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How is the income tax and PF calculated in India? For example: person X is getting 6 lakhs per annum. How is the PF calculated for him?
Can you tell me how income tax and PF is calculated in India?
Sure! For income tax, it depends on the income slab that the person falls under. For person X who is getting 6 lakhs per annum, the income tax rate would be 5% up to 2.5 lakhs, 20% from 2.5 lakhs to 5 lakhs, and 30% for income above 5 lakhs. As for PF, it is calculated as 12% of the basic salary and dearness allowance (DA) of an employee. So, for person X, if his basic salary and DA are 4 lakhs per annum, his PF contribution would be 48,000 per annum (4 lakhs x 12%).