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Income Tax Calculator

All of us wish to save on taxes as it will help save money. Savings on taxes is one method which yields good results in having an efficient financial plan. Several categories and areas help save tax and once such area is Insurance.You can save on tax by purchasing any of the Life Insurance plans be it Term Insurance, Whole Life, and ULIP (Unit Linked Insurance Plans), to name a few. You can use the premiums paid by you for availing tax deduction on any of these policies, therefore, boosting your tax saving options.

Use our income tax calculator to calculate your income tax liability as well as your income tax refund:

Please fill details to start your tax calculator

  • Proceed
Annual Income
Rs.

80C Declaration

80D Mediclaim

24B Home Loan (Interest)

Home Rent Allowance

  • Rs.
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  • Rs.
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  • Tax Savings possible at Policybazaar
  • Tax Slab
  • Slab Income
  • Tax Rate
  • Tax Amount
  • Tax on Total Income
  • Education Cess
  • Tax Payable

Financial planning is very essential for an individual as it helps to maintain consistent savings ratio even in this world of constant inflation. One can save money with the help of saving on taxes. Savings on taxes is one method which yields good results in having an efficient financial plan. Everyone these days are aware of income tax and their liability towards taxes, and due to this reason people remain very keen to calculate their income tax. Below is the brief of how can an individual calculate their tax liability and which tools can they use to calculate it. Income tax calculator is one such tool with the help of which an individual can calculate their income tax liability. Income tax calculators take every income head into account and they require some information to be filled in by people calculating their tax. It takes various deductions available to an individual and above calculations; it provides knowledge about certain limits which can prove very beneficial in the tax estimation scenario. One can calculate their income tax refund with the help of using income tax calculator as well.

Online Income Tax Calculator

Income tax calculators are available online these days which is the contemporary and convenient way to calculate your income tax liability. There are various insurance aggregators and financial institutions that provide income tax calculators on their website. One can use these calculators for free in order to determine their income tax.

Tax planning is a methodology of arranging your financial affairs in a way so that you can save on taxes in a legal manner. Effective strategies of tax planning can help you have more money to save, invest or spend. Tax planning through Income Tax Calculator enables full advantage of deductions, exemptions, reliefs and rebates, and thereby reduces your tax liability.

Government allows such deductions with an intention to encourage investment and mobilization of funds, and ultimately benefit the society and the economy at large and we have included this benefit in our Income Tax Calculator.

Tax Planning through Income Tax Calculator is done with the following objectives:

  • To claim deductions under Section 80C to Section 80U,
  • To reduce the tax liability and pay lower amounts of tax,
  • To use legal methods for reducing the tax liability and not evade tax.
  • Investing in instruments that are capable of yielding good returns and eligible for tax exemption or deduction.

By using our Income Tax Calculator, you can calculate your taxable income, compute your income tax liability, and get the best means to save on taxes.

Income Tax Calculator

Income Tax Calculator is specially designed tool that enables you to calculate your taxable income and your overall tax liability. The Income Tax Calculator calculates this on the basis of your annual income, applicable tax slab, and the deductions you are eligible to claim under Section 80 C and Section 80D.. The Income Tax Calculator further provides you with investment options that suit your financial portfolio, their benefits, and their tax saving ability.

Every year, the salaried employees are required to calculate income tax to be paid to the government on the total income earned during the financial year. Under the head of income from salaries, any income earned by an individual is taxable. Paying higher tax disappoints everyone, so in order to save on taxes it is very important to know that under which salary slab one falls. In order to save on taxes the taxpayers are required to submit the investment declaration so that the employer can consider that before deducting the taxes from the salary of the employee's.

In order to calculate income tax and to avail tax exemption, the taxpayers can take help of income tax calculator. Income tax calculator is a tool that helps the individuals to compute the taxable income and the overall tax liability. The income tax calculator computes tax on basis of the yearly income, applicable tax slab and the claims eligible for tax deduction under section 80c and 80D of Income Tax Act 1961.

