2 Replies to “Respected honourable gentry could you provide the format of computation of income of an employee?”

  1. Input Amounts
    Gross Salary including Perquisites
    (Annual Salary including Perquisites)

    Allowances Exempt u/s 10 / Deductions
    (HRA, Conveyance, Medical, LTA, P.Tax, etc.)

    Interest on Housing
    (Housing Loan Interest upto Rs.150,000)

    Income from Other Sources
    (Profits, Dividends, Interest, etc.)

    Investments 80C+80CCC+80CCD
    (PF,LIP,PPF,NSC,Hsg Principal,Infra.Bonds,etc.)

    Other Deductions
    (Mediclaim, Int.on Higher Edu.Loans, etc.)

    Taxable Income
    Income Tax

  2. Gross salary
    – Exemptions
    Net salary
    + income from interest etc.
    Gross total income
    – Deductions
    Taxable income
    Calculate tax
    Normally all this is done by employer.

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