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Home / Finance / Taxes / How to Calculate Income Tax for Pensioners in India?
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How to Calculate Income Tax for Pensioners in India?

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0 2024-06-04T10:35:36+00:00
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Here’s a step-by-step guide to how to calculate income tax for pensioners in India: Add up all sources of income to arrive at the gross total income. Deduct the eligible amounts under various sections of the Income Tax Act to arrive at the net taxable income. Compute Tax Payable Apply the applicable income tax slab rates to the net taxable income to calculate the tax liability. Example Calculation: Pensioner's Details:
  • Pension income: ₹6,00,000
  • Interest income: ₹1,00,000
  • Age: 65 years
Total Income:
  • Gross Total Income = ₹6,00,000 (Pension) + ₹1,00,000 (Interest) = ₹7,00,000
Deductions:
  • Standard Deduction: ₹50,000
  • Section 80TTB: ₹50,000 (interest income)
Net Taxable Income:
  • Net Taxable Income = ₹7,00,000 - ₹50,000 (Standard Deduction) - ₹50,000 (Section 80TTB) = ₹6,00,000
Tax Calculation:
  • Up to ₹3,00,000: Nil (Senior Citizen)
  • ₹3,00,001 to ₹5,00,000: 5% of ₹2,00,000 = ₹10,000
  • ₹5,00,001 to ₹6,00,000: 20% of ₹1,00,000 = ₹20,000
Total Tax Payable:

  • Tax = ₹10,000 + ₹20,000 = ₹30,000

  • Health and Education Cess (4%) = ₹30,000 * 0.04 = ₹1,200

Total Tax Liability:
  • Total Tax Payable = ₹30,000 + ₹1,200 = ₹31,200
This is how to calculate income tax on pension in India. Get Tax Assessments Done by Experts at NoBroker Read more How to Calculate Commutation of Pension

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