What is the tax on 12 lakhs?
| Income Tax Slab | Tax Rate |
|---|---|
| From Rs.10,00,001 to Rs.12,50,000 | 20% of the total income that is more than Rs.10 lakh + 4% cess |
| From Rs.12,50,001 to Rs.15,00,000 | 25% of the total income that is more than Rs.12.5 lakh + 4% cess |
Under the old regime, with deductions, these individuals pay 20% income tax. Similarly, people earning Rs 10 lakh to Rs 12.5 lakh pay 20 per cent, and those earning Rs 12.5 lakh to Rs 15 lakh pay 25% — against 30 per cent earlier.
| Income Tax Slab (in Rupees) | Tax Rate |
|---|---|
| ₹7.5 lakh to ₹10 lakh | 15% |
| ₹10 lakh to ₹12.5 lakh | 20% |
| ₹12.5 lakh to ₹15 lakh | 25% |
| ₹15 lakh and above | 30% |
| Annual Income of Rs.12,50,000 (with exemption) | |
|---|---|
| Annual Income | 1250000 |
| Exemptions u/s 80C | -150000 |
| u/s 80CCD(1B) | -50000 |
| u/s 80D | -75000 |
As per this structure your tax will be Rs. 289 Annually.
LPA stands for lakhs per annum that is how many lakhs you will be given every year. If it is 1.2 LPA that means 1,20,000 is your annual salary which when divided by number of months gives your monthly salary. 1,20,000 =10,000. 12. that is you will have a monthly salary of 10,000.
Total tax should be around 96,000 including cess. or 8000 Rs. per month.
...
Tax paid:
- 0–2.5 L - Rs 0.
- 2.5–5 L - Rs 12,500.
- 5–10 L at 20%- Rs 100,000.
- Professional Tax: Rs 2400/ year.
| Income Slab | Applicable Tax Rate |
|---|---|
| Above Rs 7.5 lakh and up to Rs 10 lakh | 15% |
| Above Rs 10 lakh and up to Rs 12.5 lakh | 20% |
| Above Rs 12.5 lakh and up to Rs 15 lakh | 25% |
| Above Rs 15 lakh | 30% |
If your income is below ₹2.5 lakh, you do not have to file Income Tax Returns (ITR).
How can I reduce my income tax?
The most straightforward way to calculate effective tax rate is to divide the income tax expense by the earnings (or income earned) before taxes. Tax expense is usually the last line item before the bottom line—net income—on an income statement.
| Income Tax Slab | ||
|---|---|---|
| New | Income | Old |
| 15% | Rs. 7.5 lakhs to Rs. 10 lakhs | 20% |
| 20% | Rs. 10 lakhs to Rs. 12.5 lakhs | 30% |
| 25% | Rs. 12.5 lakhs to Rs. 15 lakhs | 30% |
The tax-saving investments under Section 80C can further reduce taxable income by up to Rs 1.50 lakh. Another Rs 50,000 can be saved by investments in the National Pension Scheme under Section 80CCD(1b). These two deductions will bring the taxable income down to Rs 7.7 lakh per annum.
| Income Tax Slab | Tax Rate |
|---|---|
| From Rs.10,00,001 to Rs.12,50,000 | 20% of the total income that is more than Rs.10 lakh + 4% cess |
| From Rs.12,50,001 to Rs.15,00,000 | 25% of the total income that is more than Rs.12.5 lakh + 4% cess |
- Unit Linked Insurance Plans (ULIPs)
- Pension or Annuity Plans from Life Insurance Companies.
- Public Provident Fund (PPF) & Employee Provident Fund (EPF)
- New Pension Scheme Tier-I Account.
- Senior Citizen Savings Scheme.
14 lpa is a great salary to have in india, irrespective of the age you are of. One needs to understand that the main usage of salary is to fulfill for your expenses. Now if you live a normal life (not a very lavish one) earning 95k/ month should be good enough and you can easily meet all of your expenses.
I would prefer 15LPA in India if it's long time plan. On an average, you will save 8-9 L every year, that too after living a life like a king. On the other hand, you have to live like a miser in US with no royalty of life and still you wont be able to save more than 8-9 L. This is how a calculated life will be.
| Band | CTC (Yearly) | In Hand Salary |
|---|---|---|
| A | 20 lakh | 1,15,000 per month |
| B | 15 lakh | 95,000 per month |
| C | 12 lakh | 82,000 per month |
| C | 10 lakh | 63,000 per month |
Your CTC being 12 lakhs and your basic (in hand) being 7.2 Lakhs (60×12) means there's many benefits involved.
How do I save tax in India?
- Public Provident Fund (PPF)
- Sukanya Samriddhi Yojana (SSY)
- National Pension System (NPS)
- Employees' Provident Fund (EPF)
- Sukanya Samriddhi Yojana Interest Rate.
- National Savings Certificate.
- House Rent Allowance.
- NSC Interest Rate.
| Income Slab | Applicable Tax Rate |
|---|---|
| Above Rs 7.5 lakh and up to Rs 10 lakh | 15% |
| Above Rs 10 lakh and up to Rs 12.5 lakh | 20% |
| Above Rs 12.5 lakh and up to Rs 15 lakh | 25% |
| Above Rs 15 lakh | 30% |
For a salary ranging between Rs 20 lakhs and Rs 25 lakhs, the applicable tax rate under the new tax regime would be the highest, that is 30%. Incidentally, this is the same tax slab that your salary would fall under according to the existing tax regime, that is 30%.
| Income Tax Slab | Tax Rate |
|---|---|
| From Rs.10,00,001 to Rs.12,50,000 | 20% of the total income that is more than Rs.10 lakh + 4% cess |
| From Rs.12,50,001 to Rs.15,00,000 | 25% of the total income that is more than Rs.12.5 lakh + 4% cess |
| Annual Income (Taxable) | Applicable Surcharge Rates |
|---|---|
| Between Rs. 50 Lakh and Rs. 1 Crore | 10% |
| From Rs. 1 Crore to 2 Crore | 15% |
| From Rs. 2 Crore to 5 Crore | 25% |
| Rs. 5 Crore and above | 37% |
