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This is one topic which has always puzzled me to no end. No matter how hard I try to understand it, I always do not seem to grasp the concept.

I'm currently considering an offer and would like to know if it would be beneficial to me. The only thing I need to figure out right now is how much will I end up paying in taxes.

Hypothetically speaking, let's say my annual income is Rs.15 lacs per annum. The only thing I show under deductions/savings is Rs.50,000 towards PF. No HRA exemption, no medical insurance premium (paid by the employer), nothing else.

In this case, what would be the approx amount of tax to be paid? More specifically, I'm really interested in how that is being calculated.

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The tax brackets are as below;

  • Income up to Rs 2,50,000* No tax
  • Income from Rs 2,50,000 – Rs 5,00,000 5%
  • Income from Rs 5,00,000 – 10,00,000 20%
  • Income more than Rs 10,00,000 30%

Plus a cess of 4% of Tax.

Total 15 lacs. Less of 50k deduction. Taxable income 14.5 lacs.
First 2.5 lacs nil.
Next 2.5 lacs at 5% = 12,500.
Next 5 lacs at 20% = 1,00,000.
Next 4.5 lacs at 30% = 1,35,000.

Total = 12,500+1,00,000+1,35,000.
= 2,47,500 plus 4% cess
= 2,57,400 total tax

  • Yes, I'm aware of that. What I don't know is how it gets broken down to come to a figure/number. Taking 15 lacs as an example, could you demonstrate that? – asprin Oct 14 '18 at 15:26
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Few thing which is missing here to save tax like:

1) Since you are getting salary, you can claim for House Rent Allowance and save some tax. You can calculate total HRA using this tool.

2) You can save additional about 50k by buying Mediclaim.

3) You can also save by investing in National Pension Scheme (NPS) however, you can withdraw only 60% of the amount (tax free) and rest will be there in account for Pension purpose.

  • Thanks for the answer. I'm aware of the tax saving options. What I wanted to know was the aggregate tax that would be applicable if I don't opt for any tax saving options – asprin Jan 3 at 4:44

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