How is taxable income calculated?
The Total Taxable Income from salary is calculated after all applicable deductions, such as HRA, LTA exemption, Interest on Home Loan are adjusted from the total income, which is the gross salary + income from other sources. And the amount between 5 to 10 lac will be levied 20 per cent tax + 3 per cent Cess.
What is taxable income and how is it determined?
Taxable income is the amount of income used to calculate how much tax an individual or a company owes to the government in a given tax year. It is generally described as adjusted gross income (which is your total income, known as “gross income,” minus any deductions or exemptions allowed in that tax year).
What is taxable income example?
There are two kinds of taxable income: Earned income (salary, wages, tips, bonuses, commissions, etc.) and unearned income (dividends, interest, rents, alimony, winnings, royalties, etc.). For example, let’s assume that Jane works for Company XYZ. Her salary is $75,000 per year.