Mr. Ahmed, a 62 year old senior citizen is employed in a private company. His total
annual income is Rs.6,20,000. He has contributed Rs. 1,00,000 to the Public Provident
Fund and paid a premium of Rs. 80,000 for the year for health insurance and a donation
of Rs. 10,000 to CM's Relief Fund. What is tax payable ?
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Answer:
Step-by-step explanation:
. total yearly income = 6,20,000
2) total deduction = (according to 80C)
(a) public provident fund = 1,00,000
(b) insurance = 80,000
(Add it)
= 1,80,000
(c) section 80c permits a maximum deduction of Rs. 1,50,000
(3) Amit give to CM's relief fund (accordingly to 80G) = Rs 10,000
(4) taxable income = (1) - [(2)+(3)]
=6,20,000-[1,50,000+10,000]
= Re 4,60,000
Hence, income tax = (taxable income -3,00,000) x 5/100
= (4,60,000-3,00,000) x 5/100
=1,60,000 x 5/100
= Rs 8,000
Educational cess is levide on income tax = 8,000 x2/100
=160
Secondary And Higher Education cess = 8,000 x1/100
=80
total income tax = 8000 +160 +80
=Rs 8,240
Hence,
Mr Ahmed will pay rupees 8,240
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