income tax calculates

See, how to calculate Your Income Tax in seven simple steps:

Step i: Determine your Gross Income Gross Income = Monthly Income * 12

Step ii: Calculate your Donation/Charity amount (if any) Donations here mean the amount given to some organization(s) as charity, which should be in conformity with the Income Tax Rules.

Step iii: Calculate your Savings It includes all your savings and investments that are listed in the sections under Income Tax Rebates.

Step iv: Assess your Taxable Income axable Income = Gross Income – (Donations/Charity + Savings) OR Step I – (Step II + Step III)

Step v: Calculating the Income Tax Now that you have calculated your taxable income, you may refer to the Income Tax Slab for calculating the income tax.

Step vi: Add Surcharge Add a surcharge of 10% of your annual income to the Income Tax that you have calculated in the preceding step. This will be your new income tax figure. (Note: This step is not applicable in case the annual income falls behind Rs. 10 lakhs)

Step vii: Adding the Education Cess Make an addition of 3% of your taxable income (as the education cess) to the new income tax figure that you have calculated in Step VI above.