Income Tax Calculator
An Income Tax Calculator is a user-friendly online tool, which helps you in calculating your income tax based on the taxable income. You can calculate tax online for FY 2023-24 (AY 2024-25), FY 2022-2023 (AY 2023-2024) & FY 2021-2022 (AY 2022-2023) using our income tax calculator. For AY 2024-25, we have updated our calculator to reflect the changes in income tax slabs, rates and introduction of standard deduction in the revamped new tax regime as per Budget 2023 announcement. ...Read More
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What is Income Tax Calculator?
An Income Tax Calculator is an easy to use tool available online that can help you calculate tax online on your taxable income.
Using an income tax calculator, you can easily organize and prepare your financial statement for the current financial year while taking steps to maximize your tax savings. The availability of income tax calculator online also makes them both accessible and easy to use while estimating your net taxable income (after deducting various investments and expenses).
Let’s check how to calculate income tax online by using the tax calculator available online.
How to Use Income Tax Calculator online for FY 2023-24, FY 2022-23 & FY 2021-22
You should follow the steps mentioned below to use the income tax calculator online:
Step 1:Visit Income Tax Calculator online on Max Life Insurance.
Step 2: Select the financial year for which you want to calculate taxes for from the dropdown – 2023-24, 2022-23 or 2021-22. Also, select your age if you are regular individual (0-60 years), senior citizen (60-80 years) or super senior citizen (80 and above) and click on “Next” button.
Step 3:Enter your Gross Income from Salary, Income from Interest, Rental Income and Income from Other Sources and click on “Next”.
Step 4:In the next step, enter your tax-saving investment details to claim Deductions under Section 80C, HRA u/s 10 (13A), Medical Insurance u/s 80D, NPS u/s 80CCD, Interest on Housing Loan, Bank Interest (80TTA), Donation u/s 80G or any other deductions that you want to claim. After entering all the tax-saving investments amount, click on “Next” to proceed.
Step 5:Once you enter all the details mentioned above, the income tax calculator will calculate tax online on the basis of old and new tax regime both.
If you didn’t exhaust the upper limit on Section 80C (Rs.1.5 lakh), you can save tax online under Section 80C by clicking on the “Views Plans” button.
How to Calculate Gross Income from Different Sources of Income?
To calculate tax online using Income tax calculator 2023, you need to compute your gross income. Gross income is classified into 5 categories while filing ITR online:
- Income from Salary
- Income from Business or Profession
- Income from House Property
- Income from Capital Gains
- Income from Other Sources
In the Union Budget 2023, the tax slabs of the Old Tax Regime for FY 2023-24 have remained the same as FY 2022-23. However, the number of income tax slabs has been reduced for the new tax regime for FY 23-24 as compared to FY 22-23.
Let’s understand these categories in detail below.
Income from Salary: Under this you need to add monthly income that you are earning by working for an employer. If you are a salaried employee, you can add your income under salary head. The salary you receive consists of components like Basic Salary, House Rent Allowance (HRA) , Dearness Allowance, Gratuity, Provident Fund, travel allowance, or any other allowances. You can check all these components in your Salary Slip that your employer will be providing you every month
Income from Business or Profession: Under this head you need to enter all the income from any business activity or by practicing a profession. The income that one earns through business or profession is also taxable
Income from House Property: Income from House Property includes all the rent income that you are earning through renting out any residential or commercial property. You will be required to pay taxes on rental income as well
Income from Capital Gains: Capital Gains include any profit or gain through sale or transfer of capital assets like stocks, mutual funds, property or real estate etc. Capital Gains are divided into Short Term Capital Gains (STCG) and Long Term Capital Gains (LTCG) on the basis of duration for which you stay invested. This categorization is also necessary as the taxation differs for STCG and LTCG
Income from Other Sources: Any income that does not fall under the heads mentioned above will come under Other Sources. This will include any income from lottery, gift (more than Rs.50,000 per annum), bank interest etc.
How to Calculate Income Tax of a salaried employee?
The Government of India mandatorily deducts income tax from both salaried and self-employed individuals. As a salaried individual, your monthly salary comprises different components such as basic salary, HRA, transport allowance, and other special allowances. Few of these allowances are tax-exempt. Thus, you need an online income tax calculator to calculate your gross taxable income and available tax-deductibles. Without knowing how to calculate income tax, you may end up overpaying income tax.
Step 1: Calculate Gross Income
Write down your total income, including the allowances in the income tax calculator window. Significant exemptions that you receive on different salary components include House Rent Allowance (HRA) and Leave Travel Allowance (LTA). Remove these components from your gross annual salary.
House Rent Allowance is generally considered the lowest of the following values:
- House rent allowance received from the employer
- Actual rent paid less 10 percent of basic+DA monthly salary
- For a metro city, 50% of the basic salary
- For a non-metro city, 40% of the basic salary
After making all necessary deductions with the help of an income tax calculator, you must declare income received from different other sources, such as capital gains, and deposits. The resulting value is your total gross income.
