►What is Income Tax Calculator? Videos by admin - February 17, 2023February 18, 20230 MORE VIDEOS What is Income Tax Calculator? The Income tax calculator is an easy-to-use online tool that helps you estimate your taxes based on your income after the Union Budget is presented. We have updated our tool in line with the income tax changes proposed in the Union Budget 2022-23.(Read the highlights here) How to use the Income tax calculator for FY 2022-23 (AY 2023-24)? Following are the steps to use the tax calculator: 1. Choose the financial year for which you want your taxes to be calculated. 2. Select your age accordingly. Tax liability in India differs based on the age groups. 3. Click on ‘Go to Next Step’ 4. Enter your taxable salary i.e. salary after deducting various exemptions such as HRA, LTA, standard deduction, and so on. (if you want to know your tax liability under the old tax slabs) Or else, just enter your salary i.e salary without availing exemptions such as HRA, LTA, standard deduction, professional tax and so on. (if you want to know your tax liability under the new tax slabs) 5. Along with taxable salary, you must enter other details such as interest income, rental income, interest paid on home loan for rented, and interest paid on loan for self occupied property. 6. For Income from Digital Assets, enter the net income ( Sale consideration less Cost of Acquisition), such income is taxed at 30% Plus applicable surcharge and cess. 7. Click on ‘Go to Next Step’ again. 8. In case, you want to calculate your taxes under the old tax slabs,you will have to enter your tax saving investments under section 80C, 80D, 80G, 80E and 80TTA. 9. Click on ‘Calculate’ to get your tax liability. You will also be able to see a comparison of your pre-budget and post-budget tax liability (old tax slabs and new tax slabs). Note: Whichever field is not applicable, you can enter “0”. You can even get your tax computation on your mail. How to calculate income tax? (See example) Income tax calculation for the Salaried Income from salary is the sum of Basic salary + HRA + Special Allowance + Transport Allowance + any other allowance. Some components of your salary are exempt from tax, such as telephone bills reimbursement, leave travel allowance. If you receive HRA and live on rent, you can claim exemption on HRA. Calculate exempt portion of HRA, by using this HRA Calculator. On top of these exemptions, a standard deduction of Rs 40,000 was introduced in budget 2018. This has been increased to Rs 50,000 in budget 2019. In case you opt for the new tax regime, these exemptions will not be available to you. Let’s understand income tax calculation under the current tax slabs and new tax slabs (optional) by way of an example. Neha receives a Basic Salary of Rs 1,00,000 per month. HRA of Rs 50,000. Special Allowance of Rs 21,000 per month. LTA of Rs 20,000 annually. Neha pays a rent of Rs 40,000 and lives in Delhi. Nature Amount Exemption/Deduction Taxable(Old regime) Taxable(New regime) Basic Salary 12,00,000 – 12,00,000 12,00,000 HRA 6,00,000 3,60,000 2,40,000 6,00,000 Special Allowance 2,52,000 – 2,52,000 2,52,000 LTA 20,000 12,000 (bills submitted) 8,000 20,000 Standard Deduction – 50,000 50,000 – Gross Total Income from Salary 16,50,000 20,72,000 To calculate Income tax, include income from all sources. Include: Income from Salary (salary paid by your employer) Income from house property (add any rental income, or include interest paid on home loan) Income from capital gains (income from sale purchase of shares or house) Income from business/profession (income from freelancing or a business or profession) Income from other sources (saving account interest income, fixed deposit interest income, interest income from bonds) Neha has income from interest from savings account of Rs 8,000 and a fixed deposit interest income of Rs 12,000 during the year. Neha has made some investments to save income tax. PPF investment of Rs 50,000. ELSS purchase of Rs 20,000 during the year. LIC premium of Rs 8,000. Medical insurance paid of Rs 12,000. Here are the deductions Neha can claim under the old tax regime. Nature Maximum Deduction Eligible investments/expenses Amount claimed by Neha Section 80C Rs.1,50,000 PPF deposit Rs 50,000, ELSS investment Rs 20,000, LIC premium Rs 8,000. EPF deducted by employer(Neha’s contribution) = Rs 1,00,000 *12% *12 = 1,44,000 Rs 1,50,000 Section 80D Rs 25,000 for self Rs 50,000 for parents Medical insurance premium Rs 12,000 Rs 12,000 Section 80TTA 10,000 Savings account interest 8,000 Rs. 8,000 Calculation of gross taxable income in India (Old regime) Nature Amount Total Income from Salary 16,50,000 Income from Other Sources 20,000 Gross Total Income 16,70,000 Deductions 80C 1,50,000 80D 12,000 – 80TTA 8,000 1,70,000 Gross Taxable Income 15,00,000 Total tax on above (including cess) 2,73,000 Calculation of gross taxable income in India (New regime) Nature Amount Total Income from Salary 20,72,000 Income from Other Sources 20,000 Gross Total Income 20,92,000 Total tax on above (including cess) 3,79,704 This is how income tax has been calculated for Neha under the new tax regime Up to Rs 2,50,000 Exempt from tax 0 Rs 2,50,000 to Rs 5,00,000 5% (5% of Rs 5,00,000 less Rs 2,50,000) 12,500 Rs 5,00,000 to Rs 7,50,000 10% (10% of Rs 7,50,000 less Rs 5,00,000) 25,000 Rs 7,50,000 to Rs 10,00,000 15% (15% of Rs 10,00,000 less Rs 7,50,000) 37,500 Rs 10,00,000 to Rs 12,50,000 20% (20% of Rs 12,50,000 less Rs 10,00,000) 50,000 Rs 12,50,000 to Rs 15,00,000 