Tips and tricks

How is taxable amount calculated from CTC?

by Author

How is taxable amount calculated from CTC?

What are the steps to determine slab of your taxable income in India?

  1. Calculate your gross salary by adding Dearness Allowance, House Rent Allowance, Transport Allowance, Special Allowance to your basic pay.
  2. Then deduct the exemptions of HRA, professional tax and standard deduction from the gross salary.

Which part of CTC is taxable?

Basic Pay: This is the primary component of your CTC, also called ‘Basic Salary’. It makes up a major part of your CTC. The basic pay is fully taxable in the tax slab in which your income falls. The higher the basic pay, the higher your tax liability.

Is CTC considered for income tax?

Your CTC Is Not Your Taxable Income.

READ ALSO:   Is the Sun UK a legit newspaper?

How do I become tax exempt?

Tax exemptions can be availed by investing in the following tools:

  1. Senior Citizen Savings Scheme (SCSS)
  2. Sukanya Samriddhi Yojana (SSY)
  3. National Pension Scheme (NPS)
  4. Public Provident Fund (PPF)
  5. National Pension Scheme (NPS)

How much tax do you save on Section 80C and 80D?

Our takeaway – A salaried individual with a gross salary of Rs. 7.75 lakh, who claims the full benefit of Section 80C, 80D, and 80CCD (1B), will not have to pay any tax. In fact, they will save Rs. 15,080.

How to save tax on your PPF contributions?

You can do this by investing the entire sum into your PPF, or dividing it between your PPF, EPF, tax-saving mutual funds, and tuition fees paid for your children’s education. Thus, your gross income gets reduced to Rs. 6.5 lakh. The standard deduction that you can claim against your income has been increased from Rs. 40,000 to Rs. 50,000.

READ ALSO:   How many books did Sambhaji Maharaj written?

What is the difference between CTC and CTS in salary?

There are companies like IBM where the variable part of the CTC is around 15\%, but the payout rate is small. It means that you may not get the majority of the variable component of the salary. At the same time, companies like CTS have fixed variable e.g 30K for an associate-level resource.

How can I calculate the total income from 7lacs PF?

For sake of calculation lets assume your PF is 2100 Per month and gratuity around 800 Per month. Also assuming entire 7lacs is fixed salary without any variable component. Gross Income = 7,00,000 – 60,000 = 6,40,000. Now let’s assume you have investments and other tax rebates ( HRA, Professional tax, Standard deduction) = 1,50,