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Income Tax Calculator

Income

HRA Exemption

Deductions

 

What is Income Tax?

Taxes in India are categorized as Direct and Indirect Taxes. Income Tax is a direct tax levied on your income or that of an entity. The Government imposes tax on income generated by individuals and businesses within its jurisdiction.

The Income Tax Department functions under the Department of Revenue of the Ministry of Finance and collects this tax. Income Tax is a percentage of your income, paid to the Government, for the smooth functioning of the Nation, to fund infrastructure and pay salaries of citizens employed by the State or Central Governments.

 

5 Main Income Tax Heads

  • Income from salary
  • Income from House Property
  • Income from Profits and Gains of Business and Profession
  • Income from Capital Gains
  • Income from Other Sources
 

1. Income from salary

Income from salary is wages, annuity, advance salary, gratuity, pension, fees, commission, profits, leave encashment, perquisites, annual bonus and transferred balance in a recognized provident fund as well as contribution to employees pension account. This is remuneration received, for services provided based on contract of employment. The amount qualifies for income tax only if there is an employer-employee relationship between payer and payee.

 

What is an allowance?

An allowance is a fixed amount paid by your employer for office related expenses. These allowances are included in your salary and taxed unless exemptions are available.

 

Taxable allowances

  • Dearness Allowance
  • Entertainment Allowance
  • Overtime Allowance
  • Interim Allowance
  • Tiffin Allowance
  • Project Allowance
  • Uniform Allowance
  • Cash Allowance
  • City Compensatory Allowance
  • Warden Allowance
  • Servant Allowance

Partially-Taxable Allowances

  • HRA exempt under Section 10(13A)
  • Fixed medical allowance
  • Transport allowance
  • Special allowance like Children Education Allowance and Children Hostel Allowance

Note : Standard Deduction has replaced transport and medical allowance.

Non-Taxable Allowances

  • Allowance for UN employees.
  • Allowance paid to Government Servants abroad
  • Sumptuary Allowance
  • Compensatory allowances paid to judges.
 

What is House Rent Allowance?

This deduction is the least of the following :

  • Actual HRA received
  • 50% of (basic salary + Dearness Allowance) for those residing in metro cities and 40% for those residing in non-metro cities.
  • Rent paid minus 10% of Salary (Basic + Dearness Allowance).
 

Leave Travel Allowance

Leave Travel Allowance or LTA is offered by your employer to you (employee), who travels on leave from work to cover travel expenses. LTA is a very important component of salary and is tax-free under Section 10(5) of the Income Tax Act.

 

What are perquisites?

Perquisites are a benefit you enjoy because of your job or position.
These are some popular perquisites :

Taxable perquisites :
Rent-free accommodation, supply of gas, electricity and water, professional tax, medical expense reimbursements, salary of servant employed by you, fringe benefits offered by the employer like free meals, gifts exceeding Rs 5,000, club and gym facilities are taxable perquisites.

Exempted perquisites :
Computer or Laptop offered by the Company for official use, Refreshments offered by the employer in office hours, Use of health Club, Sports Club, Interest Free Loans offered by your employer, Employer contribution to your EPF, Free medical and recreational facilities are non-taxable perquisites.

2. Income from House Property

Income from house property includes rent earned from your house property. This rent is chargeable to tax. You may have to pay tax on “deemed rent” in case your property is not let out.

Income from House Property is added to gross total income if it satisfies 3 conditions :

  • You (assessee) must be the owner of the property.
  • The property must be land, house or a building
  • The property can be used for any purpose except running a business/profession.
 

Calculation of income from house property

Types of property

  • Self Occupied :This is property used for your own residential purposes. This property may be occupied by your family, parents/spouse and children. Before FY 2019-20 if you owned more than one self-occupied property, only one of the properties was considered self-occupied. The other property was assumed to be let out. You could choose any of the properties as self-occupied. After FY 2019-20, you can consider 2 houses as self-occupied and the remaining houses as deemed to be let out for income tax purposes.
  • Let out house property :If you rent house property for the whole/part of the year, it’s let out property for income tax purposes.
  • Inherited Property :Inherited Property may be self-occupied or let out based on use.
 

