trips within the country.

    2.HRA: House rent allowance can be utilised to the full benefit, if you are living in a rented home. If your company pays your HRA, then it is tax exempted provided you do not stay in your own home

    3.Investment/Expenses exemptions that can be claimed
    Life insurance (80C), Medical insurance(80D), Employee provident fund, pension plans, PPF, NSC, FDs, Home loan EMI, Car Loan, Educational loans, ,NSP(80CCD)children's education fees, Donations to charities (under 80TTA), Professional Indemnity, study related conference related to your field (not tours/holidays)

    4.Standard deduction: This is the fixed amount of 40,000.00 that is allowed for a salaried class, this replaces the previous medical bills exemption section.

    5. Loss of income: loss in shares and investments etc.

    C.From your Gross salary + other incomes, the above would be deducted (A-B), including the 10% TDS that you have paid and the authorities arrive at the net taxable income.

    D.If it comes within the 3-5 lakh/annum ( more likely in your case), the tax that you are likely to pay is 5% of your net taxable income and from this amount, the cess would be of 4%

    You can visit the government website and calculate this yourself
    You can also find out more about the exemptions and claims you can make by reading the various subheadings here (

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