CTC is 4 Lakh, 1Lak free , 40 k in ppf , rest 2 lak in Mutual Funds then what ratios i have to pay the tax .?



CTC is 4 Lakh, 1Lak free , 40 k in ppf , rest 2 lak in Mutual Funds then what ratios i have to pay the tax . For this current year & next 3 years . Other investment are in NSC 20 k & LIC 20 k … Pl. let me know the ration on MF & How to save tax …

2 Replies to “CTC is 4 Lakh, 1Lak free , 40 k in ppf , rest 2 lak in Mutual Funds then what ratios i have to pay the tax .?”

  1. Tax payable is not calculated on the cost to the company but on the gross payments made to you by the company. CTC includes contribution made to your PF account by the employer but this is not taxed in your hands. Similar is the case of superannuation contributions to funds like Pension Funds or Gratuity Fund.

    Pay, Dearness allowance, House Rent Allowance, Conveyance allowance and certain similar allowances constitute your gross pay and are taxed. HRA is exempt if you live in a rented house and can produce a valid acceptable receipt for the rent paid. Conveyance allowance is exempt to the extent of Rs. 800 a month. Once you calculate your gross pay for the whole year, then, Rs. 1 lakh maximum can be deducted from this gross figure if you save this sum in instruments like PF, PPF, NSCs, Bank FDs (for periods of more than 5 years) and certain other avenues. Gross income Less HRA (conditions exist) less conveyance allowance (conditions exist) less Rs. 1 lakh (if you have saved this sum as stated) will form your taxable income. On this taxable income the slabs are:

    First one lakh …..Nil tax.
    Next Rs. 50000 … 10% tax
    Next Rs.100000…. 20% tax
    On balance ……… 30% tax.

    Education cess at 2% on the tax amount is leviable in addition.

    Medical reimbursement subject to a maximum of Rs. 15000 per annum can be exempt subject to actual expenditure and proof.

    Please calculate your tax now yourself and get it verified by the Finance Department of your Company.


  2. your salary is not fully taxable taxable in income tax laws. there are some deductions and exemptions while calculating the income from salaries for tax purposes.
    The approach to calculate the salary form the point of view of the co is totally different from the point of Tax Dept.
    Also tax savings in 80C is exempt upto a maximum of Rs. 100,000 in a particular Financial Year.
    For more tax planning get in touch with me at ag[email protected]
    9868977212





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