Gross annual value

Gross annual value or GAV is the value at which your property could reasonably be let out from year to year. Gross annual value is the highest among :

  • Rent receivable or received
  • Municipal Valuation
  • Fair Market Value

If your property is not let out (given on rent), the notional rent or deemed rent receivable is taxable. The gross annual value of a self-occupied house is zero. In case of let out property, its rent collected for a house given on rent.

 

Net Annual Value

This is basically the Gross Annual Value – Municipal Taxes Paid.

 

Municipal Taxes Paid

Any taxes which you pay to the Government during the Financial Year on the property you own like house tax is allowed as a deduction from Gross Annual Value or GAV. If you don’t pay taxes on the property, you can’t avail this deduction.

 

Standard Deduction on Income from House Property

You can adjust standard deduction from Net Asset Value.

  • Deduction on Repair and Maintenance : You get 30% of the Net Annual Value as a Standard Deduction towards repair of house property, irrespective of actual expenditure incurred under Section 24 of the Income Tax Act. You get this only for let out property and not for a self-occupied property.
  • Deduction on Home Loan/Interest on Borrowed Capital : In case of let out property, the actual interest you pay on the home loan in the Financial Year is allowed as deduction on house property under Section 24 of the Income Tax Act.

Income From House Property = Net Annual Value – 30% of Net Annual Value – Interest Paid on Home Loan.

 

Calculation of Rental Income from House Property

Let’s say the standard rent of your property is Rs 13,000. The actual rent you receive from the tenant is Rs 15,000.

Gross Annual Value of Property = Higher of expected rent or Actual Rent Received.
This is higher of Rs 13,000 and Rs 15,000.

Gross Annual Value of Property = Rs 15,000 a month or Rs 1,80,000 a year.

Net Annual Value = Gross Annual Value – Municipal Taxes.

Let’s assume that Municipal Taxes which includes property tax, sewerage tax is Rs 10,000 a year and is paid by you (Owner of the Property). Interest paid on home loan is Rs 2,50,000 a year.

Net Annual Value = Rs 1,80,000 – Rs 10,000 = Rs 1,70,000.

Income from house property = Net Annual Value – 30% of Net Annual Value – Interest paid on Home Loan = Rs 1,70,000 – 30% of Rs 1,70,000 – Rs 2,50,000 = - 1,31,000.

You have loss of Rs 1,31,000 on let out property. You can adjust this loss against income from house property in ITR to reduce your income tax liability.

 
Income from House Property Amount (Rs)
Total Annual Rent xxxxx
Less: Municipal Taxes xxxxx
Net Annual Value (NAV) xxxxx
Less: Deduction under Section 24  
Standard Deduction @ 30% xxx
Interest on Borrowed Capital xxx
Income From House Property xxxxx
 

Self Occupied Property

For a self occupied property, the Gross Annual Value or GAV is 0. Net Annual Value or NAV is 0. (Municipal Taxes cannot be deducted from Self-Occupied Property). Standard Deduction on repairs/maintenance of house property is not allowed. You only get deduction on interest paid towards home loan up to Rs 2 Lakhs a year under Section 24.

Income from house property = -2,00,000.

You have loss of Rs 2,00,000 on self-occupied property. You can adjust this loss against income from house property in ITR to reduce your income tax liability.

 

Tax Deduction on Home Loan

    Tax deduction on home loan principal repayment :

  • You can claim deductions on Principal Repayment towards Home Loan up to Rs 1,50,000 a year under Section 80C of the Income Tax Act.
  • Stamp Duty and Registration Charges are allowed as a deduction under Section 80C.
  • The home loan availed must be used for construction or purchase of the house.
  • You must not sell the property within 5 years from the time of possession. Doing so adds back the deduction to your taxable income in the year you sell the house.
 

