I often get request to calculate income tax for readers and how they can save more tax! It’s not possible for me to calculate it for everyone. So going forward I would pick cases and show how to calculate income tax and if there is scope to save additional tax.
Below is the comment I received:
Dear Amit,
Pl calculate my income tax.
I would retire on 31 Jul 2019. My income from Apr 19 to Jul 19 is Rs. 2,50,000. Thereafter I would get pension @ Rs. 18,700 per month. As on 31 Mar 20 estimate interest on my FDs is Rs. 2,00,000. I have invested Rs. 2,00,000 in senior citizen scheme. Pl confirm how much income tax I have to Pay?
Download: Tax Planning Guide for FY 2019-20
Income Tax Calculation:
As far as possible I would use the format used in filing income tax returns so that its more helpful for everyone.
We first calculate the total income for the financial year (FY 2019-20)
- Income from Salary (April to July 2019) – Rs 4,00,000
- Income from Pension (August’19 to March’20) – Rs 1,49,600 (Rs 18,700 * 8)
- Income from Interest on Fixed Deposit – Rs 2,00,000
Total Income = Rs 7,49,600
The table below calculates the income tax:
| Header | Amount (RS.) | Remarks (FY 2019-20) |
| Income from Salary | 5,49,600 | Pension Income is considered as Salary Income |
| Income from Other Sources | 2,00,000 | Interest income is considered as income from other sources |
| Total Income | 7,49,600 | |
| Tax Saving/Exemption Sections | ||
| Standard Deduction | 50,000 | Applicable for Pension/Salary Income |
| Sec 80TTB (FD Interest Exemption) | 50,000 | Introduced in Budget 2018 for Senior Citizens |
| Senior Citizen Saving Scheme | 1,50,000 | Even if you invest Rs 2 Lakhs in SCSS the tax deduction would be limited to Rs 1.5 Lakhs only u/s 80C |
| Total Deduction | 2,50,000 | |
| Taxable Income | 4,99,600 | Total Income – Total Deduction |
| Tax Exemption Limit for Senior Citizens | 3,00,000 | |
| Net Taxable Income | 1,99,600 | Taxable Income – Exemption Limit |
| Tax @ 5% | 9,980 | The tax slab comes at 5% |
| Tax Rebate up to Rs 12,500 u/s 87A | -9,980 | The Taxable income is less than Rs 5 lakhs and hence eligible for Tax Refund u/s 87A |
| Net Income Tax | 0 | Tax – Tax Rebate |
| Health & Education Cess @ 4% | 0 | Cess increased to 4% in Budget 2018 |
| Total Income Tax Payable (including cess) | 0 | No Tax is Payable |
The total tax comes out to be NIL because of the increase in tax rebate u/s 87A and increase in Standard Deduction on Pension Income in Budget 2019. Additionally Section 80TTB (exemption up to Rs 50,000 on interest income) introduced in Budget 2018 helps further.
Also Read: 5 Key changes in Income Tax Rules from April 1, 2019 that you must Know
Recommendation to Save Tax if Income Increases:
Disclaimer: The recommendation is made based on limited information we have!
As he pays NO tax there is nothing much to worry. He could use following tax benefits in case the income increases:
- Sec 80GG in case you live on rent and do not own a house (deduction up to Rs 60,000)
- Section 80D for Health Insurance Premium
He is also eligible to submit Form 15H against his fixed deposits to prevent any TDS (Learn: How & when to Fill Form 15H?).
Also for senior citizens SCSS is one of the best investments for regular income. So he choose the right investment for tax saving.
Also Read: Best Tax Saving Investments u/s 80C
Let me know if this was helpful and you have any other suggestions!
For a super senior without health insurance coverage, can he avail Rs.30,000/- deduction U/s 80D towards annual Medical expenses besides standard deduction of 40,000 ?
Regarding the arrears paid for past years, and for claim relief U/s 89(i) this year, why should the government insist the seniors/ super senior pensioners to file the data and compute the Form 10E? Since it is a cumbersome process of searching for respective data in bank passbook, the pension disbursing banks can do it appropriately and apply TDS. For a salaried employee in service, the process is done by the Finance department but for pensioners, it is not easy. We have to wait for the disbursing bank to send us the year-wise breakup of arrears paid totally for 32 months.
If the Fin Min is considering to increase the 7th CPC factor from 2.57 to 3.68, then pensioners will get a lumpsum arrears this year for corresponding previous years. If so how to go about Form 10E calculation for the last 3 years?
