Income Tax Calculator For Salaried Employees Ay 2019-20 In Excel

Income Tax Calculator for Salaried Employees (AY 2019-20)

Taxable Income: ₹0
Income Tax: ₹0
Education Cess (4%): ₹0
Total Tax Liability: ₹0
Effective Tax Rate: 0%

Comprehensive Guide: Income Tax Calculator for Salaried Employees (AY 2019-20) in Excel

The Assessment Year (AY) 2019-20 corresponds to the Financial Year (FY) 2018-19. For salaried employees in India, understanding how to calculate income tax for this period is crucial for accurate financial planning and tax filing. This guide provides a detailed breakdown of the tax calculation process, available deductions, and how to create your own tax calculator in Excel.

Key Components of Income Tax Calculation for AY 2019-20

  1. Gross Salary: This includes your basic salary, house rent allowance (HRA), special allowances, bonuses, and any other components of your salary package.
  2. Exemptions: Certain components like HRA, Leave Travel Allowance (LTA), and food coupons may be partially or fully exempt from tax.
  3. Deductions: Under various sections of the Income Tax Act (like 80C, 80D, etc.), you can claim deductions to reduce your taxable income.
  4. Tax Slabs: The income tax is calculated based on progressive tax slabs that vary according to your age group.
  5. Rebates and Surcharges: Additional adjustments like rebates for lower income groups and surcharges for high-income earners.

Income Tax Slabs for AY 2019-20 (FY 2018-19)

Age Group Income Range (₹) Tax Rate Surcharge
Below 60 years Up to 2,50,000 Nil –
2,50,001 to 5,00,000 5% –
5,00,001 to 10,00,000 20% –
Above 10,00,000 30% 10% (if income > ₹50 lakh)
15% (if income > ₹1 crore)
60 to 80 years Up to 3,00,000 Nil –
3,00,001 to 5,00,000 5% –
5,00,001 to 10,00,000 20% –
Above 10,00,000 30% 10% (if income > ₹50 lakh)
15% (if income > ₹1 crore)
Above 80 years Up to 5,00,000 Nil –
5,00,001 to 10,00,000 20% –
Above 10,00,000 30% 10% (if income > ₹50 lakh)
15% (if income > ₹1 crore)

Common Deductions Available for Salaried Employees

  • Section 80C: Up to ₹1,50,000 for investments in PPF, EPF, ELSS, life insurance premiums, home loan principal repayment, etc.
  • Section 80D: Up to ₹25,000 for medical insurance premiums (₹50,000 for senior citizens).
  • Section 80G: Donations to approved charitable institutions (50% or 100% deduction depending on the organization).
  • Section 24(b): Up to ₹2,00,000 for home loan interest (for self-occupied property).
  • Section 80E: Interest on education loans (no upper limit, for 8 years).
  • HRA Exemption: Minimum of:
    • Actual HRA received
    • 50% of basic salary (for metro cities) or 40% (for non-metro)
    • Actual rent paid minus 10% of basic salary

Step-by-Step Tax Calculation Process

  1. Calculate Gross Total Income: Sum up all income sources (salary, house property, capital gains, other sources).
  2. Apply Exemptions: Subtract exempt allowances (HRA, LTA, etc.) from the gross salary.
  3. Calculate Net Taxable Income: Subtract eligible deductions (80C, 80D, etc.) from the income after exemptions.
  4. Compute Tax: Apply the relevant tax slab rates to the net taxable income.
  5. Add Cess: Add 4% health and education cess to the calculated tax.
  6. Check for Rebate: If net taxable income is ≤ ₹3,50,000, you’re eligible for a full rebate under Section 87A (max ₹2,500).
  7. Final Tax Liability: Subtract any TDS already deducted and advance tax paid.

Creating an Income Tax Calculator in Excel for AY 2019-20

Here’s how to build your own tax calculator in Excel:

  1. Set Up Input Cells:
    • Basic Salary
    • HRA Received
    • Special Allowances
    • Bonus/Incentives
    • Rent Paid (for HRA calculation)
    • Section 80C Investments
    • Section 80D (Medical Insurance)
    • Home Loan Interest (Section 24)
    • Other Deductions (80G, etc.)
  2. Create Calculation Formulas: 
    =IF(AND(Age<60, Income<=250000), 0,
   IF(AND(Age<60, Income<=500000), (Income-250000)*0.05,
   IF(AND(Age<60, Income<=1000000), 12500+(Income-500000)*0.2,
   IF(AND(Age<60, Income>1000000), 112500+(Income-1000000)*0.3, 0))))

