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What is the Income Tax Calculator?

An Income-tax calculator is an online tool that helps to evaluate taxes based on a person’s income once the Union Budget for the year is announced. Individuals falling under the taxable income bracket are liable to pay a specific portion of their net annual income as tax. Income tax can be paid either as tax deducted at source while disbursement of monthly salary, or through the income tax returns portal managed by the Central Board of Direct Taxes (CBDT). The provision for online payment of taxes is to ensure individuals pay their stipulated dues on any earnings generated from other sources.

The IT calculator given on this page is aligned with the updates announced in the Union Budget 2021-22.

How to Use the Online Income Tax Calculator?

Follow the below-given steps to use the tax calculator:

  1. Choose the assessment year for which you want to calculate the tax
  2. In the next field, select your age. As already mentioned, Income tax in India differs based on different age groups.
  3. Next, click on the ‘income field’. Provide the details of your gross salary (monthly or yearly salary paid without any deductions). Also, you have to fill in other details like annual income from other sources such as rental income, annual interest paid on home loan for the self-occupied and let-out property.
  4. Next, enter the details of various deductions, viz. basic deductions u/s under Section 87A, 80C, 80CCD (1B), 80D, 80G, 80E, 80TTA, 80TTB, 80GG. Also, provide the details of interest on an educational loan and on deposits on the savings account.
  5. In the next step, provide the details of HRA exemption such as basic salary, DA, HRA, and total rent paid per annum
  6. Finally, select whether you live in a metro city and hit the calculate button to obtain your tax liability

How to Understand Income Tax Slabs?

The Indian Income-tax works on the basis of a slab system and the tax is levied accordingly on individual taxpayers. Slab implies the different tax rates charged for different income ranges. In other words, the more your income, the more tax you have to pay. These income tax slabs are revised every year during the budget announcement. Again, These slab rates are segregated for different categories of taxpayers. As per the Income-tax of India, there are  three categories of “individual “taxpayers such as:

  • Individuals below 60 years of age including residents and non-residents
  • Resident Senior citizens – 60 to 80 years of age
  • Resident Super senior citizens – more than 80 years of age

How to Calculate the Total Income Tax Liability?

Individuals can determine the total tax expenses through an online income tax calculator. Such tools take into account the following pointers to reflect the actual tax liability of a resident or non-resident Indian at the end of a financial year –

  1. Annual income from salary/profits.
  2. Income from other sources such as investments, rental income, etc.
  3. Tax exemptions applicable, if any.
  4. House rent and transport allowance.

Entering accurate data regarding the above-mentioned pointers will demonstrate the total tax liability of individuals. Minus the taxes already paid through TDS, the remaining can be deposited directly online through the official portal Challan 280. If, in any event, the taxes paid to exceed the total liability, the difference is reimbursed by the government within 30 days of filing for the same.

Taxpayers who file their return after the due date will have to pay interest under 234A and penalty under section 234F. Hence, remembering the due date of filing income tax returns is indispensable. However, keep in mind that the due date varies according to the category of taxpayers. For instance, if you are a salaried individual, usually you must file your income tax returns by the 31st of July of the assessment year.

Income Tax Slabs in India

Income tax slabs show the total tax rate payable by individuals, based on their annual earnings from various sources combined. Income Tax Calculator in India helps determine the tax payable by individuals for the year 2020-21, considers tax rates levied as follows –

For individuals, Hindu undivided families (HUFs), and NRIs (for income generated in India) –

Income Tax Slab Tax Slab Rates for FY 2020-21 as per the New Regime
Rs 0.0 to Rs 2.5 Lakhs NIL
Rs 2.5 lakhs to Rs 3.00 Lakhs 5% (tax rebate u/s 87a is available)
Rs. 3.00 lakhs to Rs 5.00 Lakhs
Rs. 5.00 lakhs to Rs 7.5 Lakhs 10.00%
Rs 7.5 lakhs to Rs 10.00 Lakhs 15.00%
Rs 10.00 lakhs to Rs. 12.50 Lakhs 20.00%
Rs. 12.5 lakhs to Rs. 15.00 Lakhs 25.00%
Above Rs. 15 Lakhs 30.00%

For senior citizens (above 60 years) 

