Old And New Tax Rate Calculator
The Government of India mandatorily deducts income tax from both salaried and self-employed individuals. Your monthly salary as a salaried individual is made up of several components, including your base salary, health insurance, transportation allowance, and other special allowances. There aren't many of these tax-free benefits. To determine your gross taxable income and potential tax deductions, you will thus require an online income tax calculator. You risk paying too much in taxes if you don't know how to compute them.
First, figure out your gross income
In the income tax calculator window, enter your whole income, including any allowances. You earn significant exemptions on various pay components, such as Leave Travel Allowance (LTA) and House Rent Allowance (HRA). Subtract these expenses from your yearly gross pay.
Generally speaking, the House Rent Allowance is the lowest of the following figures:
Employer-provided housing allowance.
Actual rent paid less than 10 percent of basic+DA monthly salary.
50% of the base pay in a metropolis.
40% of the base pay in a non-metropolitan city
In the online income tax calculator, select the option with the lowest value. Additionally, for the fiscal years 2021–22 and 2022–23, you are eligible to deduct Rs. 50,000 from your yearly income as a Standard Deduction. The HRA and Standard deduction amounts can be computed and subtracted using an income tax calculator.
You must declare income from several additional sources, including capital gains and deposits, after using an income tax calculator to make all required deductions. Your total gross income is the resultant amount.
In Step Two Compute Net Taxable Income
Under Section 80C of the Income Tax Act of 1961, a number of instruments provide tax-saving advantages to further reduce your taxable income. You may list and gather the specifics of these tax-saving investment possibilities with the aid of the income tax calculator . Typical tax-saving tools consist of:
Generally speaking, the House Rent Allowance is the lowest of the following figures:
- Life insurance
- Plans for Unit-Linked Insurance (ULIPs)
- Mutual funds
- Schemes for Equity-Linked Savings (ELSS)
- PPF, or the Public Provident Fund
- NPS, or the National Pension System
Let's examine the various tax-saving features that may be found in an online income tax calculator.
Section 80C
Section 80C allows for tax deductions of up to Rs. 1.5 lakh for both individuals and HUF members. Public Provident Fund (PPF), Life Insurance plans, Employee Provident Fund (EPF), Home Loan Repayment, National Saving Certificates (NSC), and Equity Linked Savings Scheme (ELSS) are popular tax-saving options under this section.
All of these deductions are included in an online income tax calculator, which makes it simple for you to determine your total taxable income.
Section 80CCD (1)
Under this section, the NPS donation is deductible from taxes. An income tax calculator is the ideal online tool if you wish to know the figures in advance.
According to section 80 CCE, it is 10% of a salaried employee's gross pay up to a maximum of Rs 1.5 lakh.
Section 80CCD (1B)
In addition to the Rs 50,000 tax reduction offered under Section 80C, both salaried and self-employed people are eligible for an additional Rs 50,000 tax deduction under this section. Thus, Section 80C and Section 80CCD (1B) can save you up to Rs. 2 lakhs. Using an income tax calculator to determine your tax burden, you can quickly submit your NPS contributions.
Section 80D
For both individuals and HUF members, the amount paid for health insurance premiums is tax deductible under Section 80D. The following parameters are used to determine the maximum amount of deductions that can be claimed:
- Deduction of Rs 25,000 for spouse and kid health insurance, as well as self-health insurance
- An extra Rs 25,000 is deducted from parents' insurance who are under 60.
- An extra Rs 50,000 is deducted when the person and their parents are both older than 60.
Under this section, online payments are typically accepted. You can use an income tax calculator to estimate your tax liability and disclose the entire amount of health insurance premiums paid in a given year. The entire deduction cannot be more than Rs 1 lakh.
Section 80DD
HUF and individuals who are eligible to deduct medical expenses for a dependant disabled family member are also covered by this section. Deductions of up to Rs 1.25 lakh are possible, contingent on the individual's impairment.
Using an income tax calculator , you can enter the specifics of your expenses under this section.
Section 80E
The section that only applies to people includes a deduction for interest paid on student loans. The section 80E deduction is only available for eight years.
Step 3: Tax Slab Based on Net Taxable Income
Using an Excel Sheet income tax calculator you can determine your net taxable income by deducting all eligible deductions from your total annual income. You must pay taxes based on the tax slab rates that are in effect at the time of writing. To complete the computations according to the relevant tax band, you can alternatively use an online income tax calculator.
Step 4: Do the Tax Calculation
Tax computation may seem laborious to you. The Income Tax India website offers an online income tax calculator to help streamline the procedure.
Step 5: Combine all of your net taxes
The final step is to combine the net tax due by subtracting all relevant exemptions and deductions based on your tax-saving investments. This stage also requires you to determine whether you are eligible for the Section 87A reimbursement.
Section 87A Rebate:
One kind of benefit that the Indian government provides to people whose net taxable income is less than Rs. 5 lakhs is a tax rebate from the old tax regime. You can therefore claim an extra refund of up to Rs. 12,500 on the total tax due if your total taxable income is less than Rs. 5 lakhs (before adding health and education cess of 4% into the tax calculated in the previous stage).
You can deduct the previously indicated tax refund, if applicable, because you used an income tax calculator to determine your net taxable income.
In another scenario, you will not be eligible for the tax refund under this section if your net taxable income is more than Rs 5 lakhs.
You can determine your net taxable income—the amount on which you must pay taxes—with the aid of an online income tax calculator. Using an online income tax calculator might help you obtain correct figures even though the procedure may appear complex.
Finding appropriate ways to save taxes through different deductions to lower tax liabilities is the primary goal of an income tax calculator.