For 60-80 age group:
=IF(AND(Age>=60, Age<=80, Income<=300000), 0,
   IF(AND(Age>=60, Age<=80, Income<=500000), (Income-300000)*0.05,
   IF(AND(Age>=60, Age<=80, Income<=1000000), 10000+(Income-500000)*0.2,
   IF(AND(Age>=60, Age<=80, Income>1000000), 110000+(Income-1000000)*0.3, 0))))

For above 80 age group:
=IF(AND(Age>80, Income<=500000), 0,
   IF(AND(Age>80, Income<=1000000), (Income-500000)*0.2,
   IF(AND(Age>80, Income>1000000), 100000+(Income-1000000)*0.3, 0)))
  3. Add Surcharge Logic: 
    =IF(Income>10000000, Tax*0.15,
   IF(Income>5000000, Tax*0.1, 0))
  4. Calculate Education Cess: 
    =(Tax+Surcharge)*0.04
  5. Final Tax Liability: 
    =Tax+Surcharge+Cess-Rebate

Comparison: Old vs New Tax Regime (Note: New regime introduced in AY 2020-21)

Feature Old Tax Regime (AY 2019-20) New Tax Regime (From AY 2020-21)
Tax Slabs 3 slabs (5%, 20%, 30%) 6 slabs (0%, 5%, 10%, 15%, 20%, 25%, 30%)
Basic Exemption Limit ₹2.5 lakh (below 60)
₹3 lakh (60-80)
₹5 lakh (above 80)		 ₹2.5 lakh (all ages)
Deductions (80C, 80D, etc.) Allowed Not allowed (except 80CCD(2) and 80JJAA)
HRA Exemption Allowed Not allowed
Standard Deduction ₹40,000 ₹50,000
Rebate (Section 87A) ₹2,500 (income ≤ ₹3.5 lakh) Full tax rebate (income ≤ ₹5 lakh)
Surcharge 10% (₹50L-₹1Cr), 15% (>₹1Cr) Same
Education Cess 4% 4%

Common Mistakes to Avoid While Calculating Tax

  • Ignoring HRA Exemption: Many employees forget to claim HRA exemption which can significantly reduce taxable income.
  • Not Utilizing Section 80C Fully: The ₹1.5 lakh limit is often underutilized. Consider combining multiple instruments to reach the limit.
  • Missing Medical Insurance Deductions: Section 80D provides substantial savings, especially for senior citizens.
  • Incorrect Home Loan Interest Calculation: The ₹2 lakh limit is for self-occupied property; for let-out properties, there’s no upper limit.
  • Forgetting to Add Other Income: Interest from savings accounts, fixed deposits, or rental income must be included in total income.
  • Not Verifying Form 16: Always cross-check the figures in your Form 16 with your actual investments and deductions.
  • Ignoring Advance Tax: If your tax liability exceeds ₹10,000, you must pay advance tax in installments.

How to Optimize Your Tax Saving for AY 2019-20

  1. Maximize Section 80C: Invest in a mix of instruments like PPF (15-year lock-in with 7-8% returns), ELSS (3-year lock-in with market-linked returns), and NSC (5-year lock-in with fixed returns).
  2. Utilize HRA Exemption: If you’re paying rent, ensure you provide rent receipts and your landlord’s PAN (if rent exceeds ₹1 lakh annually).
  3. Medical Insurance: Buy health insurance for yourself and parents to claim under Section 80D (up to ₹50,000 for senior citizen parents).
  4. Home Loan Benefits: If you have a home loan, claim both principal repayment (80C) and interest payment (Section 24) benefits.
  5. Education Loan Interest: If you’re repaying an education loan, the entire interest amount is deductible under Section 80E.
  6. Donations: Contribute to approved charitable institutions to claim deductions under Section 80G.
  7. NPS Contributions: Additional ₹50,000 deduction under Section 80CCD(1B) over the ₹1.5 lakh limit of 80C.

Important Deadlines for AY 2019-20

  • Due Date for Filing ITR: July 31, 2019 (for non-audit cases)
  • Due Date for Audit Cases: September 30, 2019
  • Advance Tax Due Dates:
    • 15% by June 15, 2018
    • 45% by September 15, 2018
    • 75% by December 15, 2018
    • 100% by March 15, 2019
  • Last Date for Tax Saving Investments: March 31, 2019
  • TDS Certificate (Form 16) Issue Date: By June 15, 2019

Frequently Asked Questions

  1. Q: Can I file my ITR after the due date?

    A: Yes, you can file a belated return until March 31, 2020, but with a late fee of ₹5,000 (₹1,000 if income is below ₹5 lakh).