    Tax deduction on home loan interest repayment :

  • You can claim a deduction up to Rs 2 Lakhs a year on home loan interest paid under Section 24 for self-occupied property.
  • If you rent out the property, you get the entire home loan interest as a deduction.
 

    When is the deduction limited to Rs 30,000 instead of Rs 2,00,000?

  • You have availed the loan before April 1st 1999.
  • You have not completed the purchase/construction of the house within 5 years from the end of the FY in which the home loan was availed. If you have availed the home loan on 30th April 2016, the construction of the property must be completed by March 31st 2022.
 

Tax deduction on loan taken before construction of house is complete

You get deduction on home loan interest only after the construction of house is complete. The time period from which you borrow the money, till construction is complete is called pre-construction period. The interest you pay during the construction period can be claimed as tax deduction in 5 equal instalments after construction of house is complete.

 

Section 80EE

First-time home buyers get Section 80EE deduction on home loan interest up to Rs 50,000 during a financial year. You get this deduction over and above Section 80C and Section 24.
Some of the conditions are:

  • Home Loan must be sanctioned from a Bank/HFC/Financial Institution.
  • The loan must be sanctioned between 1st April 2016 and 31st May 2017.
  • The value of the property must be Rs 50 Lakhs or less.
  • The home loan availed must be Rs 35 Lakhs or less.
  • The loan cannot be availed for commercial properties.
 

3.Profits and Gains From Business or Profession

The income earned from trade, manufacturing, commerce and profession is chargeable under this head after a deduction on specified expenses.

 

4.Income from capital gains

Any profit/gain from the sale of a ‘capital asset’ is called a capital gain. You have to pay tax on this capital gain, in the year the transfer of the capital asset took place. Land, Buildings, Vehicles, Patents, machinery and jewellery are popular capital assets.

Short term capital asset : If you hold an asset for 36 months or less, it’s a short term capital asset. The criteria have been reduced to 24 months for immovable properties like house property, land and buildings.

 

Long term capital asset : If you hold an asset for 36 months or more, it’s a long term capital asset.
If some assets are held for 12 months or less they are called short term capital assets. These are :

  • Equity or Preference Shares of a listed Company on a Stock Exchange like NSE and BSE.
  • Debentures, Bonds, Government Securities listed on a stock exchange.
  • Units of UTI
  • Units of equity oriented mutual funds
  • Zero coupon bonds.

These above assets if held for more than 12 months are long term capital assets.

 

Taxation of debt and equity funds

Debt Funds: If debt funds are held for less than 36 months, gains/profits are called short term capital gains. These short term capital gains are added to taxable salary and taxed as per tax bracket. If debt funds are held for more than 36 months, gains/profits are called long term capital gains. These gains are taxed at 20% with indexation.

Equity Funds: If equity funds are held for less than 12 months, gains/profits are called short term capital gains. These gains are taxed at 15% + cess. If equity funds are held for more than 12 months, gains/profits are called long term capital gains. Long term capital gains are taxed at 10%, over and above Rs 1 Lakh.

Immovable Property: If you hold immovable property like a house for 2 years or less and then sell, gains are called short term capital gains. These are added to taxable salary and taxed as per tax brackets. If you hold immovable property like a house for more than 2 years and then sell, gains are called long term capital gains. These are taxed at 20% with indexation benefit.

Gold/Jewellery: If you hold gold/jewellery for 3 years or less and then sell, gains are called short term capital gains. These are added to taxable salary and taxed as per tax brackets. If you hold gold/jewellery for more than 3 years and then sell, gains are called long term capital gains. These are taxed at 20% with indexation benefit.

 

5.Income from other sources

Income from other sources covers income which doesn’t fall under other heads of income.

