How to compute the total tax liability?

Ans. After ascertaining the total income, i.e., income liable to tax, the next step is to compute the tax liability for the year. Tax liability is to be computed by applying the rates prescribed in this regard. Following table will help in understanding the manner of computation of the total tax liability of the taxpayer.

Computation of total income and tax liability for the year

Particulars	Amount
Income from salary	XXXXX
Income from house property	XXXXX
Profits and gains of business or profession	XXXXX
Capital gains	XXXXX
Income from other sources	XXXXX
Total of head wise income	XXXXX
Set off of kosses	XXXXX
Gross Total Income	XXXXX
Less : Deductions under Chapter VI-A (i.e., under section 80C to 80U))	(XXXXX)
Total Income (i.e., taxable income)	XXXXX
Tax on total income to be computed at the applicable rates (for rates of tax, refer "Tax Rate" section)	XXXXX
Less : Rebate under section 87A (discussed in later FAQ)	(XXXXX)
Tax Liability After Rebate	XXXXX
Add: Surcharge (discussed in later FAQ)	XXXXX
Tax Liability After Surcharge	XXXXX
Add: Health & Education cess @ 4% on tax liability after surcharge	XXXXX
Tax liability before rebate under sections 86, section 89, sections 90, 90A and 91 (if any) (*)	XXXXX
Less : Rebate under sections 86,  section 89, sections 90, 90A and 91(if any) (*)	(XXXXX)
Tax liability for the year before pre-paid taxes	XXXXX
Less: Prepaid taxes in the form of TDS, TCS and advance tax	(XXXXX)
Tax payable/Refundable	XXXXX

(*) Rebate under section 86 is available to a member of association of persons (AOP) or body of individuals (BOI) in respect of income received by such member from the AOP/BOI.

Rebate (i.e., relief) under section 89 is available to a salaried employee in respect of sum received towards arrears of salary, gratuity, etc.

Rebate under sections​ 90, 90A and 91 is available to a taxpayer in respect of double taxed income, i.e., income which is taxed in India as well as abroad.

Note : For provisions relating to Minimum Alternate Tax (MAT) in case of corporate taxpayers and Alternate Minimum Tax (AMT)  in case of non-corporate taxpayers refer tutorial on "MAT/AMT".