  2. Q: What if I forget to claim a deduction?

    A: You can file a revised return to claim missed deductions, provided you file within the due date for revised returns.

  3. Q: How is rental income taxed?

    A: Rental income is taxed under “Income from House Property”. You can deduct 30% of the rental value as standard deduction and also claim interest on home loan if any.

  4. Q: What is the difference between financial year and assessment year?

    A: Financial Year (FY) is the year in which you earn the income (April 1 to March 31). Assessment Year (AY) is the year following the FY in which you file the return for that income.

  5. Q: Can I claim both HRA and home loan benefits?

    A: Yes, if you’re living in a rented house (for which you claim HRA) and have another property on loan (for which you claim interest deduction).

Authoritative Resources

Sample Excel Formulas for Common Calculations

Calculation Excel Formula Example
HRA Exemption =MIN(HRA_received, IF(metro=TRUE, 50%, 40%)*basic_salary, rent_paid-10%*basic_salary) =MIN(B2, IF(C2=TRUE, 50%, 40%)*A2, D2-10%*A2)
Section 80C Deduction =MIN(80C_investments, 150000) =MIN(E2, 150000)
Section 80D Deduction =IF(age>60, MIN(80D_amount, 50000), MIN(80D_amount, 25000)) =IF(F2>60, MIN(G2, 50000), MIN(G2, 25000))
Home Loan Interest (Section 24) =MIN(home_loan_interest, 200000) =MIN(H2, 200000)
Taxable Income =gross_income – exemptions – deductions =I2-J2-K2
Income Tax (Below 60) =IF(income<=250000, 0, IF(income<=500000, (income-250000)*5%, IF(income<=1000000, 12500+(income-500000)*20%, 112500+(income-1000000)*30%))) =IF(L2<=250000, 0, IF(L2<=500000, (L2-250000)*0.05, IF(L2<=1000000, 12500+(L2-500000)*0.2, 112500+(L2-1000000)*0.3)))

Case Study: Tax Calculation Example

Let’s consider Mr. Sharma, a 35-year-old salaried employee in Delhi with the following details:

  • Basic Salary: ₹8,00,000
  • HRA: ₹3,00,000 (40% of basic)
  • Special Allowance: ₹1,50,000
  • Bonus: ₹50,000
  • Rent Paid: ₹3,60,000 (₹30,000/month)
  • Section 80C Investments: ₹1,50,000
  • Medical Insurance: ₹25,000
  • Home Loan Interest: ₹2,00,000

Step 1: Calculate Gross Total Income

₹8,00,000 (Basic) + ₹3,00,000 (HRA) + ₹1,50,000 (Special Allowance) + ₹50,000 (Bonus) = ₹13,00,000

Step 2: Calculate Exemptions

HRA Exemption = MIN(₹3,00,000, 50% of ₹8,00,000, ₹3,60,000 – 10% of ₹8,00,000) = MIN(₹3,00,000, ₹4,00,000, ₹2,80,000) = ₹2,80,000

Step 3: Calculate Net Taxable Income

₹13,00,000 – ₹2,80,000 (HRA) = ₹10,20,000

Deductions:

  • Section 80C: ₹1,50,000
  • Section 80D: ₹25,000
  • Section 24: ₹2,00,000

Total Deductions = ₹3,75,000

Taxable Income = ₹10,20,000 – ₹3,75,000 = ₹6,45,000

Step 4: Calculate Income Tax

  • First ₹2,50,000: Nil
  • Next ₹2,50,000 (₹2,50,001 to ₹5,00,000): ₹2,50,000 × 5% = ₹12,500
  • Remaining ₹1,45,000 (₹5,00,001 to ₹6,45,000): ₹1,45,000 × 20% = ₹29,000
  • Total Tax = ₹12,500 + ₹29,000 = ₹41,500
  • Education Cess (4%) = ₹41,500 × 4% = ₹1,660
  • Total Tax Liability = ₹41,500 + ₹1,660 = ₹43,160

Step 5: Check for Rebate

Since taxable income (₹6,45,000) > ₹3,50,000, no rebate under Section 87A.

Final Tax Liability: ₹43,160

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