Step-By-Step Guide For Using An Income Tax Calculator
New Delhi : An income tax calculator is a handy online tool that allows you to evaluate your tax liabilities based on your income. It’s updated as per the announcements of Union Budget for the year that make it a reliable tool for calculating your taxes every year.
If you fall under the taxable income bracket of society, you are liable to pay a specific portion of your annual income in form of taxes. There are two major ways to pay your income tax – deducted at source while your salary's disbursement or through the ITR portal.
The latter is managed by the Central Board of Direct Taxes (CBDT) and involves a provision that states individuals need to pay their dues for any earnings that have been generated, regardless of the source it came from.
As you may already know, there are a lot of tax-saving plans available in the Indian financial market that can help you save a considerable amount of money on taxes. An income tax calculator can also help you choose a reliable plan as per your tax liabilities.
How to Use the Income Tax Calculator Tool?
The income tax calculator tool is readily available online and can be used without having to download any software on your computer. All you need is an internet connection and a browser to calculate your taxes. Follow the steps below to use the calculator:
● Choose an appropriate age bracket you fall in as taxes do vary as per age
● Once done, head over to the “Annual Income” section and enter your gross annual income from one or more sources
● Then, mention the details of any sort of deductions that you have in place under the sections 80C, 80CCC, 80CCD, or 80D under the mandates of the Income Tax Act of India
● Optionally, you may also choose to provide your name, email, and contact number to get a call back from experts regarding your query
● Lastly, simply choose your annual income bracket and hit the “Submit” button
Once you’ve reproduced all the steps as stated, you should be able to view your tax liability on the screen.
Understanding Income Tax Slabs
The income tax system of India works on a slab structure, which means the tax levied on individuals is calculated accordingly. The slab structure is implemented to levy different tax rates to individuals with varying income ranges.
In simple terms, the more your income is, the more tax you’re liable to pay. The income tax slabs are revised accordingly every year when the annual budget is announced. Being a taxpayer in India, you can fall under either of three categories:
● Individuals below the age of 60 years, including both residents and non-residents
● Resident senior citizen between 60 to 80 years of age
● Super senior Indian residents of more than 80 years of age
Depending on which category of taxpayer you fall into, your income tax slab will differ and so your tax liability. An income tax calculator automatically makes the necessary calculations based on the age you input in the tool.
How can you calculate your total income tax liability?
While choosing adequate tax saving plans, knowing your total income tax liability can help you sort through multiple plans and shortlist the ones that offer you the maximum benefits. An income tax calculator lets you identify your total tax liability by considering the following points:
● Your annual income from a job or other sources
● Additional income from sources like rental properties and investments
● Existing tax exemptions
● Allowance you receive for transport, accommodation, and more
If you provide the required information accurately, the tool will help you figure out your total tax liability. In case you already have some taxes paid through TDS, your existing liabilities can be paid off straight from the official portal Challan 280.
By any means, if the taxes paid by you exceed your total liability, the remaining difference will be refunded within 30 days of filing. Keep in mind that filing your returns past the due date will levy additional interest and penalty under section 234F.
Therefore, make sure you remember to file your taxes on time. The due dates vary as per your taxpayer category.
Different tax slabs in India
As stated above, income tax slabs depict the total tax rate that an individual needs to pay based on his/her annual income from one or more sources. Here's a list of tax slabs of 2022-23 for different taxpayer categories in India:
For individuals aged below 60 years:
No. Income Slab Income Tax rate
1. Upto 250,000 Nil
2. 250,000 to 500,000 5% of the amount exceeding 250,000
3. 500,000 to 1,000,000 Rs.12,500 + 20% of the amount exceeding 500,000
4. 1,000,000 & above Rs.112,500 + 30% of the amount exceeding 1,000,000
For senior citizens (60-80 years of age)
No. Income Slab Income Tax rate
1. Upto 300,000 Nil
2. 300,000 to 500,000 5% of the amount exceeding 300,000
3. 500,000 to 1,000,000 Rs.10,000 + 20% of the amount exceeding 500,000
4. 1,000,000 & above Rs.110,000 + 30% of the amount exceeding 1,000,000
For super senior citizens:
No. Income Slab Income Tax rate
1. Upto 500,000 Nil
2. 500,000 to 1,000,000 20% of the amount exceeding 500,000
3. 1,000,000 & above Rs.100,000 + 30% of the amount exceeding 1,000,000
For individuals and HUF (Based on the new regime):
No. Income Slab Income Tax rate
1. Upto 250,000 Nil
2. 250,000 to 500,000 5% of the amount exceeding 250,000
3. 500,000 to 7,50,000 Rs.12,500 + 10% of the amount exceeding 500,000
4. 7,50,000 to 1,000,000 & above Rs.37,500 + 15% of the amount exceeding 750,000
5. 1,000,000 to 1,250,000 Rs.75,000 + 20% of the amount exceeding 1,000,000
6. 1,250,000 to 1,500,000 Rs.125,000 + 25% of the amount exceeding 1,250,000
7. 1,500,000 & above Rs.187,500 + 30% of the amount exceeding 1,500,000
Bottom Line
Paying your taxes on time is a duly task for every responsible citizen. With online income tax calculator tools, you can easily calculate your total tax liabilities and prevent missing the due date. It also facilitates your decision of choosing a reliable tax-saving plan.