  • Interest income from savings bank account.
  • Interest from FDs and RDs.
  • PPF and EPF income after maturity which is exempt from tax, is declared as exempt income under Income From Other Sources.
  • If you are collecting pension on behalf of a deceased person, this income comes under income from other sources.
  • Money received from lottery, TV and Game Shows, Puzzles, Online Games are taxed under income from other sources.
 

How to calculate Income Tax?

Steps to calculate income tax

  • You have to first calculate gross salary. This is done by adding Dearness Allowance, House Rent Allowance and Special Allowance to Basic Salary.
  • You then have to deduct HRA exemption, Standard Deduction and Professional Tax from the gross salary.
  • You then add interest income, fees, commissions or bonus if any.
  • Add other income like capital gains and income you get from renting house/property.
  • You then subtract Chapter V1A deductions which are Section 80 deductions (These are from Section 80C to Section 80U).
  • The income you get is the net taxable income.
  • You have to pay tax based on the income tax slab you fall under.
 

Income Tax Slabs (Income Tax Rules For FY 2018-19)

 

Income Tax Slab For Individuals (Less than 60 years):

Income Tax Slabs Tax Rate
Income up to Rs 2,50,000 No tax
Income from Rs 2,50,000 - 5,00,000 5%
Income from Rs 5,00,000 - 10,00,000 20%
Income more than Rs 10,00,000 30%
 

Income Tax Slabs For Senior Citizens (60 Years or more but less than 80 years):

Income Tax Slabs Tax Rate
Income up to Rs 3,00,000 No tax
Income from Rs 3,00,000 - 5,00,000 5%
Income from Rs 5,00,000 - 10,00,000 20%
Income more than Rs 10,00,000 30%
 

Income Tax Slabs For Super Senior Citizens (80 Years or more):

Income Tax Slabs Tax Rate
Income up to Rs 5,00,000 No tax
Income from Rs 5,00,000 - 10,00,000 20%
Income above Rs 10,00,000 30%
 

Standard Deduction

You get a standard deduction of Rs 50,000 a year from FY 2019-20.

 

Rebate under Section 87A

If you have taxable income up to Rs 5 Lakhs, you get a full tax rebate. This rebate is limited to Rs 12,500. This rebate is applied to the total tax before adding the Education Cess (4%).

 

Chapter V1A Tax Deductions

Section 80C

You can avail a deduction up to Rs 1.5 Lakhs a year under Section 80C of the Income Tax Act. Investments in PPF, ELSS, Sukanya Samriddhi Account, NSC, SCSS, 5-Year FD, Post Office Time Deposit, NABARD Rural Bonds, Contribution to NPS, your contribution to EPF and VPF enjoy this deduction. The premiums paid on life insurance plans like term life insurance, endowment plans, ULIPs, Money Back Plans and Whole Life plans enjoy Section 80C. Principal repayments on home loan and payment of children’s tuition fees for school/college/university enjoy the benefit. This is a collective deduction up to Rs 1.5 Lakhs a year.

 

Section 80CCC

You get this deduction for the amount paid towards an annuity plan of LIC or any other insurer.

 

Section 80CCD(1B)

The amount you deposit towards NPS up to Rs 50,000 a year enjoys this deduction.

 

Section 80D

You get a deduction of up to Rs 25,000 a year on health insurance premiums paid for self, spouse and dependent children. You get an additional deduction of up to Rs 25,000 on health insurance premiums paid for parents below 60 years and Rs 50,000 if parents are senior citizens. (Above 60 years of age).

 

Section 80DD

You get this deduction on expenses for a dependent handicapped relative for medical treatment. For disability between 40% to 80%, you get a fixed deduction of Rs 75,000. For severe disability (>80%) its Rs 1,25,000 a year.

 

Section 80DDB

You get this deduction for expenses incurred towards treatment of specified ailments up to Rs 40,000 a year. Senior citizens can claim a deduction up to Rs 1,00,000 a year.

 

Section 80G

Various donations are eligible for Section 80G.

