Income Tax Calculator - Calculate Income Tax for FY 2022-23 & AY 2023-24

Detailed breakdown of yourincome tax

Particulars	Amount Entered	Amount Considered
Income from Salary (A)	₹	₹
Exemptions (B)	₹	₹
Income from Other Sources (C)	₹	₹
GROSS TOTAL INCOME (D) = (A) - (B) + (C)		₹
Professional Tax	₹	₹
Standard Deduction		₹
TOTAL DEDUCTIONS (E)		₹
NET TAXABLE AMOUNT (F) = (D) - (E)		₹
TAX ON TAXABLE AMOUNT (G)		₹
Surcharge @% (H)		₹
Education Cess @4% (I)		₹
TOTAL TAX (J) = (G) + (H) + (I)		₹

Key Takeaways

Income tax is a direct tax that is levied on the income of individuals and businesses by the government.

Exemptions on total income tax are typically granted for specific reasons, such as supporting dependents, investing in retirement savings, or promoting economic activities in certain sectors.

Income tax calculators are powerful tools that can help individuals and businesses estimate their tax liability.

Before you start using the salary income tax calculator, you need to have all the relevant information about your income, deductions, and exemptions.

Income tax is an essential part of any country's economic structure. It is a form of tax that governments collect on the income of individuals and organizations. The tax collected is used to fund various public services like healthcare, education, infrastructure, and so on. Income tax is calculated based on the amount of income an individual or organization earns over a given period.

In this article, we will discuss the salary income tax calculator, how it works, and its benefits.

What is Income Tax Calculator?

An income tax calculator is an online tool that helps individuals and organizations calculate their income tax liability. It is an easy and convenient way tocalculate your income taxas it eliminates the need for manual calculations, which can be time-consuming and prone to errors. The income tax calculator takes into account various factors like income, deductions, and exemptions and calculates the total tax liability accordingly.

How to Use the Online Income Tax Calculator?

Paying income tax is a crucial part of being a responsible citizen. However, it can be a daunting task to calculate your income tax liability, especially if you have multiple sources of income or various deductions and exemptions. Fortunately, the internet has made it easier than ever to calculate your income tax liability using an online income tax calculator.

Read ahead to go through a step-by-step guide on how to use an online income tax calculator.

Step

Gather all relevant information

Before you start using the salary income tax calculator, you need to have all the relevant information about your income, deductions, and exemptions. Make sure you have yourForm 16(issued by your employer),Form 26AS(tax credit statement), and other income-related documents such as bank statements, rent receipts, and investment proofs.

Step

Find a reliable income tax calculator

There are many online income tax calculators available, but you need to choose a reliable one. You can use the income tax calculator provided by the Income Tax Department of India on their official website or any other trusted tax calculator website.

Step

Choose the correct assessment year

Make sure you choose the correct assessment year for which you want to calculate your income tax liability. The assessment year is the year in which you file your tax return, and it is always one year ahead of the financial year.

Step

Enter your income details

Enter your income details in the income tax calculator. You need to enter your total income from all sources, such as salary, interest income, rental income, and capital gains. If you have any deductions, such as investments under Section80Cor80D, you can enter them in the deductions section.

Step

Enter other details

Apart from income and deductions, you need to enter other details such as your age, gender, and residential status. If you have paid any advance tax or self-assessment tax, you can enter those details as well.

Step

Calculate your tax liability

After entering all the details, click on the calculate button. The income tax calculator will automatically calculate your tax liability for the selected assessment year. It will also show you the amount of tax payable and the amount of tax refundable.

Step

Save and print the results

You can save and print the results of the income tax calculator for future reference. The results will show you the tax liability for each income slab, including the cess and surcharge, if applicable.

How to Understand Income Tax Slabs?

Income tax is adirect taxthat is levied on the income of individuals and businesses by the government. The tax is calculated based on the income earned by an individual in a financial year. Understanding income tax slabs is crucial as it determines the tax liability of an individual. Most importantly, the basic exemption limit has increased to ₹3 lakh from ₹2.5 lakh. The number of income tax slabs has been reduced from 6 to five.

Let’s now understand some jargon related to income tax slabs.

Income Tax Slabs

Income tax slabsare the categories in which the government divides the taxable income and applies different tax rates.

Gross Total Income

Gross total income is the total income an individual earns in a financial year from all sources, including salary, business, profession, house property, capital gains, and other sources.

Taxable Income

Taxable income is the income on which an individual is liable to pay tax after claiming deductions and exemptions allowed under the Income Tax Act.

Tax Liability

Tax liability is the amount of tax an individual owes to the government based on their taxable income and the tax rates applicable to their income bracket.

Income Tax Slab

Old Regime
Income Tax Slab	Income Tax Rate
Up to ₹ 2,50,000	Nil
₹ 2,50,001 - ₹ 5,00,000	5% above ₹ 2,50,000
₹ 5,00,001 - ₹ 10,00,000	₹ 12,500 + 20% above ₹ 5,00,000
Above ₹ 10,00,000	₹ 1,12,500 + 30% above ₹ 10,00,000

New Regime
Income Tax Slab	Income Tax Rate
Up to ₹ 2,50,000	Nil
₹ 2,50,001 - ₹ 5,00,000	5% above ₹ 2,50,000
₹ 5,00,001 - ₹ 7,50,000	₹ 12,500 + 10% above ₹ 5,00,000
₹ 7,50,001 - ₹ 10,00,000	₹ 37,500 + 15% above ₹ 7,50,000
₹ 10,00,001 - ₹ 12,50,000	₹ 75,000 + 20% above ₹ 10,00,000
₹ 12,50,001 - ₹ 15,00,000	₹ 1,25,500 + 25% above ₹ 12,50,000
Above ₹ 15,00,000	₹ 1,87,500 + 30% above ₹ 15,00,000

Claims on Tax deductions

Section 87A:Income below ₹5 lakhs is eligible for a tax rebate of up to ₹12,500.

