Question

Mr. Kartarsingh (age 48 years) works in a private company. His monthly income after deduction of allowances is Rs. 42,000 and every month he contributes Rs. 3000 to GPF. He has also bought Rs. 15,000 worth of NSC (National Savings Certificate) and donated Rs. 12,000 to the PM's Relief Fund. Compute his income tax.

Answer 1

Monthly Income = Rs 42,000
Gross annual income = Rs 42,000 $\times$ 12 = Rs 5,04,000
Applicable deductions:
Monthly GPF contribution = Rs 3000
Annual GPF contribution = Rs 3000 $\times$ 12 = Rs 36,000
NSC = Rs 15,000
Donation in PM's relief fund = Rs 12000
Total applicable deductions = Rs 36,000 + 15,000 + 12,000 = Rs 63,000
Total taxable income = Gross annual income $-$ total applicable deductions
= Rs 5,04,000 $-$ Rs 63,000 = Rs 4,41,000
Now the Total taxable income falls in the slab of 2,50,001 to 5,00,000.
So, Income tax = (Taxable income $-$ 2,50,000) $\times \frac{5}{100}$ = Rs 9550
Education cess = $9550\times \frac{2}{100}=\mathrm{Rs}191$
Secondary and higher education cess = $9550\times \frac{1}{100}=\mathrm{Rs}95.5$
Total tax to be paid = Income tax + education cess + secondary and higher education cess = 9550 + 191 + 95.5
= Rs 9836.5