MNC manager Anthony pays 24.17% of his income as tax
Part III
E&Y series on price people pay for government
Anthony is in his early thirties and works as a senior manager in the sales division of an MNC. His wife has taken a short sabbatical and is busy with their daughter Tina who is in primary school.
Anthony earns a gross salary of Rs 25 lakh per annum . With some bank interest and income from investments, his gross total income is a little over Rs 25.50 lakh per year. Occupying a penthouse in the same housing apartment complex as Akbar, Anthony has taken a housing loan and pays an EMI of Rs 40,000 per month and obtains a tax deduction of Rs 1.50 lakh per year on the interest outgo.
Anthony has ensured that he can take full advantage of tax sops for investments under Section 80CCF of the Income Tax Act. So he has invested an additional Rs 20,000 in infrastructure bonds as his own contribution of Rs 1,29,600 will fetch him a tax break under Section 80C up to a limit of Rs 1,00,000 only.
Additionally , like Akbar, the premium he pays for Mediclaim cover entitles him to an additional deduction for tax purpose , but subject to maximum limit of Rs 15,000.
Since Anthony does not pay rent, he isnt entitled to HRA sops. However, after taking into consideration the deductions /exemptions available for LTA, employers contribution to PF, transport allowance , reimbursement of his telephone/internet and medical expenses, all aggregating to Rs 5,49,700, his taxable income comes down to Rs 20,04,300.
E&Y series on price people pay for government
Anthony is in his early thirties and works as a senior manager in the sales division of an MNC. His wife has taken a short sabbatical and is busy with their daughter Tina who is in primary school.
Anthony earns a gross salary of Rs 25 lakh per annum . With some bank interest and income from investments, his gross total income is a little over Rs 25.50 lakh per year. Occupying a penthouse in the same housing apartment complex as Akbar, Anthony has taken a housing loan and pays an EMI of Rs 40,000 per month and obtains a tax deduction of Rs 1.50 lakh per year on the interest outgo.
Anthony has ensured that he can take full advantage of tax sops for investments under Section 80CCF of the Income Tax Act. So he has invested an additional Rs 20,000 in infrastructure bonds as his own contribution of Rs 1,29,600 will fetch him a tax break under Section 80C up to a limit of Rs 1,00,000 only.
Additionally , like Akbar, the premium he pays for Mediclaim cover entitles him to an additional deduction for tax purpose , but subject to maximum limit of Rs 15,000.
Since Anthony does not pay rent, he isnt entitled to HRA sops. However, after taking into consideration the deductions /exemptions available for LTA, employers contribution to PF, transport allowance , reimbursement of his telephone/internet and medical expenses, all aggregating to Rs 5,49,700, his taxable income comes down to Rs 20,04,300.
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At least holidays can continue to be happy ! Entertainment expenses in the form of television subscription, movies, New Year events, plays, added up to Rs 32,960 with a tax incidence of 30.1% against this head.
Tina is a good student, but peer pressure is high, even in primary school. Anthony incurs a school fee of Rs 13,734 per year against which there is no indirect levy. However, he pays a sum of Rs 16,480 per year for private coaching classes, which attracts an indirect tax burden of approximately 10%.
Currently, Anthony pays an I-T of Rs 4,68,949 and professional tax of Rs 2,500. As can be seen he pays a little more than 10.5% of his total spend as indirect tax at Rs 1,45,785. This brings his total tax outgo to Rs 6,17,234 or 24.17% of his gross total income.
At least holidays can continue to be happy ! Entertainment expenses in the form of television subscription, movies, New Year events, plays, added up to Rs 32,960 with a tax incidence of 30.1% against this head.
Tina is a good student, but peer pressure is high, even in primary school. Anthony incurs a school fee of Rs 13,734 per year against which there is no indirect levy. However, he pays a sum of Rs 16,480 per year for private coaching classes, which attracts an indirect tax burden of approximately 10%.
Currently, Anthony pays an I-T of Rs 4,68,949 and professional tax of Rs 2,500. As can be seen he pays a little more than 10.5% of his total spend as indirect tax at Rs 1,45,785. This brings his total tax outgo to Rs 6,17,234 or 24.17% of his gross total income.
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