How to use the Income Tax Calculator?
The income tax calculator is an easy to use online tool which provides you an estimation of the taxable income and tax payable once you provide the necessary details. The steps to use the tool are as given below –
- Choose your age bracket. This determines your applicable tax band
- Enter your annual salary. You can include the total salary inclusive of all bonuses and variable components
- Once you enter these details, subsequent fields open up where you can enter your investment details
- Enter your investment amount under section 80C and 80CCD(1B)
- Enter your medical insurance premium u/s 80D, if you have a health insurance policy
- If you live in a rented property, enter your HRA exemption. You can calculate your HRA exemption here
- If you have a home loan you’re paying back, enter the interest paid, as the same is eligible for deduction from taxable income
- If you have an educational loan you’re paying back, enter the interest paid, as the same is eligible for deduction from taxable income
1) How is income tax calculated? Income tax is calculated on the basis of the tax slab. Your taxable income is worked out after making relevant deductions, other taxes that you may have already paid (Advance Tax), and tax deducted at source (TDS), the resultant taxable income will be taxed at the slab rate that is applicable.
- Male/Female
- Income Tax Rate
- Upto Rs. 2,50,000 Nil.
- Rs. 2,50,001 to Rs. 5,00,000 5%
- Rs. 5,00,001 to Rs. 10,00,000 Rs. 12,500 + 20% of Income exceeding Rs. 500,000.
- Above Rs. 10,00,000 Rs. 1,12,500 + 30% of Income exceeding of Rs 10,00,000.
- Senior citizen
- Income Tax Rate
- Upto Rs.3,00,000 Nil.
- Rs. 3,00,001 to Rs. 5,00,000 5%
- Rs. 5,00,001 to Rs. 10,00,000 Rs.10,000 + 20% of Income exceeding Rs. 500,000.
- Above Rs. 10,00,000 Rs. 1,10,000 + 30% of Income exceeding of Rs 10,00,000.
- Very senior citizen
- Income Tax Rate
- Upto Rs. 5,00,000 Nil.
- Rs. 5,00,001 to Rs. 10,00,000 20%
- Above Rs. 10,00,000 Rs. 1,00,000 + 30% of Income exceeding of Rs 10,00,000.
The Union Budget 2019-20 has proposed a full tax rebate for income up to Rs. 5 lakhs u/s 87A.2) How much tax should I pay on my salary? The income tax on your salary will be calculated depending on the tax slab. The taxable income will be worked out after making applicable deductions if any. If you invest in life insurance, you can claim a deduction from taxable income of life insurance premium paid up to Rs. 1.5 lakhs. Section 80C also offers deduction from taxable income for investments in PPF (Public Provident Fund), NSC (National Savings Certificate), and other instruments along with home loan principal repayment. Additionally, if you invest in health insurance, you can get deductions up to Rs. 25,000 under Section 80D for yourself and your family and up to Rs. 25,000 (Rs. 50,000 if the age of insured is 60 or above) for your parents. You can also get a deduction of home loan interest up to Rs. 2 lakh under Section 24. These are ways you can consider to lower your overall tax outgo.3) Which income is not taxable in India? Incomes mentioned under section 10 of The Income Tax act 1961 are not taxable in India4) What is the maximum non-taxable income limit? Income up to Rs. 2.5 lakh does not attract any taxes. Further, u/s 87A person gets a full tax rebate if the income of a person is less than Rs. 5 Lacs5) Does everyone have to file their income tax returns? If your income is below the taxable threshold of Rs. 2.5 lakhs currently, it is not compulsory to file your income tax return. However, if you have a PAN (Permanent Account Number) card and an income that falls below the taxable threshold, experts advise the filing of your ITR with a NIL return. This is to show the IT department that you did not have any income that was taxable for a specific year and hence, did not pay your taxes for the same. This will help you immensely in the future. Also, if you are an Indian resident with investments/assets outside India, you have to file returns even if your overall income falls below the taxable threshold. You will have to file your tax returns if you are eligible to claim refunds on any taxes that you may have paid in advance.
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