Donations with 100% deduction :

  • Prime Minister’s National Relief Fund.
  • National Defence Fund set up by the Central Government.
  • National Illness Assistance Fund.
  • Fund set up by a State Government for medical relief to the poor.
 

Donations with 50% deduction :

  • Jawaharlal Nehru Memorial Fund.
  • Prime Minister’s Drought Relief Fund.
  • Indira Gandhi Memorial Trust.
  • The Rajiv Gandhi Foundation.
 

Section 80E

Deduction for Education Loan Interest

You get this deduction on the interest component of the education loan taken for higher studies of self, spouse and children, up to any limit. This deduction is available for a maximum of 8 years starting from the year interest repayment commences, till the entire interest is repaid, whichever is earlier.

 

Section 80GG

You get this deduction for rent paid when HRA is not received. You must not have residential accommodation at the place of employment.

Deduction is the least of:

  • Rent paid – 10% of adjusted total income
  • Rs 5,000 a month
  • 25% of adjusted total income.
 

Section 80U

You get this deduction of Rs 75,000 a year on suffering from a physical disability like blindness or mental retardation. For severe disability its Rs 1,25,000 a year.

 

Section 80TTA

You get a deduction of up to Rs 10,000 a year on interest income from savings account from banks and post offices. This is for people less than 60 years of age.

 

Section 80TTB

This deduction is available for a resident senior citizen aged 60 years and above. The maximum deduction is Rs 50,000 a year for interest on bank deposits and post office deposits.

 

Calculation of Income Tax

Let’s understand income tax with this example. You are 35 years and earn a basic salary of Rs 50,000 a month. HRA is Rs 25,000 a month. Special Allowance is Rs 13,000 a month. LTA is Rs 20,000. You live in Chennai and pay a rent of Rs 20,000 a month.

  • You live in a rented apartment in Chennai. You earn a basic salary of Rs 50,000 a month, and pay rent of Rs 20,000 a month. You get a HRA of Rs 25,000 a month or Rs 3 Lakhs a year. Let’s calculate income tax payable?
Nature Amount (Rs) Exemption/Deduction Taxable (Rs)
Basic Salary 6,00,000   6,00,000
HRA 3,00,000 1,80,000 1,20,000
Special Allowance 1,56,000   1,56,000
LTA 20,000 12,000 (Bills Submitted) 8,000
Standard Deduction   50,000  
Gross Total Salary     8,34,000

Actual amount of HRA = Rs 25,000.
50% of salary as you reside in a metro= 50% x (50,000) = Rs 25,000.
Actual rent paid - 10% of salary = 20,000 – 10% (50,000) = Rs 15,000.

You get an exemption on the least of the 3 amounts which is Rs 15,000 a month or Rs 1,80,000 a year. The remaining Rs 1,20,000 is taxed.

You earn interest income from SB account at Rs 8,400 a year. You have invested Rs 50,000 for the year in PPF. You pay term insurance premium at Rs 8,000 a year and invest Rs 20,000 in ELSS. You also pay a health insurance premium of Rs 12,000 a year. You earn Rs 10,000 interest income from FD. These are the tax deductions you can avail:

Section 80C: PPF + ELSS + Term Insurance Premium = Rs 78,000.
You also have own contribution to EPF = 12% of basic salary = 50,000 *12% = Rs 6,000 *12 = Rs 72,000.
The total Section 80C deduction = Rs 1,50,000 a year.
The total Section 80D deduction = Rs 12,000 a year.
The total Section 80TTA deduction = Rs 8,400 a year.

 

Calculate Gross Taxable Income in India

Nature Amount (Rs) Total (Rs)
Income from salary 8,34,000  
Income from other sources 18,400  
Gross Total Income   8,52,400
Deductions    
Section 80C 1,50,000  
Section 80D 12,000  
Section 80TTA 8,400 1,70,400
Gross Taxable Income   6,82,000

You fall in the general income tax slab

  • Up to Rs 2,50,000 there’s no tax.
  • Between Rs 2,50,000 to Rs 5,00,000 its 5% of Rs 2,50,000 = Rs 12,500.
  • You have to pay 20% on Rs 1,82,000 = Rs 36,400.

