Gross

Basic
HRA
Prof Tax
TA
Oth. Allowance

65,000
40,000
12,000
200
800
12,000

Taxable Income
Home Loan
80C and D exe.

624,000
150,000
474,000

Income Slab
Up to Rs.2.5 lakhs

NIL

Rs.2.5 lakhs to
Rs.5 lakhs

10% of
(Rs.5,00,000Rs.2,50,000)

TDS

1,867

Income
Income
Income
Income

Income Tax Slab

upto Rs. 2,50,000
between Rs. 2,50,001 - Rs. 500,000
between Rs. 500,001 - Rs. 10,00,000
above Rs. 10,00,000

0
22400

Income Tax Rate

Nil
10% of Income exceeding Rs. 2,50,000
20% of Income exceeding Rs. 5,00,000
30% of Income exceeding Rs. 10,00,000

As per the steps outlined above, lets consider a numeric example for better understanding.

Steps (1) & (2)

Suppose your monthly gross income is Rs.80,000. This figure may contain divisions as ba

Steps (3) & (4)

Assuming that you stay at your own property, your monthly exemption from allowances equ

Step (5)

Lets say you just experienced a loss of Rs.1.5 lakhs on house loan interest repayments ov

Step (6)

Suppose you have invested Rs.1.2 lakhs in various categories that fall under Section 80C e

Step (7)
Finding out your tax slab

Your final tax breakup according to income slabs listed by the IT department i

TDS Deductions Tax Payable

Income Slab
Up to Rs.2.5NIL
NIL
Rs.2.5 lakhs10% of (Rs.5Rs.25,000
Rs.5 lakhs t 20% of (Rs.6Rs.26,600
Therefore, the final TDS to be deducted on your yearly income is Rs.25,000 + Rs.26,600, w

ple for better understanding.

may contain divisions as basic pay Rs.50,000, HRA of Rs.20,000, travel allowance of Rs.800, medical allowance of Rs.1,250,

mption from allowances equals Rs.2,250 (medical + travel + CEA). Therefore, your yearly taxable amount comes to (Rs.80,000

oan interest repayments over the year. Reducing this exempted amount from the taxable income, your taxable income become

hat fall under Section 80C exemptions, and made another Rs.30,000 investment in categories falling under Section 80D. So, th

d by the IT department is as follows:

is Rs.25,000 + Rs.26,600, which comes to Rs.51,600 for current years income, or Rs.4,300 per month for the current fiscal.

dical allowance of Rs.1,250, child education allowance (CEA) of Rs.200 and other allowances totalling 12,750.

mount comes to (Rs.80,000 Rs.2,250)*12, which comes to Rs.9,33,000.

our taxable income becomes Rs.7,83,000.

ng under Section 80D. So, the resulting Rs.1.5 lakhs is exempted from taxes according to Chapter VI-A. Deducting this amount

onth for the current fiscal.

VI-A. Deducting this amount from the gross taxable income calculated above, your taxable income becomes Rs.6,33,000.

becomes Rs.6,33,000.