How to Calculate Income Tax?

According to the income tax act 1961, the gross income is distributed in 5 different categories i.e. (a) Income from salary (b) Income from profession and business (c) income from house property (d) income from other sources (e) income from capital gain. Moreover, one can also gain different tax benefit as house rent allowance (HRA), LTA (leave Travel Allowance) and investment claims made under section 80C and 80D of Income Tax Act. Let’s take a look at how to calculate income tax.

Let’s assume that the monthly salary break up of an individual is as follows:

Head Amount (Rs)
Basic Rs.40,000
HRA Rs.20,000
Special Allowance Rs.10,000
Transport Allowance Rs.1600
Medical Reimbursement Rs.15,000 (yearly)
LTA (leave Travel Allowance) Rs.30,000 ( yearly)
Communication Reimbursement Rs.5,000 ( Yearly)

If the taxpayer is living on rent paying per month Rs.20,000 . Besides this, if he/she also receives Rs.4,200 interest on savings bank account and Rs.5,000 on banks FD. They have also made tax saving investment like PPF of Rs.1lakh, LIC of Rs.5000 and paying health insurance premium of Rs.10,000 then the income tax calculated for the year will be:

Income Tax Calculations for the Year

According to the above mentioned table, the tax liability for FY 2017-18 and 2018-19 will be calculated as.Income Tax Liability Calculation for FY 2017-18 & 2018-19

Income from Salary

Head Amount (in RS) Yearly (in Rs) Taxable Amt(FY 2017-18) Taxable Amt(FY2018-19) Remarks
Basic 40,000 4,80,000 4,80,000 4,80,000 Fully Taxable
HRA 20,000 2,40,000 48,000 48,000 HRA Exemption rule
Special Allowance 10,000 1,20,000 1,20,000 1,20,000 Fully Taxable
Communication reimbursement (yearly) 5,000 5,000 X X Exempt on actual bill submission of full amount
Transport Allowance 1,600 19,200 X 19,200 Exempt till FY 2017-18. No submission of bills required
Medical Reimbursement (yearly) 15,000 15,000 X 15,000 Exempt till FY2017-18 on submission of actual bills required
Leave Travel Allowance (yearly) 30,000 30,000 5,000 5,000 Actual Bills submitted of Rs.25,000. Tax exemption is available twice in a block of 4 years. Assuming exemption is taken simultaneously.
Other Allowance (taxable, yearly) X X X X Fully taxable, if any.
Other Allowance (non-taxable, yearly) X X X X Non-taxable if actual bills are submitted, if any
Income from salary chargeable to tax   9,09,200 6,53,000 6,87,200  
Income from house property X X X X  
Income from capital gain X X X X  
Income from business X X X X  
Income from other source X X X X  
Interest from saving account 4,200 4,200 4,200 4,200 Deductible up to Rs.10,000 under section 80TTA
Interest from fixed deposits 5,000 5,000 5,000 5,000 Fully taxable
Total income chargeable to tax X X 6,62,200 6,96,400  
Deduction under section 80C X X X X Max Tax break available of Rs.1.5lakh
PPF X X 1,00,000 1,00,000  
LIC Premium X X 5000 5000  
Section 80D X X X X Max Limit of Rs.25,000for self, spouse and children
Health Insurance Premium X X 10,000 10,000  
Standard Deduction X X X 40,0000 Flat benefit of Rs.40,000 from FY2018-19
Section 80TTA(From FY 2018-19) X X 4,200 4,200 Deductible up to Rs.10,000. Balance will be taxable
Net Income chargeable to tax X X 5,43,000 5,37,200  
Income Tax slabs Tax rates Tax Liability FY2017-18 (Rs.) Tax liability for FY2018-19 (Rs.)
Up to Rs.2.5Lakh Nil X X
Between Rs.2.5lakh to 5 Lakh 5% 12,500 12,500
Between Rs.5lakh to Rs.10lakh 20% 8,600 7,440
Tax liability X 21,100 19,940
Cess X 633 798
Tax to be paid X 21,733 20,738

*For the income tax slab Rs.5lakh- Rs10.lakh, Rs.43,000 will be taxable for financial year 2017-18 and Rs.37,200 for financial year 2018-19 at the rate of 20%.

