FinCalC: How To Calculate INCOME TAX for FY 2018-19 with EXAMPLES | AY 2019-20 [VIDEO]

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In the previous post we have seen what you should know before Calculating your Income Tax and the Changes made in Budget 2018. There were 3 important changes made in Budget 2018:

1. Introduction of Standard Deduction of Rs. 40,000
2. Increase in Education Cess to 4%
3. Increase in Section 80TTA Limit to Rs. 50,000 for Senior Citizens

In this post, we are going to see How we can Calculate our INCOME TAX based on the changes made in Budget 2018. Watch this video which contains some EXAMPLES:

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So, based on the changes made in Budget 2018, following is the way you can Calculate your Income Tax for FY 2018-19, AY 2019-20:

Example:

INCOME

Income from Salary = Rs. 5,00,000

Income from Other Sources = Rs. 15,000

Gross Total Income = Rs. 5,15,000

INVESTMENTS

Section 80C = Rs. 1,50,000

Section 80D = Rs. 15,000

Section 80TTA = Rs. 9,000

Total Investments = Rs. 1,74,000

TAXABLE INCOME

Gross Taxable Income = Gross Total Income - Total Investments

Gross Taxable Income = Rs. 5,15,000 - Rs. 1,74,000 = Rs. 3,41,000

Apply STANDARD DEDUCTION

Gross Taxable Income = Gross Taxable Income - Standard Deduction

Gross Taxable Income = Rs. 3,41,000 - Rs. 40,000 = Rs. 3,01,000

INCOME TAX CALCULATION

5% Slab Rate

Calculated Income Tax = 5% of Rs. 3,01,000 - Rs. 2,50,000 = Rs. 2,550 (5% of Rs. 51,000)

Apply TAX REBATE

Since "Gross Taxable Income" is less than Rs. 3,50,000, a Tax Rebate of maximum Rs. 2,500 is applicable:

Calculated Income Tax = Calculated Income Tax - Tax Rebate

Calculated Income Tax = Rs. 2,550 - Rs. 2,500 = Rs. 50

Note: Tax Rebate is applicable only when Gross Taxable Income is less than or equal to Rs. 3,50,000 for FY 2018-19

Calculate Education Cess

4% of Income Tax = 4% of Rs. 50 = Rs. 2

TOTAL INCOME TAX

Total Income Tax = Calculated Income Tax + Education Cess

Total Income Tax = Rs. 50 + Rs. 2 = Rs. 52

So, in the above Example, a "Total Income Tax" of Rs. 52 is to be paid based on the Income and Investments of a person.

This is how we can Calculate Income Tax based on the changes made in Budget 2018.

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