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 $P{M}^{\prime }s$ 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, $Incometax=(Taxableincome-2,50,000)\times \frac{5}{100}=Rs9550$

Education cess $=9550\times \frac{2}{100}=Rs191$

Secondary and higher education cess $=9550\times \frac{1}{100}=Rs95.5$

$\text{Total tax to be paid = Income tax + education cess + secondary and higher education cess}$

$=9550+191+95.5=Rs9836.5$