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Income Tax Calculator

For every individual, Income tax saving is an important part of financial planning. Savings on income 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. Use our Income tax calculator to calculate your income tax liability/tax estimates as well as your income tax refund.

Calculate Tax Estimation for Year 2019-20

  • Proceed
Annual Income
Rs.
80C Declaration
80D Mediclaim
24B Home Loan (Interest)
Home Rent Allowance
  • Rs.
  • Rs.
  • Rs.
  • Rs.
  • Tax Savings possible at Policybazaar
  • Tax Slab
  • Slab Income
  • Tax Rate
  • Tax Amount
  • Tax on Total Income
  • Education Cess
  • Tax Payable

What is Income Tax calculator?

Income tax calculator is an online tool, which is specifically designed to help the taxpayers with their basic tax calculations. With the help of income tax calculator an individual can calculate their income tax liability in a contemporary and convenient way. There are various insurance aggregators and financial institutions that provide income tax calculators on their website. One can use these income tax calculators for free in order to determine their income tax.

Income tax planning is a methodology of arranging your financial affairs in a way so that you can save on income taxes in a legal manner. Effective strategies of tax planning can help you have more money to save, invest or spend. Income 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 these benefits 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 income tax, compute your income tax liability, and get the best means to save on taxes.

How to use Income Tax calculator?

Income tax calculator is specially designed tool that enables you to calculate your income tax and your overall tax liability. The Income tax calculator calculates this on the basis of your annual income, applicable income 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 income 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 include income tax computation. 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 income tax 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.

Step 1:

Components involved in Step 1 are: Assessment Year, Category, Gross Taxable Salary, HRA Exemption and Transport Allowance,

Income Calculation:

Assessment Year

2018-2019

Category

Male/Female/Senior Citizen/Super Senior Citizen

Gross Taxable Salary

X

HRA Exemption

Y

Transport Allowance

Z

House Rent Allowance (HRA):

(Considering the final value based on the rent paid and basic computation)

The HRA is decided depending on your basic salary. There are several other factors affecting it, including the city in which you reside. If you’re residing in a metropolitan city, then you are entitled to the HRA equivalent to 50% of your salary, whereas for all other cities the HRA comes out to be 40% of the salary.

The salary is described as the sum of basic pay, dearness allowance (if any), and any other commission. If you’re not getting a dearness allowance or any other commissions, then the HRA will be 40%-50% of your basic pay.

The actual House Rent Allowance will be the least of three provisions mentioned below:

  • The sum of money received as the HRA from your employer
  • Your rent minus 10% of your basic pay
  • 50% of your basic pay if you’re living in a metropolitan city and 40% if you’re residing in a non-metro city.

Transport Allowance:

(Maximum exemption Rs. 19,200)

Step 2:

Components involved in Step 2 are: Medical Insurance Premium, Interest Paid on Home Loan u/s80EE (if any), Education Loan u/s 80E (if any), Basic Deductions u/s 80C, Basic Deductions u/s 80CCD and Donations to Charity u/s 80G (if any).

Investment Calculation (IC):

Parameters

Income Tax Section

Maximum Exemption

Insurance Premiums

·         Life Insurance: Under Section 80C

·         Medical Insurance: Under Section  80D

·         Life Insurance: Rs. 1.5 Lakh within the overall limit of the Section 80C

·         Medical Insurance: Rs. 55,000 (below 60 years)* and Rs. 60,000 (60 years and above)

Interest Paid on Home Loans

Section 80EE

Rs. 50,000 per FY on for the first time home buyers.

Education Loan

Section 80E

No limit**

Basic Deductions

Section 80CCD

Rs. 50,000 towards NPS

**The total exemption allowed is the total interest paid during the financial year

Total Taxable Income = X-(Y+Z+ all the investment calculations in the above table)

Being on the verge of reaching the deadline for submitting proofs of your investment, you must be a little pre-occupied seeking the best investments options, depending on the income tax bracketyou fall into. If you Google it, you will find n number of investment options flooding the Internet. But seeking the best deal for yourself is a really difficult task.

Before we move ahead, let us have a look at the Income Tax Slab Rate for AY 2018-19:

 

Calculation of Tax under this Tax Slab:

Particulars

Amount

Basic Pay

X

Non-taxable Income

-

Taxable Income

Nil

Helpful Resource: Income Tax Slab Rate for FY 2019-20 | Income Tax Slab Rate for FY 2020-2021

Income Tax Slab ( FY-2019-2020) VS Income Tax Slab ( FY-2020-2021)

Annual Income (Rs.)

