If you are worried about how to calculate your taxes, we have got you covered. In this article, we will show you how to use our Income Tax Calculator, which will help you determine your tax liability and save more taxes.
The Government of India imposes income tax in India. Everyone who earns money in India is required to pay income tax. The source of income could be salary, pension, or interest on a savings account. Let us understand the basic concepts as shown below.
What is Income Tax?
Individuals and corporations pay income tax, which is the tax levied by the government on income received within a financial year. Taxes are one of the government’s main sources of revenue.
The government uses this revenue to build infrastructure, provide healthcare, education, and subsidies to farmers and the agricultural sector and other government welfare programmes.
Who is liable to pay Income Tax?
Any Individual whose income exceeds Rs.2.5 Lakhs is liable to pay tax to the Government of India. The income tax rate that applies to an individual is determined by the tax bracket in which they fall.
What are the income tax slab rates for FY 2020-21?
The tax rates in the new tax regime are the same for all categories of individuals, i.e. individuals and HUF up to the age of 60, senior citizens between the ages of 60 and 80, and super senior citizens over the age of 80.
Here is a comparison of Income Tax slab rates under the old and new tax regime:
|Income Groups||Old Regime||New Regime|
|Up to ₹ 2.50 lakh||Nil||Nil|
|Above ₹ 2.50 lakh to ₹ 5 lakh||5%||5%|
|Above ₹ 5 lakh to ₹ 7.5 lakh||20%||10%|
|Above ₹ 7.5 lakh to ₹ 10 lakh||20%||15%|
|Above ₹ 10 lakh to ₹ 12.5 lakh||30%||20%|
|Above ₹ 12.5 lakh to ₹ 15 lakh||30%||25%|
|Above ₹ 15 lakh||30%||30%|
Note: Income tax slabs rate for Senior Citizens in Old Tax regime
|Income Tax Slab||Tax Rates (Aged 60 Years But Less Than 80 Years)||Tax Rates for Super Senior Citizens (Aged 80 Years And Above)|
|Rs 0-.00- Rs. 3.00 lakh||NIL||NIL|
|Rs 3.00 lakh- Rs 5.00 Lakh||5%||NIL|
|Rs 5.00 lakh – Rs 10 Lakh||20%||20%|
|> Rs 10 Lakh||30%||30%|
What documents are required for Income Tax Return Filing?
The following is a list of the basic documents you’ll need to file your tax return:
- Form 16:
- TDS (Tax Deducted at Source) Certificate is another name for Form 16. The basis for submitting income tax returns is Form 16. If you are a salaried employee, the first form to collect is Form 16.
- Salary Slips:
- The salary slip includes an individual’s salary information, such as the basic salary, Dearness Allowance (DA), TDS amount, House Rent Allowances (HRA), Traveling Allowances (TA), normal deductions, and so on.
- Form 26AS:
- The annual consolidated information statement, commonly known as Form 26AS, comprises all of the taxpayer’s tax-related information. It also includes information on tax deducted at source and deposited with the government, details of any advance tax paid, sale of property, capital gain on sale of shares & securities etc.
- Form 16A:
- TDS on the interest income from fixed deposits is mentioned in Form 16A. When your bank deducts TDS on your interest income from Fixed Deposits, TDS on rent receipts, TDS on insurance commissions, or any other income that is liable for such deduction, you will receive periodic.
- PAN card:
- Your Permanent Account Number (PAN) serves as proof of identity and must be included in your income tax returns.
- Aadhaar card:
- To file your ITR successfully, you must include your Aadhaar details. Individuals are required to provide their Aadhaar details when filing their income tax return under section 139AA of the Income Tax Act. Further, it is mandatory for your PAN to be linked with your Aadhar Card.
- Individuals can claim exemptions under Sections 80D through 80U of the Income Tax Act in addition to the statutory deductions under Section 80C.
- Capital Gain Statement:
- You must obtain a capital gain statement if you have invested in stocks, mutual funds, or other securities. Your brokerage firm will issue this statement. The statement must include details of both short term and long term gain, if any, for calculating your income tax liability.
What is an Income Tax Calculator?
The Income tax calculator is a simple online tool that helps you determine your taxes based on your income. It is convenient, easy to understand, and can be used by anyone to calculate their tax liability.
Our calculator takes basic information such as annual income, house rent, and any additional savings to calculate an individual’s tax liability. It displays the total tax liabilities under both the old and new regimes. The rates are determined by the announcements made at the Union Budget every year.
Want to save more taxes today? Use our free income tax calculator now!
How to use an Income Tax calculator?
In 4 simple steps you will be able to determine your Income Tax Liability; they are as follows:
- First, fill in your basic details, which consist of 3 different categories:
- 1. Income from salary
- 2. Income from house property
- 3. Income from other sources
- After filling in the basic details, you will get your Gross Total Taxable Income- Old & New Regime.
- You will have to fill in the details of your tax-saving investment. These investments can be claimed as deductions from your income.
- Finally, you will be able to see your total tax amount under the Old & New Regime.
Generally, the last day to file your Income Tax Returns for any particular financial year is 31st July of the assessment year following the financial year. However, for the FY 2020-2021 the Income Tax Return filing deadline has been extended to 30th September 2021 due to the Covid-19 pandemic.
How can we help you?
At ICI, we have professionals with extensive knowledge and experience that can assist you in complying with all your Income Tax requirements along with its compliance on a timely basis.
Our service scope includes:
- Income Tax Filing
- Form 16 Issuance
- Tax Planning & Structuring
- TCS Return Filing
- TDS Return Filing
- Tax Notices & Litigation Services