If my annual income is 3.5 lakh how much tax do i have to pay?

For tax calculations you should tell your status. Male, Female or Senior Citizen (>65 years). You did not tell your tax status. So I am giving tax for all of them.

The basic tax exemptions and tax payable on Rs.3.5 lakhs income is as follows for this running financial year 2007-08 (1-4-2007 to 31-3-2008)

1) Male <65 years of Age: Tax free amount Rs.1,10,000: Tax payable on 3.5L= Tax 54,000 + Education Cess 1,620= Total Rs.55,620/-. If you save Rs.1 lakh in 80C investments then your tax liabulity will be reduced to Rs.24,720/-

2) Female <65 years of Age: Tax free amount Rs.1,45,000: Tax payable on 3.5L= Tax 50,500 + Education Cess 1,515= Total Rs.52,015/-. If you save Rs.1 lakh in 80C investments then your tax liability will be reduced to Rs.21,115/-

3) Seniour Citizen >65 years of Age: Tax free amount Rs.1,95,000: Tax payable on 3.5L= Tax 41,000 + Education Cess 1,230= Total Rs.42,230/-. If you save Rs.1 lakh in 80C investments then your tax liabulity will be reduced to Rs.11,330/-

Note: For last year (FY:2006-07) the basic exemption limits was Male 1 lakh, Female 1.35 Lakhs. Sen.Cit.Rs.1.85 Lakhs. That means the tax limit was raised by Rs.10,000 to all for this year (FY:2007-08)

Depends on how much you save. You can save in NSCs, provident fund etc up to 1 lakh. 1 lakh is free of tax. On the remaining amount you have to pay tax at fixed slabs.

You can save up to Rs. 1,00,000 by investing it, ask a C.A. for some good advise. On the rest 2,50,000 which falls in 1,50,000 - 2,50,000 slot of Income tax you will have to pay Rs. 5,000 + 20% of income in excess of Rs. 1,50,000 which means you are going to pay 5,000 + 50,000 = Rs. 55,000.

Please check the following link for the detailed answer

http://www.taxmann.net/directtaxlawsPage...