Vivek Tiwari & Co.

Tax Calculation

Tax calculation may be defined as the process of tax payable by an individual, HUF, Company, AOP, BOI or firm as the case may be. There are different slab rate for each one of the above which was notified in the budget of each other and slab rate mentioned in the Income Tax Act,1961 Tax calculation for an Individual, AOP, HUF, BOI, You have to check the following checkpoints which are given below-

a- You have to find the residential status of the given person whether the person is resident or not.
b- Then you have the classify the income of person in five head which are given below.
- i- Under the head of Salary.
- ii- Under the head of House Property.
- iii- Under the head of Profit and Gains from business.
- iv- Under the head of Capital Gain.
- v- Under the head of other source.
c- Computation of income under five heads.
d- Then you have to apply the provisions of Clubbing of Income.
e- Then you have to apply the provision the Carried forward and set off losses.
f- Then your Gross Income will income.
g- After applying above provisions then you have to apply the provision of Deduction under section 80c to 80u and Deduction under Section 10AA.
h- Then you have to do computation of Total Income.
i- Then you have to round off the Total Income, according to section 288A.
j- Then you have to apply tax rates and further classified into two types-
- i- Special income have special tax rates. Example Casual income, Long term Capital Gain, Short Term Capital Gain etc.
- ii- Normal income have two option Default Scheme under section 115BAC (For the Previous Year 2023-2024 and Assessment Year 2024-2025)
  or
  Option Scheme which is mentioned under Finance Act
k- Application of surcharge and Rebate as the case may be.
l- Add Health and Education Cess @4%
m- Alternate minimum Tax, if you are opting for optional scheme.
n- Examine whether you have to pay tax according to normal scheme or optional scheme.
o- Deduction of T.D.S. or T.C.S. or A.M.T., as the case may be.
p- Rounding of Total Tax payable to the government through the annual return.