Old Tax Rate

New Tax Rate

Up to Rs. 2. lakhs

Nil

Nil

Rs. 2.5 lakhs to Rs. 5 lakhs

5%

5%

Rs. 5 lakhs to Rs. 7.5 lakhs

20%

10%

Rs. 7.5 lakhs to Rs. 10 lakhs

20%

15%

Rs. 10 lakhs to Rs. 12.5 lakhs

20%

20%

Rs. 12.5 lakhs to Rs. 15 lakhs

30%

25%

Rs. 15 lakhs and above

30%

30%

Income Tax Slab rate for Senior Citizen above 60 Years and below 80 Years

General Category
(Up to the age of 60 years)
Income Tax
Up to Rs. 2,50,000 Nil
Rs. 2.5 Lakhs-Rs. 5 Lakhs 5%
Rs. 5 Lakhs-Rs. 10 Lakhs 20%
More thanRs. 10 Lakhs 30%

Income Tax Slab rate for Senior Citizen above 60 Years and below 80 Years

Senior Citizen
(60 to 80 years)
Income Tax
Up to Rs. 3,00,000 Nil
Rs. 3 Lakhs -Rs. 5 Lakhs 5%
Rs. 5 Lakhs -Rs. 10 Lakh 20%
More thanRs. 10 Lakhs 30%

Income Tax Slab rate for Senior Citizen above 80 Years

Superior Senior Citizens
(Above 80 years)
Income Tax
Up to Rs. 5,00,000 Nil
Rs. 5 Lakhs -Rs. 10 Lakhs 20%
More thanRs. 10 Lakhs 30%

10% surcharge for incomes between Rs. 50,00,000 and Rs. 1 crore along with marginal relief
15% surcharge for the income above Rs. 1 crores along with marginal relief
# Rebate up to Rs. 2,500 for a taxable income up to Rs. 3.5 lakh
# Education as well as higher education cess of 3%

# - for special cases

Now, let’s see where you should invest your money to save tax depending on the different tax slabs.

Tax Slab 1: Taxable Income up to Rs. 2.5 Lakh:

Calculation of Tax under this Tax Slab:

Particulars Amount
Basic Pay X
Non-taxable Income -
Taxable Income Nil

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 income 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 income 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.

What are the Different Taxable Heads of Income?

Income taxes are levied depending on the source of Income. Following are the five main income heads from which taxes are deducted:

  1. Income from Salaries - Taxable income that all employees receive from their employers, is categorized under this head. As per section 192 of the Income Tax Act, the employer will withhold taxes if the employees do not come within the taxable bracket. All about tax deductions and the net paid income are detailed in Form 16 that must be provided by the employer to the employee.
  2. Income from Capital Gains - Capital gains taxation applies to earnings from sale of capital assets held by the tax assessee. Capital assets refer to the properties such as buildings, lands, bonds, equities, debentures, and jewelleries etc. Taxes are levied on the income of the assessee when such properties are sold.
  3. Income on House Property - Income Tax is levied on house property, if the house is given out on rent by the owner. However, under this head, the property cannot be used for business or professional purposes.
  4. Income (profits) from Business - As per section 30 to 43D of the Income Tax Act, the profits earned from businesses or by providing professional services are considered taxable as per applicable rates. This income head is also known as “Profits and Gains of Business or Profession”.
  5. Income from Other Sources - Income from any sources other than the four listed above, are categorized under this head. Some specific income coming under this head is listed below:
  • Lottery/horse race winnings
  • Income from dividends
  • Pension received after the pensioner’s death.
  • Rental income (other than house properties)
  • Gifts received
  • Interest on government securities, debentures and bonds.

What are Income Tax Returns?

Every individual, who has a source of income, regular or irregular, is legally required to file their income tax returns. Even if your income is below the Taxable bracket, you should file your income tax returns. There are prescribed forms through which the income earned by a person and the income tax paid thereon are informed to the Income Tax Authority. The following table shows different forms prescribed for different classes of taxpayers.

ITR Form 1

Any person who receives regular salary or pension or has an income from residential property or other sources.

ITR Form 2

This form is for those who are come under the category of Hindu Undivided Families and have income from any sources other than Profits gained from business and profession.

ITR Form 3

This form is for the Hindu Undivided Families whose income fall under the head of Profits and Gains of Business or Profession.