Income Tax Slab Tax Slab Rates for FY 2020-21 as per the New Regime
Rs 0.0 to Rs 2.5 Lakhs Nil
Rs 2.5 lakhs to Rs 3.00 Lakhs 5.00%
Rs. 3.00 lakhs to Rs 5.00 Lakhs 5.00%
Rs. 5.00 lakhs to Rs 7.5 Lakhs 10.00%
Rs 7.5 lakhs to Rs 10.00 Lakhs 15.00%
Rs 10.00 lakhs to Rs. 12.50 Lakhs 20.00%
Rs. 12.5 lakhs to Rs. 15.00 Lakhs 25.00%
Above Rs. 15 Lakhs 30.00%

For super senior citizens (above 80 years) 

Income Tax Slab Tax Slab Rates for FY 2020-21 as per the New Regime
Up to Rs. 2,50,000 Nil
Rs. 2,50,001 to Rs. 5,00,000 5.00%
Rs. 5,00,001 to Rs. 7,50,000 10.00%
Rs. 7,50,001 to Rs. 10,00,000 15.00%
Rs. 10,00,001 to Rs. 12,50,000 20.00%
Rs. 12,50,001 to Rs. 15,00,000 25.00%
Above Rs. 15,00,000 30.00%

These rates are applicable for the assessment year 2021-22, during which taxes for the year 2020-21 are determined. Additionally, health and education cess at 4% are levied on the total tax rate, above the total amount payable. A surcharge is also applied on total taxable income at the following rates –

  • 10% of total income exceeding Rs. 50 lakh, but below Rs. 1 crore.
  • 15% of income exceeding Rs. 1 crore.

However, income tax calculator 2020 takes into account the various deductions/exemptions under the Income Tax Act of 1961. Individuals can go through their TDS certificates to determine the taxes already paid. Employees are often issued Form 16 from their respective employers, showcasing total salary and taxes deducted thereon. However, income accrued from other sources, such as interest income from various investments, rental income if any, royalties, etc. have to be incorporated in the calculation of total tax liability.

Exemptions on Total Income Tax

  • Section 87A – Income below Rs. 5 lakh is eligible for a tax rebate of up to Rs. 12,500.
  • Section 80CCD (1B) – Tax exemption of up to Rs. 2 lakh for money deposited in the national pension system.
  • Section 80D – Up to Rs. 25,000 tax exemption on medical insurance premium bills. The limit rises to Rs. 50,000 for senior citizens.
  • Section 80G – Any donations made to charitable organisations is fully exempt from tax calculations.
  • Section 80E – Interest on education loan enjoys a 100% tax rebate for up to 8 years.
  • Section 80TTA/80TTB – Interest income from savings accounts is eligible for tax waivers up to Rs. 10,000. For senior citizens, all forms of interest income up to Rs. 50,000 are fully waivered from tax calculations, under Section 80TTB.
  • Section 80GG – Tax exemption on income spent towards paying house rent (house rent allowance.)

Keeping all such expenditures in mind, individuals can use an online tax calculator available on the official website of Groww.

Income Tax calculator – Frequently Asked Questions

Que. How much tax will be deducted from my salary?

Ans. The tax will be levied based on the income slab you belong to. You can refer to the income tax slabs and rates table given in the article to get more clarity on this.

Que. How can I calculate my Income tax?

Ans. The salary income is comprised of the Basic salary + HRA + Special Allowance + Transport Allowance + any other allowance. Some of the components of the salary are exempt from tax, like reimbursement of the telephone bills, leave travel allowance etc. If you have rented a place and receive HRA, you can also claim an exemption on HRA.

Apart from these deductions, there is a standard deduction of Rs 40,000 which was introduced in the budget 2018 which was later increased to Rs 50,000 in the budget 2019.

Que. Does everyone have to file their income tax returns?

Ans. No, if your income is below the basic exemption limit then you are not required to file income tax returns. However, those with income less than Rs 2.5L and who still want to claim an income tax refund can only claim the refund by filing an ITR. Otherwise, if it’s above the basic exemption limit, it is mandatory to file income tax returns.

Que. What are the details requires when while e-filing the income tax returns?

Ans. The following details are needed during the e-filing of the income tax returns

  1. PAN no., Aadhar Card details, and current address.
  2. All the bank account details held in that particular financial year.
  3. Income proofs like the existing salary details, income generated 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.

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