The income tax that a person needs to pay is calculated from the Net income or Taxable income. You can get this taxable income once you deduct all the deductions which come under section 80 from gross total income. Hence the first step in calculating the income tax would be to calculate gross total income.
Gross total income (GTI)
Gross total income is calculated by taking into consideration five heads of income they are
Add up incomes from each head to get gross total income. For most of assessees they will be having income from all the heads of income except third one or income from business or profession.
Once you get the gross total income all you need to do is deduct all the exemptions so as to get the taxable income.
In order to plan effectively, you'll need to estimate your personal and business income for the next few years. This is necessary because many tax planning strategies will save tax dollars at one income level, but will create a larger tax bill at other income levels. You will want to avoid having the "right" tax plan made "wrong" by erroneous income projections. Once you know what your approximate income will be, you can take the next step: estimating your tax bracket
Tax slabs as per income tax act 2009
For Male Tax Payers
For Female Tax Payers
For Senior citizens Tax Payers
Note: education cess of 3% will be applicable to all the tax payers and surcharge of 10% was applicable to all those tax payers whose income is above 10 lakh rupees but for calculation of Income tax for the assessment year 2010-11 the surcharge has been removed.
For details : Jain Investment - Money Intellect - Systematic Investment Plan
Thanks
Yamini Asoor
http://yummyzblog/blogspot.com
Gross total income (GTI)
Gross total income is calculated by taking into consideration five heads of income they are
- Income from Salary
- Income from house property
- Income from business / Profession
- Income from Capital Gains
- Income from Other sourc
Add up incomes from each head to get gross total income. For most of assessees they will be having income from all the heads of income except third one or income from business or profession.
Once you get the gross total income all you need to do is deduct all the exemptions so as to get the taxable income.
How a tax plan works ??
- Reducing the amount of taxable income
- Reducing your tax rate
- Controlling the time when the tax must be paid
- Claiming any available tax credits
- Controlling the effects of the Alternative Minimum Tax
- Avoiding the most common tax planning mistakes
In order to plan effectively, you'll need to estimate your personal and business income for the next few years. This is necessary because many tax planning strategies will save tax dollars at one income level, but will create a larger tax bill at other income levels. You will want to avoid having the "right" tax plan made "wrong" by erroneous income projections. Once you know what your approximate income will be, you can take the next step: estimating your tax bracket
Tax slabs as per income tax act 2009
For Male Tax Payers
- Upto Rs. 1,60,000 - NIL
- From Rs. 1,60,001 to Rs. 3,00,000 - 10%
- From Rs. 3,00,001 to Rs. 5,00,000 - 20%
- Above Rs 5,00,001 - 30%
For Female Tax Payers
- Upto Rs. 1,90,000 - NIL
- From Rs. 1,90,001 to Rs. 3,00,000 - 10%
- From Rs. 3,00,001 to Rs. 5,00,000 -20%
- Above Rs 5,00,001 - 30%
For Senior citizens Tax Payers
- Upto Rs 2,40,000 - NIL
- From Rs 2,40,001 to Rs. 3,00,000 - 10%
- From Rs. 3,00,001 to Rs. 5,00,000 - 20%
- Above Rs 5,00,001 - 30%
Note: education cess of 3% will be applicable to all the tax payers and surcharge of 10% was applicable to all those tax payers whose income is above 10 lakh rupees but for calculation of Income tax for the assessment year 2010-11 the surcharge has been removed.
For details : Jain Investment - Money Intellect - Systematic Investment Plan
Thanks
Yamini Asoor
http://yummyzblog/blogspot.com