TIPS on Income Tax

TIPS ON INCOME TAX FOR RUNNING STAFF FOR THE YEAR 2010-2011.

INCOME TAX SLABS:-

Taxable Income

Up to Rs. 1, 60,000/- _______________ No Tax

From Rs. 1, 60,001/- to 5, 00,000/- ____________ ___ 10%of amount exceeding

Rs.1, 60,000/-.

From Rs. 5, 00,001/- to 8, 00,000/- ________________ Rs. 34,000.00+ 20% of amount

Exceeding Rs.5, 00,000/-

For women:-

Up to Rs. 1, 90,000/- _______________ No Tax

From Rs. 1, 90,001/- to 5, 00,000/- ____________ ___ 10%of amount exceeding

Rs.1, 90,000/-.

From Rs. 5, 00,001/- to 8, 00,000/- ________________ Rs. 31,000.00+ 20% of amount

Exceeding Rs.5, 00,000/-

I. Income Exempted From tax:-

1. Amount received under Life Insurance Policy.

2. Amount received from PF (temporary or final withdrawal).

3. Agricultural income.

4. Transfer Allowance.

5. Cell Allowance.

6. House Rent Allowance---subject to conditions,

Least of the following amount can be exempted if you submit receipt of rent paid.

a.) Actual HRA received , or

b.) Rent paid in excess of 10%of salary , or

c.) An amount equal to

n 50% of salary if accommodation is at Bombay, Calcutta, Delhi or Madras.

n 2/5^th of salary if accommodation at any other place.

7. Mileage: - 70% of mileage up to a maximum of Rs. 10,000/- per month is exempted.

(To find out taxable amount in mileage –

@ Multiply mileage amount with 0.3, if your mileage is below Rs. 14,285/-

@ Deduct Rs.10, 000/- from mileage amount, if your mileage is Rs. 14,286/- or above.)

8. Children Education Allowance: Rs.100 per month per child (up to a Max of two children.)

9. Children Hostel Allowance: Rs.300 per month per child (up to a Max of two children.)

10. Transportation Allowance: Rs 800 per month.

II. Permissible Deductions:-

1. Mediclaim premium ------------------------------------ Up to Rs. 15,000/-

2. Medical treatment for handicapped dependents---------- Rs.50, 000/- to 70,000/ according

to severity of disability.

3. Medical treatment for specified diseases like Cancer, AIDS, Parkinson etc.----Rs. 40,000/-

4. Entire interest paid on loan taken for higher studies.

5. Full donation to Prime Ministers Relief Fund.

6. Professional Tax in full.

7. Housing Loan Interest paid up to Rs. 1, 50,000/- (if loan taken on or after 01.04.1999) if

deducted from Gross Total Income.

8. Deduction up to 1,00,000/-is allowed for the amount paid or deposited in certain specified schemes like PF, LIC, Shares, Debentures, Mutual Funds, Pension Funds, National Saving Certificate (NSC), Principle amount repaid on Housing Loan, Tuition Fee for two children, etc..

9. An additional Rs. 20,000/- will also be deducted if invested in specific infrastructure bond.

i. Now calculate your Gross Total Income.

ii. Exempt income as shown in Para I.

iii. Deduct permissible amount as shown in Para II.

iv. Now calculate your tax as per the slab given.

v. Add 3% of Tax as educational cess.

This will be your tax. For more details refer IT Rules.

Prepared by Com. MM Roly.