1. Calculating your income taxes is very easy. All you need to know is which tax slab will be
applicable to you. But, before we get to tax slabs, lets understand in 3 quick steps how to
calculate taxes.
Step 1: Identify and tabulate all sources of income – salary, business income, interest, rental,
capital gains
Step 2: Identify which deductions and tax savings are applicable to you – 80C deductions,
interest repayment
Step 3: Apply the relevant tax slab depending upon your sex and age, after taking the deductions
and savings
In addition to the tax payable on income, you will also have to pay a Surcharge (if your income
exceeds Rs.10 lakhs in case of individuals) and an Education Cess levied by the Government on
all tax payers. If you are a salaried employee, chances are that your employer has already
deducted these in your monthly pay.
The tax slab will help you identify how much of your income will be available to you tax free
and thereafter what tax rate will be charged to the remaining income.
If you are a woman or a senior citizen, you will be entitled to a larger tax-free amount. The
following tables will help you identify which tax slabs are relevant for you:
• Resident Individual below 65 years of age or HUF (tax free income up to the first Rs.1.50
lakhs)
• Resident Woman below 65 years of age (tax free income up to the first Rs.1.80 lakhs)
• Resident Senior Citizens – 65 years of age or above (tax free income up to the first
Rs.2.25 lakhs)
As shown below, after the initial tax-free amount, different slabs of your income will be charged
at different rates.
For Resident Individual below 65 years of age or HUF
Net Income Range Income Tax Plus Surcharge Plus Education Cess
Up to Rs.1,50,000 Nil Nil Nil
Rs.1,50,001 to
10% of income above Rs.1,50,000 Nil 3% of income tax
Rs.3,00,000
Rs.3,00,001 to Rs.15,000 + 20% of income above
Nil 3% of income tax
Rs.5,00,000 Rs.3,00,000
Rs.5,00,001 to Rs.55,000 + 30% of income above
Nil 3% of income tax
Rs.10,00,000 Rs.5,00,000
Rs.2,05,000 + 30% of income above 10% of income 3% of income tax and
Above Rs. 10,00,000
Rs.10,00,000 tax surcharge

2. For Resident Women below 65 years of age
Net Income Range Income Tax Plus Surcharge Plus Education Cess
Up to Rs.1,80,000 Nil Nil Nil
Rs.1,80,001 to
10% of the income above Rs.1,80,000 Nil 3% of income tax
Rs.3,00,000
Rs.3,00,001 to Rs.12,000 + 20% of the income above
Nil 3% of income tax
Rs.5,00,000 Rs.3,00,000
Rs.5,00,001 to Rs.52,000 + 30% of the income above
Nil 3% of income tax
Rs.10,00,000 Rs.5,00,000
Rs.2,02,000 + 30% of the income 10% of income 3% of income tax and
Above Rs.10,00,000
above Rs.10,00,000 tax surchargee
For Resident Senior Citizens ( 65 years of age and above, including those who turn 65 at any time
during the Financial Year 2008-09)
Net Income Range Income Tax Plus Surcharge Plus Education Cess
Up to Rs.2,25,000 Nil Nil Nil
Rs.2,25,001 to
10% of the income above Rs.2,25,000 Nil 3% of income tax
Rs.3,00,000
Rs.3,00,001 to Rs.7,500 + 20% of the income above
Nil 3% of income tax
Rs.5,00,000 Rs.3,00,000
Rs.5,00,001 to Rs.47,500 + 30% of the income above
Nil 3% of income tax
Rs.10,00,000 Rs.5,00,000
Rs.2,05,000 + 30% of the income 10% of income 3% of income tax and
Above Rs.10,00,000
above Rs.10,00,000 tax surchargee