Question

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

Answer 1

Monthly Income = ₹ 42,000
Gross annual income = ₹ 42,000 × 12 = ₹ 5,04,000
Applicable deductions:
Monthly GPF contribution = ₹3000
Annual GPF contribution = ₹ 3000 × 12 = ₹ 36,000
NSC = ₹15,000
Donation in PM's relief fund = ₹12000
Total applicable deductions = ₹ 36,000 + 15,000 + 12,000
= ₹ 63,000

Total taxable income = Gross annual income - total applicable deductions
= ₹ 5,04,000 - ₹ 63,000
= ₹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) × $\frac{5}{100}$ = ₹ 9550
Education cess = 9550 ×$\frac{2}{100}$ = ₹ 191

Secondary and higher education cess = 9550 × $\frac{1}{100}$ = ₹ 95.5

Total tax to be paid = Income tax + education cess + secondary and higher education cess

= 9550 + 191 + 95.5
= ₹9836.5