Section 80CCD (1B):For exemption of up to ₹2 lakhs for money deposited in the National Pension System (NPS).

Section 80C:It permits a maximum annual deduction from the taxpayer's gross income of ₹1.5 lakh. Both individuals and HUFs are eligible to take advantage of this discount. LLPs, corporations, and partnership firms are not eligible for this deduction.

Section 80D:Up to ₹25,000 tax exemption on Medical Insurance Premium bills. The limit rises to ₹50,000 for senior citizens.

Section 80G:Any donations made to charitable organizations are fully exempt from tax calculations.

Section 80E:Interest on education loan enjoys a 100% tax rebate for up to 8 years.

Section 8OTTA/80TTB:Interest income from savings accounts is eligible for tax waivers of up to ₹10,000. For senior citizens, all forms of interest income up to ₹50,000 are fully waivered from tax calculations under Section 8OTTB.

How to Calculate the Total Income Tax Liability?

Calculating your total income tax liability can be a daunting task, especially if you are not familiar with the tax laws in your country. However, understanding the basics of how income tax works can help make the process a little easier.

Take these steps to calculate your total income tax liability.

Step

Determine your taxable income

The first step in calculating your income tax liability is to determine your taxable income. This is the amount of income that is subject to taxation. Your taxable income is calculated by subtracting all allowable deductions from your gross income. Allowable deductions may include expenses such as mortgage interest, charitable contributions, and certain business expenses.

Step

Calculate your tax liability

Once you have determined your taxable income and tax bracket, you can calculate your tax liability. This is the amount of tax you owe based on your taxable income and tax bracket. The tax liability is calculated by multiplying your taxable income by the tax rate for your tax bracket.

Step

Deduct any tax credits

Tax credits are deductions that are subtracted directly from your tax liability. They can reduce your tax liability or increase your tax refund. Some common tax credits include credits for childcare expenses, education expenses, and renewable energy investments. Deduct any tax credits you may be eligible for from your tax liability.

Step

Calculate your total income tax liability

Your total income tax liability is the amount of tax you owe after deducting any tax credits from your tax liability. This is the final amount of tax you will owe for the tax year. If you have already paid some tax during the year through paycheck withholding or estimated tax payments, subtract that amount from your total tax liability to determine how much you still owe or how much refund you may expect.

Exemptions on Total Income Tax

Taxation is an integral part of any modern economy, providing governments with the necessary revenue to fund public services and infrastructure. However, tax laws often include exemptions and deductions that allow taxpayers to reduce their overall tax liability. One such concept is exemptions on total income tax, which refers to certain exclusions from the total income of a taxpayer, resulting in a lower taxable income and, consequently, a reduced tax liability. Exemptions on total income tax are typically granted for specific reasons, such as supporting dependents, investing in retirement savings, or promoting economic activities in certain sectors. Understanding the intricacies of exemptions on total income tax can help taxpayers optimize their tax planning strategies and potentially reduce their overall tax burden.

Section 80C

This is one of the most popular sections under the Income Tax Act, and it allows individuals to claim a deduction of up to ₹1.5 lakhs on their total income tax. This deduction is available for various investments and expenses, including contributions to a provident fund, life insurance premiums, tuition fees paid for children, and investments in certain specified instruments such asNational Savings Certificate (NSC),Public Provident Fund (PPF), Equity Linked Savings Scheme (ELSS), and so on.

Section 80D

This section allows individuals to claim a deduction of up to ₹25,000 on health insurance premiums paid for themselves, their spouses, and their dependent children. An additional deduction of ₹25,000 is available for health insurance premiums paid for parents, and if the parents are senior citizens, the deduction limit is increased to ₹50,000.

Section 80E

This section allows individuals to claim a deduction on the interest paid on education loans for themselves, their spouses, and their children. The deduction is available for a maximum of eight years or until the loan is fully repaid, whichever is earlier.

Section 80G

This section allows individuals to claim a deduction for donations made to specified charitable organizations. The deduction amount varies based on the type of organization and the amount of donation made.

Wrapping Up

Income tax calculators are powerful tools that can help individuals and businesses estimate their tax liability. They allow for the easy input of income and expenses and quickly calculate the amount of taxes owed or refunded. These calculators are widely available and can be used to plan for tax payments and budget accordingly. However, it is important to note that income tax calculators are not a substitute for professional tax advice.

Tax laws and regulations can be complex and subject to change, and a tax professional can provide valuable guidance and ensure that taxpayers are taking advantage of all available deductions and credits. Ultimately, income tax calculators are a useful resource, but taxpayers should seek the advice of a qualified professional to ensure they are compliant with tax laws and regulations.

FAQs

1What is the maximum non-taxable income limit?

2Does everyone have to file their income tax returns?

3Does the income tax calculator calculate for TDS?

4How can I calculate my Income tax?

5What are the details required when while e-filing the income tax returns?

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Disclaimers

You may avail of tax benefits under Section 80C and Section 10(10D) of Income Tax Act, 1961 subject to conditions as specified in those sections. Tax benefits are subject to change as per tax laws. Customer is advised to take an independent view from tax consultant.

The calculation is generated on the basis of information provided and does not constitute an offer or solicitation for the purpose of purchase or sale of any product. Further customer is the advised to go through the sales brochure before conducting any sale. Ref No : KLI/23-24/E-WEB/467

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