Employees on Payroll

Practical Income Tax
Income Tax for Salaried Employees

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?

Example 2

Suppose an Employee gets a Salary of 35000 per month.

What is Income Tax Payable by him?

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?

Example 3

Suppose an Employee gets a Salary of 75000 per month.

What is Income Tax Payable by him?

Example 3 Continued

What is monthly tax to be deducted in this case?

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 LESS STANDARD DEDUCTION NET ANNUAL SALARY TAX REBATE NET TAX CESS TAX+ CESS MONTHLY TDS NET SALARY

Q2

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

NEW SLAB RATES BUDGET 2018

Income Tax Slab Rate is as follows :-

## Example

#### Calculation of Tax on Income of Rs 340000

Note:- This will be applicable from Next year ITR (Financial Year 2018-19 Assessment Year 2019-20)

### 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