Calculation of income for tax purposes

This query is : Resolved

ntc pioneer (Querist)
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03 February 2024
Mr A is an individual below 60
He has opted for the old regime
He is a non govt employee (presently working with employer 2)

income/amount received details for FY 23-24

salary from employer 1 (govt)-4 lakhs
gratuity from employer 1-50000
el encashment from employer 1-50000

salary from employer 2 (non govt)-7 lakhs
Reimbursement of hospitalization expenses received from employer 2- 25 lakhs

Deductions available

Standard Deduction 50000
80 C 1.5 Lakhs
Joint home loan-total yearly interest for FY 23-24 is 3 lacs
Home ownership Share - 60% Mr A and the remaining share pertains to his spouse
Joint Loan Share -40% Mr A and the remaining share pertains to his spouse

Based on the above mentioned details what is the Taxable income of Mr A for the FY 23-24 ?

Asha Kanta Sharma

Asha Kanta Sharma

(Expert)
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12 July 2024 To calculate the taxable income of Mr. A for the financial year 2023-24 (FY 23-24), we need to compute his total income from various sources and then deduct the eligible deductions under the old tax regime.

Here's the breakdown of Mr. A's income and deductions:

### Income Details:
1. **From Employer 1 (Government):**
- Salary: Rs. 4,00,000
- Gratuity: Rs. 50,000
- EL Encashment: Rs. 50,000

Total income from Employer 1: Rs. 5,00,000

2. **From Employer 2 (Non-Government):**
- Salary: Rs. 7,00,000
- Reimbursement of hospitalization expenses: Rs. 25,00,000

Total income from Employer 2: Rs. 32,00,000

### Deductions Available:
- Standard Deduction: Rs. 50,000
- 80C Deductions: Rs. 1,50,000 (assuming this is fully utilized)
- Home Loan Interest: Mr. A's share is 40% of Rs. 3,00,000 = Rs. 1,20,000 (assuming the interest is the only deduction under this head)

### Calculation of Taxable Income:
1. **Total Income:**
- Income from Employer 1: Rs. 5,00,000
- Income from Employer 2: Rs. 32,00,000
- Total Gross Income: Rs. 37,00,000

2. **Less Deductions:**
- Standard Deduction: Rs. 50,000
- 80C Deduction: Rs. 1,50,000
- Home Loan Interest (40% of Rs. 3,00,000): Rs. 1,20,000

Total Deductions: Rs. 3,20,000

3. **Taxable Income:**
- Gross Income: Rs. 37,00,000
- Less: Deductions: Rs. 3,20,000

**Taxable Income:** Rs. 33,80,000

### Tax Calculation:
Since Mr. A has opted for the old tax regime, the tax liability will be calculated based on the slab rates applicable for FY 23-24 under the old regime. The exact tax liability can be calculated using these slab rates:

- Up to Rs. 2,50,000: Nil
- Rs. 2,50,001 to Rs. 5,00,000: 5% of (Taxable Income - Rs. 2,50,000)
- Rs. 5,00,001 to Rs. 10,00,000: Rs. 12,500 + 10% of (Taxable Income - Rs. 5,00,000)
- Rs. 10,00,001 to Rs. 15,00,000: Rs. 62,500 + 15% of (Taxable Income - Rs. 10,00,000)
- Above Rs. 15,00,000: Rs. 1,12,500 + 25% of (Taxable Income - Rs. 15,00,000)

Consulting with a tax advisor or using a tax calculator specific to the FY 23-24 slab rates will give you the exact tax liability based on the taxable income calculated above.