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 PM’s Relief Fund. Compute his income tax.

Answer 1

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

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

Mr. Kartarsingh’s investment = GPF + NSC = (3000 x 12) + 15,000 

= 36,000 + 15,000 

= Rs 51,000 Donation to PM’s relief fund 

= Rs 12, 000 

∴ Taxable income

= yearly income – (investment + donation) 

= 5,04,000 – (51,000 + 12,000) 

= 5,04,000 – 63,000 

= Rs 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) 

= (5/100) x 1,91,000 100 = Rs 9550 

Education cess = 2% of income tax 

= (2//100) x 9550 

= 191 

Secondary and Higher Education cess = 1% of income tax 

= (1/100) x 9550

= 95.50 

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

= 9550 + 191 + 95.50 

= Rs 9836.50 

∴ Mr. Kartarsingh’s income tax is Rs 9836.50