How to compute your total taxable income
In order to file your income tax
return (ITR), you first need to collect all the information required to file
it. The next necessary step is to figure your total taxable financial gain. After
this, final tax due or refundable is calculated by applying the applicable tax
rates effective so deducting taxes already paid by method of TDS/TCS or Advance
tax from the tax due amount arrived at.
Here's a step by step orientate the way to calculate one's total
taxable income:
As per the taxation laws, a
person can have a total of 5 sources of income which are: Income from salary,
Income from House Property, Income from Business or Profession, financial gain
from Capital Gains, Income from Other sources. All income of a tax-assessee has
to be categorized as one of the above.
Income from Salary
You can work out financial gain
from your wage victimisation the TDS certificate in kind sixteen issued by your
leader.
This is to be done as follows:
1. Collect
your salary slips and Form 16 for the financial year.
-currently add all of your emoluments like (Basic
wage, DA, TA, DA on TA, HRA, all other allowances, and reimbursements) which
will be mentioned in your salary slips and
Form 16 (Part B).
2. Add
the Bonus (TVP- Ex gratia) received in the FY for which income is being
computed.
3. The
total will be termed as your gross salary.
4. Deduct
the following from your gross salary :
5. Exempted
portion of HRA, - Transport Allowance (maximum exemption can be upto Rs19200
per annum) - All reimbursements subject to the furnishing of actual bills i.r.o
expenditure incurred (Medical reimbursement can be maximum upto Rs 15000)
6. The
result will be your net income from salary.
Note: From FY 18-19, deduction in
respect of transport allowance of Rs19,200 per annum and medical reimbursement
of Rs 15,000 per year have been withdrawn.
Further, a typical deduction of
Rs 40,000 a year will be allowed from your gross salary.
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