Calculation of Income Tax for F.Y 2008-09(A.Y 2009-10)

How to calculate Income Tax for 2008-09(2009-10)?

What are the income tax slabs?

Calculating income taxes is very easy. All you need to know is which tax slab will be applicable to you. But, before we get to tax slabs, lets understand in 3 quick steps how to calculate taxes.

Step 1: Identify and tabulate all sources of income – salary, business income, interest, rental, capital gains

Step 2: Identify which deductions and tax savings are applicable to you – 80C deductions, interest repayment

Step 3: Apply the relevant tax slab depending upon your sex and age, after taking the deductions and savingsIn addition to the tax payable on income, you will also have to pay a Surcharge (if your income exceeds Rs.10 lakhs in case of individuals) and an Education Cess levied by the Government on all tax payers. If you are a salaried employee, chances are that your employer has already deducted these in your monthly pay. The tax slab will help you identify how much of your income will be available to you tax free and thereafter what tax rate will be charged to the remaining income. If you are a woman or a senior citizen, you will be entitled to a larger tax-free amount. The following tables will help you identify which tax slabs are relevant for you:
Resident Individual below 65 years of age or HUF (tax free income up to the first Rs.1.50 lakhs)
Resident Woman below 65 years of age (tax free income up to the first Rs.1.80 lakhs)
Resident Senior Citizens – 65 years of age or above (tax free income up to the first Rs.2.25 lakhs)
As shown below, after the initial tax-free amount, different slabs of your income will be charged at different rates.
For Resident Individual below 65 years of age or HUF
Net Income Range Income Tax Plus Surcharge Plus Education Cess
Up to Rs.1,50,000 Nil Nil Nil
Rs.1,50,001 to Rs.3,00,000 10% of income above Rs.1,50,000 Nil 3% of income tax
Rs.3,00,001 to Rs.5,00,000 Rs.15,000 + 20% of income above Rs.3,00,000 Nil 3% of I.T Rs.5,00,001 to Rs.10,00,000 Rs.55,000 + 30% of income above Rs.5,00,000 Nil 3% of I tax
Above Rs. 10,00,000 Rs.2,05,000 + 30%

of income above Rs.10,00,000 10% of IT 3% of IT and SC

For Resident Women below 65 years of age
Net Income Range Income Tax Plus Surcharge Plus Education Cess
Up to Rs.1,80,000 Nil Nil Nil
Rs.1,80,001 to Rs.3,00,000 10% of the income above Rs.1,80,000 Nil 3% of income tax
Rs.3,00,001 to Rs.5,00,000 Rs.12,000 + 20% of

the income above Rs.3,00,000 Nil 3% of IT
Rs.5,00,001 to Rs.10,00,000 Rs.52,000 + 30% of

the income above Rs.5,00,000 Nil 3% of income tax
Above Rs.10,00,000 Rs.2,02,000 + 30% of

the income above Rs.10,00,000 10% of IT 3% of IT and SC

For Resident Senior Citizens ( 65 years of age and above, including those who turn 65 at any time during the Financial Year 2008-09)
Net Income Range Income Tax Plus Surcharge Plus EC
Up to Rs.2,25,000 Nil Nil Nil
Rs.2,25,001 to Rs.3,00,000 10% of the income above Rs.2,25,000 Nil 3% of income tax
Rs.3,00,001 to Rs.5,00,000 Rs.7,500 + 20% of

the income above Rs.3,00,000 nil 3% of income tax
Rs.5,00,001 to Rs.10,00,000 Rs.47,500 + 30% of

the income above Rs.5,00,000 Nil 3% of income tax
Above Rs.10,00,000 Rs.2,05,000 + 30% of

the income above Rs.10,00,000 10% of IT 3% of IT and SC
Do one need to file a tax return?
You will need to file an annual tax return if you fall into one of the following categories:
1. If you are an individual whose annual income, before tax deductions, is above any of the following cases
Rs.150,000 for all resident Indians, other than the two cases mentioned below
Rs.180,000 for resident women
Rs.225,000 for resident senior citizens
2.If you need to file for a tax refund for tax deducted at source
3.If you get a notice from the Income Tax Department for return of income
4.If you want to claim carry forward losses from the current year in future years