Calculation of Tax Liabilities

9 Easy Steps to Calculate Your Tax Liability

Here are 9 very easy steps to calculate your taxable income andincome tax on taxable
income. The persons who are confused to calculate their tax for A.Y. 2018-19 should read
the following article to calculate your income tax very easily with step-by-step guide. If you
have any doubt regarding the calculation of taxable income or income tax should comment
below. We will reply you as early as possible.
The following article is applicable for individuals/HUFs/AOP/BOI/Artificial Judicial Persons
for A.Y.2018-19.

Computation/Calculation of Taxable Income
Step 1: Calculate income under each head of income; for example:salary, house
property, profession, business, capital gains, and income from other sources.
Step 2: Don’t forget to add income of any other person, which is required to be
Step 3: Total the incomes as we discussed above.
Step 4: Deduct losses as per set off of losses provisions if applicable.
Step 5: Deduct deductions, which allowable as per under section80C to 80U to
arrive at total/taxable income.
Computation/Calculation of Tax Liability or Tax Refund
Step 1: Calculate Tax on Income(s) taxable at special rates; short-term capital gains,
long-term capital gains. Please check special tax rates/Capital Gain Tax Rates for
A.Y.2018-19 here.
Step 2: Calculate Tax at normal rates on balance of taxable income. Please check
normal tax rates/Income Tax Slab for A.Y.2018-19 here.
Step 3: Now, do sum of tax calculated in Step 1 & Step 2.
Step 4: Deduct tax rebate u/s 87A.
Step 5: Now, add surcharge at applicable as per income tax slab
Step 6: Add education cess @ 2% and secondary & higher education cess @ 1% on
net income tax calculated in Step 3 and in step 4.
Step 7: Deduct TDS/TCS if any from the tax calculated in step 6.
Step 9: Deduct advance tax if any.
Step 9: Balance is your tax payable or tax refund.
Note: Any tax payable or tax refund should be rounded off to the nearest multiple of Rs.10.

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