Mr. Kartarsingh (age 48 years) works in a private company. His monthly

1.	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» Mr. Kartarsingh’s monthly income = ₹ 42,000 Mr. Kartarsingh’s yearly income = 42,000 x 12 = ₹ 5,04,000 Mr. Kartarsingh’s investment = GPF + NSC = (3000 x 12)+ 15,000 = 36,000 + 15,000 = ₹ 51,000 Donation to PM’s relief fund = ₹ 12, 000 ∴ Taxable income = yearly income – (investment + donation) = 5,04,000 – (51,000 + 12,000) = 5,04,000 – 63,000 = ₹ 4,41,000 Mr. Kartarsingh income falls in the slab 2,50,001 to 5,00,000. ∴ Income tax = 5% of (Taxable income – 250000) = 5% of (4,41,000 – 2,50,000) = \(\frac{5}{100}\) x 1,91,000 100 = ₹ 9550 Education cess = 2% of income tax = \(\frac{2}{100}\) x 9550 = 191 Secondary and Higher Education cess = 1% of income tax = \(\frac{1}{100}\) x 9550 100 = 95.50 Total income tax = Income tax + Education cess + Secondary and higher education cess = 9550 + 191 + 95.50 = ₹ 9836.50 ∴ Mr. Kartarsingh’s income tax is ₹ 9836.50

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»

Mr. Kartarsingh’s monthly income = ₹ 42,000

Mr. Kartarsingh’s yearly income = 42,000 x 12 = ₹ 5,04,000

Mr. Kartarsingh’s investment

= GPF + NSC =

(3000 x 12)+ 15,000

= 36,000 + 15,000

= ₹ 51,000

Donation to PM’s relief fund = ₹ 12, 000

∴ Taxable income

= yearly income – (investment + donation)

= 5,04,000 – (51,000 + 12,000)

= 5,04,000 – 63,000 = ₹ 4,41,000

Mr. Kartarsingh income falls in the slab 2,50,001 to 5,00,000.

∴ Income tax = 5% of (Taxable income – 250000) = 5% of (4,41,000 – 2,50,000)

= \(\frac{5}{100}\) x 1,91,000 100

= ₹ 9550

Education cess = 2% of income tax

= \(\frac{2}{100}\) x 9550

= 191 Secondary and Higher Education cess = 1% of income tax

= \(\frac{1}{100}\) x 9550 100 = 95.50

Total income tax = Income tax + Education cess + Secondary and higher education cess

= 9550 + 191 + 95.50

= ₹ 9836.50

∴ Mr. Kartarsingh’s income tax is ₹ 9836.50