SALARY, TAXATION AND DEDUCTIONS

Salary, Taxation and Deductions

Salary Discussion
Our package is declared to be 3.16 lacs.
This makes Rs. 26,333 per month.
We will get around Rs. 22,000 in hand after deductions and all.(liable to vary).

Taxation

Income Tax rates:
From April 1, 2010 new tax slabs apply, which are as follows:
No income tax is applicable on all income up to Rs. 1,60,000 per year.
From 1,60,001 to 5,00,000 : 10% of amount greater than Rs. 1,60,000
From 5,00,001 to 8,00,000 : 20% of amount greater than Rs. 5,00,000 + 34,000
Above 8,00,000 : 30% of amount greater than Rs. 8,00,000 + 94,000
Our Salary Taxation

We are getting a salary of 3.16 lacks.

Till 1.6 lacks.. there is no tax..

After that according Section 80C of INCOME TAX you may save 1,00,000 without paying tax... by showing some savings... for one lack..

its now 2.6 lacks.. so only 50,000 is renaming .. in that if u keep some Bills for HRA.. which for 60,000 there is no need to pay tax at all...

so be clever at taxation.. our financial year starts from this April to March end..

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Deductions
Section 80C Deductions
Section 80C of the Income Tax Act [1] allows certain investments and expenditure to be tax-exempt. The total limit under this section is Rs. 100,000 (Rupees One lac) which can be any combination of the below:

Contribution to Provident Fund or Public Provident Fund
Payment of life insurance premium
Investment in pension Plans
Investment in Equity Linked Savings schemes (ELSS) of mutual funds
Investment in specified government infrastructure bonds
Investment in National Savings Certificates (interest of past NSCs is reinvested every year and can be added to the Section 80 limit)
Payments towards principal repayment of housing loans.Also any registration fee or stamp duty paid.
Payments towards tuition fees for children to any school or college or university or similar institution. (Only for 2 children)or towards coaching fee of various competitive exams.
Post office investments The investment can be from any source and not necessarily from income chargeable to tax.

Deductions from your salary
A amount of Rs. 1,500 will be deducted from your salary .. and TCS will add 1000 for that and save its as Provident Fund.
So monthly TCS is saving Rs. 2500 for you.
you can get this money while you resign the job or at the time of retirement.

If you want increase the savings you can go for VPF- voluntary provident fund

interest for PF is 8%..

Save Income Tax in India

Income up to Rupees one lac and sixty thousand need not pay any tax under the Income Tax Act in India. Other whose income falls on the slabs are required to pay the percentage of Tax as specified.

1.Save Income Tax in India through House rent allowance:- If a portion of the Salary is paid as House Rent allowance and the person is staying in a rented house and paying rent, he could produce the rent receipt. In such cases the person is eligible for deduction from the source to the extent of rent paid for the year or the House rent paid whichever is less.

2. Savings through , Provident Fund, Life Insurance Schemes, Post Office savings

3. Save Income Tax in India through Home Loans:- A person who has availed loan for house construction is eligible for deduction of Rs.1,50,000 towards payment of interest on housing loans. The person is also eligible for a rebate of Rs.1,00000 on the principal. However the house should be self occupied.

4. Infrastructure Bonds : The amount investment made on infrastructure bond is eligible for exemption under Income Tax in India.

5. Interest paid on education Loan - A person can claim deduction on the interest paid on the loans taken for Higher education for self, spouse and children. There is no limit on the deduction, however the loan taken should be at Graduation level, Post Graduation level in Engineering, Medicine etc.,

6. Donations paid to Charitable Institutions- Donations paid to Charitable institutions are also entitled for saving Income Tax in India.

7. Transport Allowance : A person eligible for exemption Transport Allowance of Rs.9600/- per annual under Income Tax in India.

8. Medical Allowance- A person can claim up to Rs.15,000 annual rebate towards expenditure on medical for self or dependent's under the Income Tax in India.

and know about various savings schemes :

NATIONAL saving in post office where you will get approx 8% interest
Then
Voluntary provident fund in TCS with approx 8% interest.. you can save 80 of your basic pay in VPF...
Then
fixed deposits..