Income Tax Calculation in India 2014-15

A good website describing the calculation with example is as follows: Learn-how-to-calculate-your-income-tax

An example calculation with an annual income of Rs 12,00,000.00 (where the income spans over all the three tax slabs), is shown below:

Slab	Income Slab (Rs.)	Income Tax Rate	Income Tax	Income Tax Amount
0	0 to 2,50,000	NIL	0	0
I	2,50,001-5,00,000	10%	10% of 2,50,000	25,000
II	5,00,001-10,00,000	20%	20% of 5,00,000	10,00,00
III	10,00,001 and above	30%	30% of (12,00,000 – 10,00,000) = 30% of 2,00,000	60,000
Total Income Tax Amount				1,85,000

 
 Explanation:
If your income falls in Slab I, tax will be deducted on the amount that exceeds Rs. 2,50,001/- . Similarly, tax for Slab II and Slab III will be calculated for the amount that exceeds Rs. 5,00,001/- and Rs. 10,00,001/- respectively.

If the income lies above Slab III, then the tax in Slab I is calculated as 10% of (5,00,000 - 2,50,000) and tax in Slab II is calculated as 20% of (10,00,000 - 5,00,000). And the tax Slab III is calculated as 30% of (Annual Income - 10,00,000).