ITR Form 4S

This form, also known as SUGAM, is applicable to HUFs(Hindu Undivided Families) and individuals opting for SUGAM taxation scheme as per section 44 AD/ AE

ITR Form 4

This form is applicable to Hindu Undivided Families and individuals who are professionals or proprietors

ITR Form 5

This form is applicable for LLPs, Firms, BOIs, AOPs, artificial judiciary persons and local authorities.

ITR Form 6

This form is applicable to companies that claim no exemptions as per section 11 of the Income tax Act.

ITR Form 7

This form is applicable to the persons who are required to file returns as per Sections 139(4A), 139 (4D), 139 (4C), 139(4B)

ITR Form V

ITR V is provided to acknowledge that the Income Tax return has been filed.

Disclaimer: Policybazaar does not endorse, rate or recommend any particular insurer or insurance product offered by an insure. Tax benefit is subject to changes in tax laws. *Standard T&C Apply

List of Deductions Included in Income Tax Calculation

After entering your annual income in the Income tax calculator, you are required to enter your investments that can be claimed as income tax 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 income 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 income tax 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 income tax 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 income tax 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 income tax 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.

House Rent Allowance

As per the Income Tax Act, 1961, the amount you pay towards house rent is also eligible as an income tax 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.

Understanding Results from Income Tax calculator

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

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 income 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 your income, and the amount of tax payable. The Income Tax calculator also shows the total tax payable split into 'Income Tax on Total Income' and 'Education Cess'. 

Frequently Asked Questions:

What is Taxable Income?

Taxable income is the amount of money which is used to compute the income tax on individual or a company owes to the government in the given tax year. In simple words we calculate income tax as an individual’s which is subject to income tax. The taxable income of an individual includes wages, salaries, bonuses, commissions and tips among others.  It is important to have proper knowledge of one’s total taxable income as it helps the taxpayers to determine the final payable income tax or refundable tax by applying the tax rates which are applicable and deducting the taxes which has already been paid.

The income tax in India is levied on individuals including HUFs (Hindu Undivided Families), companies, firms, local authorities and body of individuals. Depending on the income earned by each entity, how much tax is imposed varies. The Indian Income Tax Act 1961, governs the tax related to the income. 

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

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?

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 income tax, calculate the tax liability of income and can avail deductions to save on taxes.

What are the details required while using income tax calculator?

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?

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 has to claim income tax refund then e-filing ITR becomes compulsory.

What is gross total income?

The gross total income is described as the total income of the individual from all the income heads as mentioned above.

How TDS on salary is calculated?

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. 

What is the maximum non-taxable limit?

Rs.2.5 lakh is set as the maximum limit of non-taxable income for an individual. However, if you have a total taxable income less than Rs. 5 lakh then you ca also get a rebate of Rs.12, 500 under section 87A of Income tax Act. Thus, an individual earning less than Rs.5 lakh will not require paying income tax from FY 2019-2020.

Does Income Tax Calculator Calculate for TDS?

Answer: No, the income tax calculator does not compute tax deduction at source (TDS). However, it does calculate the tax liability for the assessment year.

What details you required while e-filing the income tax returns?

You will need to submit the basic information like Aadhar card details, PAN Number and current address.

Details of all the bank account help in a financial year.

Details of income from investment (FD, Savings bank account) and income proof ( details of current salary)

All tax deductions claimed U/S 80C or Chapter VI-A of IT Act.

Details of tac payment such as TDS and advance tax payment.  

Why should you use an online tool for income tax calculation?

An online tool for income tax calculation is important as it helps you to assess your taxes on the premise of your income. Moreover, it will also help you to have a better understanding of the benefits in case you choose the new tax regime.

With the new financial year 20202-21 now the taxpayer needs to opt between the new tax regime or the existing tax regime. The new tax regime discontinues deductions and tax exemptions whereas the existing tax regime will continue with exemptions as well as deductions.

This will assist them with seeing how much tax they would need to pay under the old system, which has higher duties however exclusions and deductions, versus the amount they would need to pay in the new system, which has lower burdens yet a level rate with no exceptions and deductions.

This online income tax calculator is accessible on the official website of the income tax branch of the Indian government. There will be a near table that will likewise be shown that shows the distinction in taxes between the two frameworks. To know the taxable income, citizens over all the personal expense chunks can fill in their evaluated pay every year from all sources just as all the deductions and exceptions that they are qualified for. This will assist them with understanding, which charge framework might be better for them over the long haul.