As 2018 budget has increased from 3%-4%, the cess imposed on tax liability will be higher for financial year 2018-19. If the net taxable income of an individual will be more than Rs.10 lakh then the income will be charges at 30%.

Following are the details you need to enter in this Income Tax Calculator:

Personal Details required in the Income Tax Calculator

  • Name: This field in the Income Tax Calculator requires your name as per your government and financial records.
  • E-mail: In this field of the Income Tax Calculator you are required to enter your E-mail address. Make sure that you enter the correct E-mail address so as to ensure that you receive the reports on your E-mail.
  • Mobile Number: This field in the Income Tax Calculator requires your mobile number for record keeping purposes.
  • Date of Birth: The date of birth you need to enter in this field of the Income Tax Calculator is majorly for record keeping purposes. At the time of buying a policy on the basis of this calculation, you might need to submit documentary proofs supporting the same. Therefore, in order to get the most reliable results, make sure that the date of birth you enter in the Income Tax Calculator is as per your government IDs.
  • Gender: This field of the Income Tax Calculator has been put in place because the tax slabs for men and women in India are different.
  • City: In this column of the Income Tax Calculator you need to select your city from the dropdown menu. The reason why the income tax calculator requires your city is that the tax treatment for House Rent Allowance varies between metro cities and non-metro cities.

Annual Income input field in the Income Tax Calculator

This field in the Income Tax Calculator requires you to input your annual income. However, it is always advisable to consider your net income instead of your gross income. This is because your gross income comprises several fringe benefits that that you receive as a part of your salary from your employer, but, do not reach you as cash or bank balance.

Deductions supported by the Income Tax Calculator

After entering your annual income in the Income Tax Calculator, you are required to enter your investments that can be claimed as deductions under the following:

Section 80C: Section 80C comprises certain instruments, investing in which can save you tax up to Rs. 45,000 per annum; depending on your tax slab. These instruments include equity linked saving scheme (ELSS), term insurance plans, unit-linked insurance plans (ULIPs), public provident fund (PPF), bank fixed deposits (FDs), and National Saving Certificates (NSCs). A maximum of Rs. 1.5 lakh invested in all these instruments together is eligible as a deduction from your gross total income or taxable income. Also, an additional deduction, up to Rs. 50,000, against the amount invested towards new pension scheme (NPS) is available under the section. However, to make the best use of these instruments for claiming deduction under the Income Tax Act, it is essential to know these instruments in detail.

Therefore, this field in the Income Tax Calculator requires a total of all the investments you have made under Section 80C.

Section 80D Mediclaim: Under this section, you can claim deductions equal to the amount spent for medical expenses for self or dependent family members. However, a maximum of Rs. 35,000 can be claimed as a deduction under Section 80D. This amount includes a maximum of Rs. 25,000 for self and dependent family members; and the Rs.25,000 for parents. However, if your parents are above 60 years of age, then the maximum deduction available for them is Rs. 30,000. The benefit under Section 80D is over and above the deduction of Rs. 1.5 lakhs under Section 80C.

There are majorly 4 types of health insurance policies to choose from. These include medical insurance plan, super top-up plan, critical illness plan, and hospitalization plan.

Therefore, this field of the Income Tax Calculator requires a total of the amounts you pay towards the medical insurance of you and your dependent family members within the limit of Rs. 25,000 and Rs. 25,000 (Rs. 30,000 if parents are senior citizens) for your parents.

