Part ll Income tax effect

Now the employee decides to leave the Govt service and joins a multinational with a CTC of Rs. 10.00 lakhs. As discussed a already CTC is not the take home salary and it involves everything like the statutory contribution like PF etc and other allowances like leave travel concession etc., medical premium etc ,

Now we will work out the income tax payable.The same conditions are applied as done earlier with savings of Rs 1.00 lakh under NSC OR repayment of principal etc for availing the benfit under sec 80 C and Rs 1.50 lakhs is saved by means of interest payment towards housing loan.

TOTAL INCOME	1000000
non taxable
food coupons + other non taxable etc	5000
EXEMPTION
LTC (availed)	15000
TA	9600
TAXABLE INCOME	973900
DEDUCTION
80 C	100000
24( INTEREST ON HOUSE)	150000
NET TAXABLE INCOME	723900
TAX @ 30 % + surcharge	170514

 

Hence the net salary will be 1000000 – 170514 = 829486.The income tax is calculated in broad based manner for comparison purposes and other deductions available like tution fees, professional tax etc has not been taken into account.

So if you see the difference which was 150 % from the existing salary has come down to 105 % and approximately Rs. 1.75 lakhs reduced from your salary

The numbers which looked phenomenal has been reduced by 50 % and taking in to account the other invisibles offered in Govt like pension etc can narrow the difference further which is discussed in the following part.

Continued in part lll