In financial year 2019-20, Mrs. Sumita's (age 62 years) annual income was Rs. 7,58,000
(exclusive of HRA). She deposited Rs. 7500 per month in GPF and Rs. 23400 per half-year in
LIC. She purchased NSC worth Rs.25000 and donated Rs.20000 in a charitable trust on which
50% deduction is allowed under section 80G. Calculate the income tax Mr. Sumita paid at
the end of the financial year.
Answers
Answer:
ANSWER
Total annual income = 12×Rs50000
= Rs600000
Amount on which tax would be rebated on investments/donations = 100% of Prime Minister's Relief Fund + 50% of Hospital Donation
=100% of Rs 60000+50% of Rs 20000
=Rs70000
Total Savings = Amount in G.P.F + Amount in L.I.C + Amount in N.S.C
=12×7000+15000+35000
=Rs134000
100% Rebate on savings up to Rs100000. That implies Rs34000 would be taxable
Therefore amount of salary after deduction of rebated amount = Total Salary − Rebate on investment/Donations − Rebate on Savings
=600000−70000−100000
=Rs430000
Income tax =0%×Rs200000 + 10%×(Rs430000−Rs200000)
=Rs23000
Education Cess =3% of Income Tax
=3% of RS 23000
=Rs690
TotalTax =Rs23000+Rs690
=Rs23690