For example, Rahul claims a deduction a deduction of Rs. 25,000 against the medical expenses of his parents in the Income Tax Calculator. Now, even if he spends Rs. 15,000 on his dependent child’s health, he can claim only 10,000 out of it; because the total limit of deduction is Rs. 35,000.

Home Loan (Section 24B): As per this section, any amount, up to Rs. 2,00,000, which you pay as interest towards a home loan, during that particular financial year, can be claimed as a deduction from your taxable income.

As per the recent changes made in the union budget of 2016-17, you may be eligible for an additional deduction of Rs. 50,000 over the current deduction limit. However, this is applicable only if the loan is sanctioned in 2016-17 or later, total home loan amount does not exceed Rs. 35 lakhs, and the total cost of the new house is equal to or below Rs. 50 lakhs.

Therefore, in this field of the Income Tax Calculator you need to enter the amount of interest you have paid as interest towards your home loan.

Home Rent: As per the Income Tax Act, 1961, the amount you pay towards house rent is also eligible as a deduction from your taxable income. However, the minimum amongst the following three amounts is eligible for the exemption:

  • 1. Actual house rent allowance (HRA) receive
  • 2. Actual rent paid minus 10% of your basic salary
  • 3. 50 % of your basic salary if you live in Mumbai, Delhi, Chennai, or Kolkata and 40 % if you live in a non-metro city.

This amount is over and above the exemptions and deductions under Section 80C, Section 80D, and Section 24B.

Therefore in this field of the Income Tax Calculator you have to mention the minimum amongst the given three amounts. However, this tool allows a maximum of Rs. 1,00,000 to be entered in the field as additional proofs and documentary evidences are required beyond this limit.

Outputs given by the Income Tax Calculator

After you key in all this information, the income tax calculator gives you the following outputs:

Summary

This summary in the Income Tax Calculator depicts your level of income, your level of investment, and your tax liability in the form of a bar graph. The Income Tax Calculator also gives an estimated amount of tax savings possible by investing in instruments available at policybazaar.com.

To further simplify it for you, the Income Tax Calculator also provides a list of available options suitable for your financial portfolio in a tabular format. This table in the Income Tax Calculator represents the kind of investment instrument, benefits of that instrument, tax saving ability of that option, and recommended product belonging to that category of instrument.

Tax Spilt

This tab in the Income Tax Calculator shows the tax slab in which your income falls, the rate of tax applicable to you income, and the amount of tax payable. The Income Tax Calculator also shows the total tax payable split into 'Tax on Total Income' and 'Education Cess'.

Income Tax Calculator-FAQs

What are the different heads under which the income of the taxpayer is classified?

Ans:

Under section 14 of Income Tax Act, the income of a taxpayer is categorized under 5 different heads of income

  • Income from Salary
  • Income from House Property
  • Income from Capital Gains
  • Income from profit and gains of company or business
  • Income from other source

How to use online income tax calculator?

Ans:
Online income tax calculator can be used in a very simple and hassle-free way. There are many different financial advisors and insurance aggregators which offers income tax calculator on their website. With the help of income tax calculator the individual can calculate the taxable income, calculate the tax liability of income and can avail deductions to save on taxes.

What are the details required while using income tax calculator?

Ans:
The details required while using income tax calculator are:
  • Name
  • E-mail ID
  • Mobile Number
  • Date of Birth
  • Gender
  • City

Is it compulsory to E-file Income Tax Return?

Ans:
yes, it is mandatory to e-file income tax return. In case, the annual income of the individual is more than Rs.5lakh or if the taxpayer have to claim tax refund then e-filing ITR becomes compulsory.

What is gross total income?

Ans:
The gross total income is describes as the total income of the individual from all the income heads as mentioned above.

How TDS on salary is calculated?

Ans:
The TDS is computed on the current CTC of the individual which includes different elements like medical allowance, basic salary, dearness allowance, special allowance and more.