You have to pay a total tax of Rs 12,500 + Rs 36,400 = Rs 48,900. You have to add 4% cess = Rs 50,856.

 

How to use IndianMoney Income Tax Calculator?

Income

  • You fill up the Gross Annual Income.
  • You then fill up Annual Income from Interest like SB account, FD and RD.
  • Fill up annual interest paid on Home Loan under Section 24 up to Rs 2 Lakhs for self occupied property.
 

HRA Exemption

  • Fill in Basic Salary received per annum.
  • Fill in Dearness Allowance if applicable per annum.
  • Fill in HRA received from Company per annum.
  • Key in total rent paid per annum.
 

Deduction

  • Key in Section 80C deductions up to Rs 1,50,000 a year.
  • Key in Section 80CCD(1B) deductions up to Rs 50,000 a year.
  • Key in Section 80D deductions on health insurance premiums up to Rs 75,000 a year (This is for self + family + senior citizen parents). This is Rs 1,00,000 if a senior citizen pays for himself + senior citizen parents.
  • Key in Section 80G deductions on eligible donations.
  • Key in Section 80E on interest paid on education loan.
  • Key in Section 80TTA on interest on SB/Post Office account up to Rs 10,000 a year.
  • Key in Section 80TTB for senior citizens up to Rs 50,000 a year on bank deposits.
  • Fill in Professional Tax.
  • Choose Income Tax Payee like Male, Female, Senior Citizen and Very Senior Citizen.
  • Choose if you live in a Metro City.
  • The Calculator shows Income Tax Payable.
Get the Best Financial Advice on Tax PlanningClick Here
 

What is income tax?

If you earn a salary or an income beyond a particular set limit, you have to pay a part of this income to the Government as tax.This tax is charged annually by the Government.

What is tax planning?

Tax planning is making use of the deductions allowances and exemptions provided by the Government to save on your taxes.You need to know which income tax slab you fall under and what are the income tax rates charged.You can invest in certain financial instruments and get a tax deduction up to INR 1.5 Lakhs under Section 80 C of the income tax act.You can avail deductions under various Sections of the income tax act to further reduce your tax liability.

How do you calculate tax using a tax planner?

Step 1:

Your gross salary (CTC) includes basic salary, dearness allowance, House rent allowance, medical allowance, other allowances, bonus and so on.You have to fill in your gross salary (CTC) you earn in a year in the gross salary (CTC) slot.

Step 2:

You have to select metro or the non metro option based on the city you live in the HRA exemption calculator at the bottom of the page.You have to add your basic salary + Dearness allowance (DA) in your monthly salary slip and convert it to the yearly figure. You then fill it in the Basic salary + DA slot of your HRA exemption calculator.Your HRA is mentioned in your salary slip as a monthly figure which you multiply by 12 to convert it to a yearly figure. You have to fill this amount in the HRA received slot of the HRA exemption calculator.You then fill in the actual rent paid per month which you multiply by 12 to get the yearly figure in the actual rent paid slot.The tax calculator calculates your HRA exemption based on:

  • Actual HRA received
  • 50% of Basic salary + DA if you live in a metro or 40% of Basic salary + DA if you live in a non metro
  • Actual rent you pay – 10% * (Basic salary + Dearness allowance)

The HRA Exemption calculator then calculates the least among the three (1, 2 and 3) and fills it in the HRA Exemptions u/s 10 A slot.

Step 3:

You have to add your medical allowance and conveyance allowance and convert it to a yearly figure and fill it in the other Exemptions u/s 10 A slot.

Step 4:

The maximum professional tax in India is INR 2500 a year. You have to fill in the professional tax available from your salary slip after converting it to a yearly figure in the professional tax slot.The tax calculator then subtracts the total of HRA Exemptions u/s 10 A, other Exemptions u/s 10 A and the professional tax from the Gross salary (CTC) to give the net income under salaries.

