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Income Tax Ready Reckoner - Part I

 

 

Here's a ready reckoner on how to calculate your tax dues so that you can plan your investments accordingly

 

 

Cracking The Code

  • A: The first step would be to get a fix on all sources of your income amounting to gross total income (GTI). Your GTI could come under any one or more of the five heads—salary income, business income, capital gains, house property or other sources.
  • B: Certain expenses and payments reduce your GTI and thereby, reduce tax liability. These are not necessarily investments as such, but fall under non-80C commitments, such as medical insurance premium under Section 80D, or interest paid on a home loan.
  • C: Get a fix on your existing commitments towards the Section 80C instruments. The upper limit for deductions is Rs 1 lakh.
  • D: Figure out how much more you need to invest to reduce your taxable liability (Rs 1 lakh minus C). Link new investments to your long-term goals as most tax-savers have long tenures.

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