How to calculate income tax for FY 2020-21?

To use the income tax calculator for FY 2020-21, follow the steps mentioned below:

  • Choose the year for, which you are looking forward to calculating your income tax.
  • In India, the tax liability depends upon the age group you belong. Therefore, make the selection accordingly.
  • Now, after making the selection. You need to provide the information on your taxable salary, which implies the salary you receive post various deductions such as the standard deduction, HRAM, LRA, and so forth. This should be done if you wish to know the tax liability within the slab of the old tax. If you wish to understand your tax liability within the new tax regime, you should simply provide the salary information without any exemptions.
  • Besides, other important information apart from the taxable salary, you would need to provide other subtleties such as the rental income, interest income, and home loan interest paid or for any self-occupied property.
  • Moving ahead, if you are looking forward to calculating tax within the old tax slab then you need to provide about the tax savings investments, which fall under Section 80TTA, 80E, 80D, 80C and 80G.
  • Now, click on the calculate tab and there you go with the tax liability. You will also be able to see a comparison of the old tax slab and the new tax regime.

How is income tax calculated in India?

The income tax in India is calculated on the premise of the tax and rates, which is defined by the Ministry of Finance. These announcements are made every year during the Union Budget meet. You can calculate your income tax using an online income tax calculator tool.

What are the takeaways for the income tax in India under union budget 2020?

Some of the key takeaways for the income tax under union budget 2020 are listed below:

  • The government proposed another new tax regime within Section 115BAC that contains a critical amend in the tax slab rates. The taxpayers have been furnished with an alternative whether they need to pay taxes as indicated by the new regime or on the off chance that they need to keep paying the taxes as per the current regime. Be that as it may, a couple of citizens will most likely be unable to switch back to the current slab once they pick to follow the new regime.
  • Within Section 80EEA, the extra derivation of Rs 1.5 lakh for the paid interest on home loans will currently take into consideration the loans endorsed until the 31st of March 2021.
  • On account of new companies specifically, when it comes to the startups, the employees having Employee Stock Option Plans (ESOPs) may concede paying taxes for five years from the hour of activity until they leave the startup, or until they sell their shares, whatever is prior.

Is there any change in the income tax slab after budget 2020?

Primarily, when it comes to the existing tax slab there has been no change. Although, with a new tax regime there are deductions and exemptions, which will be taxed at the tax rates however reduced.

The below grid consists of the new tax regime and the applicable income tax slab rates:

The Slab Rates

Tax Rate

For Up to Rs 2.5 lakh

Nil

Rs 2.5 lakh to Rs 5 lakh

5%

Rs 5 lakh to Rs 7.5 lakh

10%

Rs 7.5 lakh to Rs 10 lakh

15%

Rs 10 lakh to Rs 12.5 lakh

20%

Rs 12.5 lakh to Rs 15 lakh

25%

Rs 15 lakh and more

30%


Besides, in case you opt for the new tax regime does not miss on the following points:

  • An alternative to being practised at the latest the due date of recording return of income for the year 2021-22.
  • On the off chance that a taxpayer has a business pay and practised the choice, he/she can pull back from the choice just a single time. A business taxpayer pulling back from the discretionary tax regime needs to follow the standard income tax slabs.

How to calculate income tax for the salaried person?

The ideal way to calculate the income tax is to use an online income tax calculator. Let us try to understand the income tax for a salaried person through an example of Mrs Mehra lives in a metro city and her house rent is Rs 40,000

Basic Salary: Rs 1 lakh/ month

HRA: Rs 50,000

Special Allowance: Rs 21,000/ month

LTA: Rs 20,000 yearly

The below grid shows  income tax calculation as per the new regime and the old regime:

Nature

Amount

Exemption/Deduction

Old Regime Tax

New Regime Tax

Basic Salary

Rs 12 lakh

--

Rs 12 lakh

Rs 12 lakh

Special Allowance

Rs 2.52 lakh

--

Rs 2.52 lakh

Rs 2.52 lakh

HRA

Rs 6 lakh

Rs 3.6 lakh

Rs 2.4 lakh

Rs 6 lakh

LTA

Rs 20,000

Rs 12,000 (Submitted Bills)

Rs 8,000

Rs 20,000

Standard Deduction

--

Rs 50,000

Rs 50,000

--

Income from the Salary (Gross Total)

 

 

Rs 16, 50,000

Rs 20, 72,000