Step 5:

You get tax deductions on investments you make in certain financial instruments such as PPF, ELSS, NPS and premium on life insurance plans up to INR 1.5 Lakhs a year under Section 80 C of the income tax. You have to fill in your investments eligible for deduction under Section 80 C up to INR 1.5 Lakhs a year in the Deductions u/s 80 C slot.

Step 6:

You get tax deductions on investments you make in equity mutual funds or shares under RGESS up to a maximum of 50% of INR 50,000 which is INR 25000 a year.You fill in your investments under the RGESS in the Deductions u/s 80 CCG slot.

Step 7:

You get deductions on the premiums you pay for a health plan for yourself and family up to INR 15000 a year. If you/parents are senior citizens then this deduction goes up to INR 20000 a year. You can avail a maximum tax deduction of INR 35000 a year on the health insurance premiums for both yourself/family and senior citizen parents. You fill in the health insurance premiums (yourself + family +senior citizen parents) up to INR 35000 a year in the Deductions u/s 80 D slot.

Step 8:

Section 80 G deductions are towards an eligible charitable cause. Different charitable causes have different eligibility limits. You get a tax deduction of 50% or 100% depending on the charitable cause. You need to fill in your donation to the charitable cause in the deduction u/s 80 G slot.

Step 9:

Section 80 E deductions are availed on the interest you pay for an education loan with no upper limit. You need to fill in the EMI interest you pay on your education loan after converting it to a yearly figure. You then fill the interest on your education loan in the deduction u/s 80 E slot.

Step 10:

You get a deduction up to INR 10000 a year on the interest you earn on your savings bank account. You need to fill in the interest you earn on your savings bank account in the deduction u/s 80 TTA slot.

Step 11:

You get a tax deduction on the EMI interest you repay towards your home loan up to INR 2 Lakhs a year under Section 24 for a self occupied property. You need to fill in the EMI interest you pay on your home loan after converting it to a yearly figure. You then fill the interest on your home loan in the tax benefit u/s 24 slot.The tax calculator then adds up all deductions giving you the total deductions in the Tax deductions/benefits space.Your taxable income is the difference between net income under salaries and the total deductions/benefits.

Step 12:

You then select your income tax slab and rates depending on your gender (male/female), senior citizen (between 60 years-80 years) or super senior citizen (above 80 years).The tax calculator calculates the tax on total income obtained from the taxable income slot. Based on the tax slab you fall under and the tax rates corresponding to these slabs it calculates the tax on total income slot.You have to pay an education cess of 3% (Education cess at 2% + Secondary higher education cess at 1%).The tax calculator calculates the education cess on the tax on total income and fills up the education cess slot.It then adds up the tax on total income and the education cess to fill the tax on cess slot.The tax calculator then calculates your tax liability in the tax liability slot.

Note :

  • If your total taxable income (obtained from the taxable income slot) is less than INR 5 Lakhs you are eligible for a tax rebate of INR 2000.The tax calculator subtracts the tax credit of INR 2000 from the tax with cess slot to give you your tax liability.
  • If you earn income above a crore you have to pay a surcharge on income tax of 10%.You have to pay surcharge tax of 10% on the tax on total income and not on your actual income. You have the tax on the total income slot in the tax calculator. You are charged a surcharge of 10% on this amount in the surcharge slot of the tax calculator.

The total of tax on total income and surcharge gives you the tax with surcharge.

Step 13:

The tax calculator then calculates the Income Tax Ratio. The calculator divides your gross income by 12 to give the Monthly Income in the monthly income slot.Your monthly Tax (Approximate TDS a month) is calculated by dividing tax liability by 12 in the Monthly Tax (Appx TDS) slot.The tax calculator then divides the Monthly Tax (Appx TDS) slot by the monthly income slot to give the income tax ratio in the Income Tax Ratio slot.

 

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