25% (25% of Rs 15,00,000 less Rs 12,50,000) 62,500 More than Rs Rs 15,00,000 30% (30% of Rs 20,92,000 less Rs 15,00,000) 1,77,600 Cess 4% of total tax (4% of Rs 12,500 + Rs 25,500+ Rs 37,500 + Rs 50,000 + Rs 62,500 + Rs 1,77,600) 14,604 Total Income Tax Rs 12,500 + Rs 25,500+ Rs 37,500 + Rs 50,000 + Rs 62,500 + Rs 1,77,600 + Rs 14,604 Rs 3,79,704 What are the exemptions/ deductions that are disallowed under the new tax regime? Individual or HUF opting for taxation under the newly inserted section 115BAC of the Act shall not be entitled to the following exemptions/deductions: (i) Leave travel concession as contained in clause (5) of section 10; (ii) House rent allowance as contained in clause (13A) of section 10; (iii) Some of the allowance as contained in clause (14) of section 10; (iv) Allowances to MPs/MLAs as contained in clause (17) of section 10; (v) Allowance for the income of minor as contained in clause (32) of section 10; (vi) Exemption for SEZ unit contained in section 10AA; (vii) Standard deduction, deduction for entertainment allowance and employment/professional tax as contained in section 16; (viii) Interest under section 24 in respect of self-occupied or vacant property referred to in sub-section (2) of section 23. (Loss under the head income from house property for the rented house shall not be allowed to be set off under any other head and would be allowed tobe carried forward as per extant law); (ix) Additional deprecation under clause (iia) of sub-section (1) of section 32; (x) Deductions under section 32AD, 33AB, 33ABA; (xi) Various deduction for donation for or expenditure on scientific research contained in sub-clause (ii) or sub-clause (iia) or sub-clause (iii) of sub-section (1) or sub-section (2AA) of section 35; (xii) Deduction under section 35AD or section 35CCC; (xiii) Deduction from family pension under clause (iia) of section 57; (xiv) Any deduction under chapter VIA (like section 80C, 80CCC, 80CCD, 80D, 80DD, 80DDB, 80E, 80EE, 80EEA, 80EEB, 80G, 80GG, 80GGA, 80GGC, 80IA, 80-IAB, 80-IAC, 80-IB, 80-IBA, etc). However, deduction under sub-section (2) of section 80CCD (employer contribution on account of the employee in notified pension scheme) and section 80JJAA (for new employment) can be claimed. Following allowances shall be allowed as notified under section 10(14) of the Act to the Individual or HUF exercising option under the proposed section: a) Transport Allowance granted to a divyang employee to meet the expenditure for the purpose of commuting between place of residence and place of duty b) Conveyance Allowance granted to meet the expenditure on conveyance in performance of duties of an office; c) Any Allowance granted to meet the cost of travel on tour or on transfer; d) Daily Allowance to meet the ordinary daily charges incurred by an employee on account of absence from his normal place of duty. Frequently Asked Questions ( FAQ’s ) How much tax should I pay on my salary? You will be required to pay a tax depending on the income slab you belong to. Income Tax Rates applicable for individuals under 60 years of age Income Slab Applicable Tax Rate Up to Rs 2.50 lakh Nil Above Rs 2.50 lakh and up to Rs 5 lakh 5% Above Rs 5 lakh and up to Rs 7.5 lakh 10% Above Rs 7.5 lakh and up to Rs 10 lakh 15% Above Rs 10 lakh and up to Rs 12.5 lakh 20% Above Rs 12.5 lakh and up to Rs 15 lakh 25% Above Rs 15 lakh 30% Suppose you have a gross taxable income of Rs 7.50 lakh after all the deductions/exemptions, your tax will be calculated as follows: Income Slab Applicable Tax Rate Applicable Income Tax (in Rs) Up to Rs 2.50 lakh No tax 0 0 Above Rs 2.50 lakh and up to Rs 5 lakh 5% Rs 2.50 lakh 12,500 Above Rs 5 lakh and up to Rs 7.5 lakh 10% Rs 2.50 lakh 25,000 Total Income Tax Payable 37,500 Hence, you will be required to pay a tax of Rs 37,500 (excluding cess) on your gross taxable income i.e. Rs 7.50 lakh. What is the maximum non-taxable income limit? The maximum limit of non-taxable income for an individual is set at Rs 2.5 lakh. However, you can also get a rebate of Rs 2,500 under section 87A if you have a total income of less than Rs 3.5 lacs for FY 2018-19. From FY 2019-20 onwards, the rebate has been increased to Rs 12,500 for an income less than Rs 5 lakh. So, that means an individual earning less than 5 lakh will not be required to pay any income tax from FY 2019-20 onwards. If you have tax saving investments under section 80C of up to Rs 1.5 lakh then you will not have to pay any taxes till Rs 6.5 lakhs Does everyone have to file their income tax returns? If the income of an individual is below the basic exemption limit then he is not required to file income tax returns. Though those who have income less than Rs 2.5L and want to claim an income tax refund can only claim the refund by filing an ITR. Otherwise, it is mandatory to file income tax returns in any other case. Read more here. Does the income tax calculator calculate for TDS? No, the income tax calculator does not compute the Tax Deducted at Source (TDS). However, it calculates your tax liability for the assessment year. What are the details you need when you’re e-filing your income tax returns? 1. Basic information such as PAN, Aadhar Card details, and current address. 2. All the bank account details held in a financial year. 3. Income proofs like current salary details, income from investments (like FDs, savings bank account) etc. 4. All the deductions claimed under Section 80 or Chapter VI-A. 5. Tax payment details such as TDS and advance tax payments.