5 Replies to “if my income is 250000, how should i compute tax, or how much should i invest to so that tax become zero?”

  1. Rs 100000 out of your income ia tax free. Rs 100000 you will have to invest to get income tax relief. On rs 50000 you will have to pay tax.

  2. Computation of Total Income and Tax Thereon

    Your Total Income Rs.250000

    You can invest upto Rs.100000 to get
    the benefit of sec.80C (if invested) Rs.100000

    Taxable income Rs.150000

    Tax upto Rs.100000 NIL
    Next Rs.50000 Rs. 5000

    Total Tax Rs. 5000

    Add: Education cess @2% Rs. 100

    Total Tax Liability Rs. 5100

    Note: If you have taken any housing loan then the Interest on that borrowed capital would be treated as loss from house property and your income will come down to the extent of interst amount (maximum Rs.150000) and therefore your tax may be reduced.

  3. Clarify the following
    1. Residential status
    2. Gender
    3. Your age
    4. Source of Income

    Followings are the rules

    For individuals resident woman (not being a senior citizen)

    Net income range income tax rate
    Upto 135000 nil
    135000 to 150000 10% of (TI-135000) + 2% education cess
    150000 to 250000 1500+20% of (TI-150000) +2% education cess
    250000 to 1000000 21500+30% of (TI- 250000) +2% education
    above 1000000 246500+30%of (TI-1000000) +10% of income tax Surcharge + 2% of income tax and surcharge

    In your case it will be
    1500+20% of (250000-150000)+2% EC
    For resident senior citizen (who is of 65 years or more at anytime during the previous year)
    upto 185000 nil
    185001 to 250000 20% of (TI-185000)+2% edu cess
    250001 to 1000000 13000+30% of (TI- 250000)+2% edu cess
    above 1000000 238000+30% of (TI- 1000000)+10% sc
    +2% edu cess

    In your case it will be
    20% of (250000-185000)+2% EC
    For any other individual, every HUF/AOP/BOI/Artificial juridical person

    upto 100000 nil
    100000 to 150000 10%of (TI- 100000)+2% ec
    150001 to 250000 5000+20% of (TI-150000)+2% ec
    250001 to 1000000 25000+30% of(TI- 250000)+2%ec
    above 1000000 250000+30% of (TI-1000000)+10% sc+2%ec

    In your case it will be
    5000+20% of(250000-150000)+2%EC

    You can claim a deduction of upto 100000 if you invest in the specified institutes notified under section 80C

    Invest in any of the 18 places given by the IT dept u/s 80C.
    The maximum deduction will be upto 1 lac.

    1.LIC insurance premium (including payment made by govt employees to the central govt employees’ insurance scheme and payment made by a person under children ‘s defered endowment assurance policy){subject to a maximum of 20% of sum assured}
    2.Amount deposited as term deposit for a period of5 years or more accordance with a scheme framed by the govt (applicable from Assessment year 2007-2008)
    3.Payment in respect of non-commutableDeffered annuity plan
    4.Any amount paid as tuition fee (not including any payment towards development fees/donation/payment of similar nature) whether at the time of admission or otherwise to any university/college/educational institutions in india for full time education
    5.Salary deducted by employer (incase of Govt employee)
    6.contribution to Statutory provident fund and RPF.
    7.contribution towards 15yrs PPF
    8.contribution towards approved superannuation fund.
    9.Subscription to National Savings Certificate VIII issue.
    10.contribution for participating in the ULIP of UTI
    11.contribution for participating in the ULIP of LIC mutual fund
    12.Payment for notified annuity plan of LIC or any other insurer.
    13.Subscription towards notified units of Mutual Fund or UTI
    14.contribution to notified pension fund set up by Mutual fund or UTI (i.e retirement benefit pension fund of UTI)
    15.Any sum paid including accrued interest as subscription to home loan account scheme of the National Housing Bank or contribution to any notified pension fund set uo by the national housing Bank.
    16.Any sum paid as subscription to any scheme of
    a> public sector company engaged in providing long term finance for purchase/construction of residential house in India.
    b> housing board constituted in India for the purpose of planning, development or improvement of cities/towns.
    17.Any amount towards the cost of purchase/construction of aresidential property (including repayment of loan taken from Govt. bank, cooperative bank,LIC,National Housing Bank,assessee’s employer where such an employer is a public company/public sector company/university/co-operativ… society)
    18.amount invested in approved debentures of, and equity shares in, a public company engaged in infrastructure including power sector or units of amutual fund proceeds of which are utilised for the developing, maaintaining,etc of a new infrastructure facility.

    Maximum deduction is 100000
    While calculating tax amount upto the maximum of 1lac shall be deducted from Gross total Income.
    If you invest in those then your Net income will be 150000

    Then tax will be for resident woman not being a senior citizen will be
    Upto 135000 nil
    for next 15000 it will be 10% of (150000-135000)+2% EC
    For resident senior citizen
    Tax is nil

    For other individuals
    upto 100000 tax is nil
    for 50000 tax will be 10% of (total income-100000)+2%EC
    =10% of (150000-100000)+2% EC

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