How we can calculate our Income Tax.
                     How we can calculate our 
Income Tax
What is Income Tax?
• An Income Tax is a duty forced on people or elements that fluctuates with individual pay or benefits. 
• Annual expense by and large is registered as the result of a duty rate times assessable pay. Income Tax rates 
may shift by type or attributes of the citizen. The duty rate may increment as assessable salary increments. 
Salary People
• Salaried people, having no business salary, should pick between the current and new duty 
systems each fiscal year, according to their benefit. 
Business People
• Then again, the individuals who have business pay ought to deliberately assess whether they 
need to proceed with the current expense system or select the new duty system. 
• This is on the grounds that once they pick the new duty system, at that point they can switch 
back to the current expense system just once in a blue moon.
Step 3 (Understanding the Basic Slab)
SL. No. Income Slabs Tax Rate (In %)
1 Up to 2.5 lakh Nil
2 Between 2,50,001 and 5 lakh 5
3 Between 5,00,001 and 7.5 lakh 10
4 Between 7,50,001 and 10 lakh 15
5 Between 10,00,001 and 12.5 lakh 20
6 Between 12,50,001 and 15 lakh 25
7 Above 15 lakh 30
Step 1
• The estimation of personal assessment that you are at risk to pay under the new duty system can 
be clarified with a model. Assume your complete salary in FY 2020-21 is Rs 16 lakh. Further, 
during the year, your manager has contributed Rs 60,000 to your NPS account, which is qualified 
for finding under area 80CCD. In this manner, your net taxable income will be Rs 15, 40,000 (Rs 
16 lakh short Rs 60,000). 
Step 2
• The personal assessment obligation in the new duty system will be determined on Rs 15.40 lakh. 
There will be no duty on the primary Rs 2.5 lakh from Rs 15.40 lakh. The pay which is as yet 
chargeable to burden currently left will be Rs 12.90 lakh (Rs 15.40 lakh less Rs 2.5 lakh) 
Step 3
• The following Rs 2.5 lakh (Rs 5 lakh less the absolved Rs 2.5 lakh) from Rs 12.90 lakh will be 
charged at 5 percent as referenced in point 2 in the table above. The expense sum here will be 
Rs 12,500. 
Step 4
• The salary left chargeable to duty will be Rs 10,40,000. Out of this, the following Rs 2.5 lakh (Rs 
7.5 lakh short Rs 5 lakh) will be charged at 10 percent as referenced in point 3. The assessment 
sum comes out to be Rs 25,000. 
Step 5
• Including the assessment risk from focuses 1,2 and3, now, the all out duty obligation comes to Rs 
37,500 (0+12,500 + 25,000). 
• Now, the salary which is as yet chargeable to tax is Rs 7,90,000. From point 4, Rs 2.5 lakh (Rs 10 
lakh less Rs 7.5 lakh) will be taxed.
Thank 
You