Dear Amit,
I am NRI having both NRE and NRO accounts. I did not file IT return, although I would have got TDS reimbursements on my NRO account saving bank interest and FD interest, if I have filed
I received a compliant notice which had the following
1. Queries on my NRE account where FDs matured and I started a new FD after encashing. Why a query on NRE account is raised?
2. On my NRO account also, I did not renew a matured FD- Encashed it and opened a new FD. There are queries regarding the same – why
I replied through Compliance Portal and have not received any acknowledgment or reply – Can I assume that it is closed?
Please advise
Thanks,
Rajasekaran
Its always good practice to file your returns. So do so from this year. Why you got notice is because income tax department is actively sending notices to people who they think should have file their returns but have not done so.
My DOB is 10-05-1938, Can i be considered as super senior citizen for the FY 2018-2019 ( AY 2019-2020 )
Thanks
Yes.
Dear sir, Iam senior citizen I have made a fixed deposit in bank December 2018 the amount is 991000, yearly interest is 71000 and I have made a Pradhan mantri vaya Vandana scheme in Lic the amount is 1000000, the yearly pension earned in same scheme is 83000 Kindly calculate my tax. And also my interest and pension amount how much TDs ????
Dear sir,
I shall retire on 28/02/2019.my birth date is 09/02/1959.thus I want to know that what would be income tax calculation factor for me either general or senior citizen.please send me details.
Thanking.
Your,s faithfully
Jayprakash
Sir,
will I get relief from local travel expenses. if yes what is section?
Pl calculate my income tax.
I would retire on 31 December 2018. My income from Apr 18 to December 18 is Rs. 7,50,000. Thereafter I would get pension @ Rs. 15,000 per month. As on 31 Mar 19 estimate interest on my FDs is Rs. 1,20,000. I have invested Rs. 15,00,000 in senior citizen scheme. Pl confirm how much income tax I have to Pay?
Sir,
I retired on 31st Dec 2017.I am getting income from mutual funds and deposits .How should I calculate income tax ?
Amit,I am an old 76 yrs and 100%handicapped,a pensioner of central govt.–pl.calculate my tax if applicable–I was getting basic rs8044/pm on 31.12.2015 but on 1.1.2016 it was basic rs21926[commutated[ rs 1600] and now basic rs 20370/pm .i have ni TD in bank/p.o etc .pl. calculate
my tax how much payable[as three years arrear of pay increase will calculate in this month]
My mother is a retired School Teacher. My father was also a School Teacher. He died on 24 Feb 2017. My mother get Rs. 275733 as a pension and also get Rs. 169198 as a Family pension in 2017-18 F.Y. She has a SCSS of Rs. 1200000. Her SCSS interest is 111600 in 2017-18 F.Y. She gets Rs. 305070 as a Fixed deposit interest in 2017-18 F.Y. Kindly calculate her Income tax in A.Y 208-19. Thanking you. sumit Das. ([email protected])
I am retired on 30th April 2017 . My total income consist of salary of April and pension of eleven months. My question is whether entire amount of Gratuity and commuted pension is tax free. Shall I show amount of Gratuity, commuted pension ,provident fund in income tax return.
Dear Chaudhari All retirement amounts are tax free except EL encashment
Where we have to show PF amount and gratuity
And where we have to show exemption. New gratuity act wef 29.3.2018. How we will get exemption from FY 2019 for pvt / PSU employee. Whether we have to pay IT for over 10 lakhs. Pls guide me. How it is acceptable.
I’m a senior citizen pensioner getting a monthly pension of 50,000/- of my late husband. While I’m getting a monthly pension of 20,000/- of my own; which makes our total yearly income of 8,40,000/- and I have made a FD of 1,00,000/-
I want to know that how much income tax returns I need to pay? And what are the exemptions that I can have to reduce tax amount?
I am a senior citizen and also apgovt pensioner.Retired on 30/11/2017.My salary income plus pension for FY2017-2018 881855-82271(Deductions)-799580Totalincoome.HOW MUCH TAX I WANT TO BE PAID? Kindly explain sir
For FY 2017-18 your tax including education cess would be Rs 72,013 (assuming you are senior citizen and net taxable income as stated by you is Rs 7,99,580 .
I m 62 yrs pensioner.
I m getting rs 30208 as gross pension monthly and there is deduction of rs 4266 of advance commuted .
Is amount 4266 is taxable or exemptable????
You would only be taxed on the pension received (i.e. 30208 – 4266). The commuted pension is tax free!
If we added arears of pention in present income it will comes in range of 10% s. charge .how it reduced sir . I am a sr citizen