Income Tax Calculator

An Income Tax Calculator is a financial tool that helps in figuring out how much tax you are liable to pay during the end of the financial year under the old and new tax systems in India. The Online Tax Calculator uses basic information such as expenses and annual income. The expenses could be in any form like rent, home loan EMIs, interest on education loans, tuition fees, etc. In this calculator, you can also mention the tax-saving schemes.

Income Tax Slabs in India :

The taxpayers pays in India as per the Income Tax Slab. Different tax rates are specified for different ranges of income. As the income of taxpayers increases, the tax rate also increases with the same. The taxpayer has two regimes

Old Tax Regime

The Individual taxpayers both residents and non-residents are divided into three groups:

  • Individuals under the age group of 60 years
  • Senior Citizens under the age group of 60-80 years
  • Super Senior Citizen aged above 80 years

The tax rate of these 3 groups ranges between 5-30%. Under the old tax regime, Indian taxpayers can avail of various tax deductions to reduce their taxable income. In the new tax regime, the tax rate is lower, but taxpayers have to let go of most of the tax deductions.

The list of tax exemptions allowed in the old regime

The tax saving deductions allowed under sections 80C to 80U of the Income Tax Act, 1961 are mentioned below:

  • For all salaried individuals, the standard deduction is Rs 50,000
  • LAT exemption for salaried individuals for travel purposes
  • An individual or HUF can claim tax deductions up to 1.5 Lakh under Section 80C of the Income Tax Act.
  • Any kind of medical expenses under Section 80D
  • You can claim up to Rs 2 Lakh on a self-occupied Home Loan
  • Claim tax exemption on higher education loan under Section 80E
  • If done any charitable donations, claim tax exemption under Section 80G
  • Tax deduction of up to Rs 10,000 on savings account interest income

The list of tax exemptions allowed in the New Regime

  • Deductions on interest paid on home loan for a rent-out property
  • Employer Contribution to NPS under Section 80CCD is available.
  • Investment schemes like PPF and Sukanya Smariddhi Yojana. Interest earned on these schemes is tax-free.
  • The new tax law only eliminates deductions for investments for these two investment avenues.
  • Disabled people transport allowances are obtained to cover work-related conveyance expenses.
  • Expenses incurred on additional employees under Section 80JJA

Steps to use Income Tax Calculator

  • Add the essentials like age, your annual earnings, type of house you are living in, and the rent you pay.
  • Then add your income details like your gross income, income from other sources, interest income, or rental income
  • After that, share the details of exemptions like special allowance, HRA, and EPF contribution.
  • List down the capital gains you have earned in a year through the sale of unlisted shares, debt investments, and unlisted shares.
  • Then add the deductions, such as term insurance premiums, NPS donations, ELSS, etc.
  • After hitting continue, you will see total taxable income and the total tax that you need to pay as per your selected regime

Frequently Asked Questions

  • How does Income Tax Calculator work?
    We all there are different Income Tax Slabs for various sections of society for senior citizens, ordinary people, and super senior citizens. So, using Income Tax calculator, tax calculations are more accurate.
  • How to use Income Tax Calculator
    Yes, online Income Tax Calculators are easy to use, you have to enter the total taxable income, your age, and the investments made under Section 80C of the Income Tax Act. It’s a very user-friendly tool.
  • How to calculate tax for a beginner?
    • Understand with an example
    • Sum of all income= Gross income
    • Tax to be paid= Tax liability – TDS
  • Which amount is tax-free?
    The income below 2.5 Lacs is tax-free as per Income Tax Act.