Question

In the financial year 2015-16, Sudehanshu's annual income is Rs.$7,10,000$ (excluding house rent allowance). He deposits Rs.$9,000$ monthly in General Provident Fund (G.P.F) account. He also deposits RS.$80,000$ in his P.P.F account. Calculate the income tax paid by Sudhanshu while maximum limit of rebate on saving is Rs.$1.5$ lakh. Rates of income tax are as follows:
(i) Upto Rs.$2,50,000$ Income Tax Nil
(ii) From Rs.$2,50,001$ to RS.$5,00,000$ $10$% of income exceeding Rs.$2,50,00$
(iii) From Rs.$5,00,001$ to Rs.$10,00,000$ Rs.$25,000+20$% of increase exceeding Rs.$5,00,000$
In addition to it $3$% educational cess is charged on payable Income Tax.

Answer 1

Annuanl income = $Rs.710,000$

Taxable income = $710,000-9,000\times 12-80,000=Rs.512,000$

$\because$ the taxable income is greater than the maximum limit of rebate ie, $Rs.150,000$, there is no rebate on tax.

Income tax = $25,000+20\%ofRs.12,000=Rs.27,400$

Payable income tax=$27,400+3\%of27,400$=$Rs.28,222$

$\therefore$ Sudhanshu has to pay an income tax of $Rs.28,222$