Who are Employees on Payroll

 It means Employee has proper job in Company and he is officially employee of company

 Income Tax is applicable as per following Slab Rate

Income Tax Slab Rate Applicable

INCOME

TAX

UPTO 250000

0

250000-500000

5% of (Income-250000)

5000001-1000000

20% of (Income-500000)+12500

>1000000

30% of (Income-500000)+112500

 There is Rebate of   5000   2500 also if Income between 250000-350000

 

Example 1

Suppose an Employee gets a Salary of 15000 per month.

What is Income Tax Payable by him?

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Example 2

Suppose an Employee gets a Salary of 35000 per month.

What is Income Tax Payable by him?

View Answer

 

TDS Deduction by Employer  as per income Tax Slab Rate

In case, net tax is payable by employee,TDS is deducted on same by company as per Income Tax Slab Rate

 

Example 2 Continue

What is monthly TDS to be deducted in this case?

View Answer

 

Example 3

Suppose an Employee gets a Salary of 75000 per month.

What is Income Tax Payable by him?

View Answer

Example 3 Continued

What is monthly tax to be deducted in this case?

View Answer

 

Assignment

Q1

Complete the following table in Excel

Case 1 2 3 4 5 6
MONTHLY SALARY 10000 25000 40000 50000 100000 22000
ANNUAL SALARY            
TAX            
REBATE            
NET TAX            
CESS            
TAX+ CESS            
MONTHLY TDS            
NET SALARY            

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View Answer


Q2
 

How much Income Tax is payable by employee at the time of filing ITR in each of above cases

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NEW SLAB RATES BUDGET 2018

 

Income Tax Slab Rate is as follows :-

Old Slab rate.jpg


Slab Rate 1.jpg


Example

Calculation of Tax on Income of Rs 340000

Income Tax New Slab rate.jpg

 

Note:- This will be applicable from Next year ITR (Financial Year 2018-19 Assessment Year 2019-20)
  1. Practical Income Tax
  2. Income Tax for Salaried Employees
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Transcript

INCOME TAX UPTO 250000 0 250000-500000 5% of (Income-250000) 5000001-1000000 20% of (Income-500000)+12500 >1000000 30% of (Income-500000)+112500 There is Rebate of 5000 2500 also if Income between 250000-350000 Example 1 Suppose an Employee gets a Salary of 15000 per month. What is Income Tax Payable by him? Monthly Salary=15000 Annual Salary=180000 Since Salary is less than 250000,no income tax is payable Example 2 Suppose an Employee gets a Salary of 35000 per month. What is Income Tax Payable by him? Monthly Salary=35000 Annual Salary=35000*12=420000 Income Tax =5%*(420000-250000) =5%* 170000 =8500 Rebate=0 Net Tax=8500 Cess = 3%*8500 = 255 Tax + Cess = 8755

About the Author

CA Maninder Singh's photo - Expert in Practical Accounts, Taxation and Efiling
CA Maninder Singh
CA Maninder Singh is a Chartered Accountant for the past 8 years. He provides courses for Practical Accounts, Taxation and Efiling at teachoo.com .