Step 2: Calculate Net Taxable Income
Various instruments offer tax-saving benefits to further lower your taxable income under Section 80C of the Income Tax Act 1961. The income tax calculator helps you enumerate and compile the details of these tax-saving investment options. Standard tax-saving instruments include:
House Rent Allowance is generally considered the lowest of the following values:
- Life insurance
- Unit Linked Insurance Plans (or ULIPs)
- Mutual funds
- Equity Linked Savings Schemes (or ELSS)
- Public Provident Fund (or PPF)
- National Pension System (or NPS)
Section 80C
Both individuals and HUF members can avail of tax deductions up to Rs. 1.5 lakh under Section 80C. Popular tax-saving instruments under this Section include Public Provident Fund (PPF), Life Insurance policies, Employee Provident Fund (EPF), Home Loan repayment, National Saving Certificates (NSC), and Equity Linked Savings Scheme (ELSS).
An online income tax calculator incorporates all such deductions to help you calculate your total taxable income with ease.
Section 80CCD (1)
The contribution towards NPS is eligible for tax deduction under this Section. If you want to know the values beforehand, an income tax calculator is the perfect online tool.
For a salaried employee, it is 10% of the gross salary with a given limit of Rs 1.5 lakh under section 80 CCE.
Section 80CCD (1B)
Both salaried and self-employed individuals can avail of an additional tax deduction of Rs 50,000 under this Section, over and above that provided under Section 80C. Together, thus, you can save up to Rs. 2 lakhs under Section 80C and Section 80CCD (1B). You can easily declare your NPS contributions on an income tax calculator while calculating your tax liability.
Section 80D
The premium amount paid towards health insurance is tax-deductible underSection 80D for both individuals and HUF members. The maximum amount of deductions claimable is calculated as per the following criteria:
- Rs 25,000 deduction on self-medical insurance, spouse and children’s medical insurance
- Additional Rs 25,000 deduction on the insurance of parents ageing below 60 years
- Additional Deduction of Rs 50,000 when the individual and parents, both are above 60 years of age
Section 80DD
BThis Section is also applicable to individuals and HUF, who can make deductions for the medical expenditures of a dependent disabled member of the family. You can get deductions up to Rs 1.25 Lakh depending upon the disability of the person
You can provide details of your expenses under this Section on an income tax calculator.
Section 80E
The Section applied to only individuals includes deduction on the interest paid towards education loan. The deduction in section 80E can be enjoyed 8 years only.
Step 3: Tax Slab Based on Net Taxable Income
In the Union Budget 2022-2023, the tax slabs under both the New Tax Regime and the Old Tax Regime have remained the same as FY 2021-22. While the tax filing process has become easier under the new tax regime, the calculation of income tax liability has become hassle-free, too – thanks to the availability of various online income tax calculators.
After subtracting all qualifying deductions from your total annual income using an online income tax calculator, you will get the value of your net taxable income. As per existing tax slab rates, you will have to pay taxes according to the category your income falls in. You can also take help from an online income tax calculator to do the calculations as per the applicable tax slab.
Step 4: Calculate Taxe
You may consider tax calculation to be cumbersome. To make the process smooth, therefore, you can use an online income tax calculator available on the Income Tax India site.
Step 5: Consolidate Net Taxes
The last step is to consolidate the net tax payable by deducting all applicable deductions and exemptions based on the tax saving investments made by you. In this step you also need to consider if you qualify for the rebate under Section 87A.
Section 87A Rebate:
Tax rebate is a type of benefit offered by the Government of India to individuals whose net taxable income does not exceed Rs. 5 lakhs. Thus, if your total taxable income is less than Rs. 5 lakhs, you can claim an additional rebate of up to Rs. 12,500 on the total tax payable (before adding health and education cess of 4% into the tax calculated in the previous step).
Since you have calculated net taxable income with the help of an income tax calculator, you can deduct the aforementioned tax rebate, if applicable.
In another case, if the net taxable income exceeds Rs 5 lakhs, you will not be able to avail of the tax rebate under this Section.
With the help of an online income tax calculator, you can calculate your net taxable income on which you have to pay tax. Although the process may seem complicated, using an online income tax calculator can make it easier for you to get accurate values.
The main objective of an income tax calculator is to get proper methods of saving tax through various deductions to reduce tax liabilities.
Income Tax Slab Rates for New and Old Regime
Currently two different Income Tax regimes co-exist in India and individuals can opt to pay taxes under either of the new income tax regime old the old tax regime. In the case of the new tax regime, lower rates of taxation are applicable to higher income groups.
Although you can get an idea of all the tax rates by using an income tax calculator, it is essential to know that the tax slab rates depend upon your age and income group as well as the tax regime you have chosen. After knowing all such details, you can calculate to know the details of your tax liabilities.
Here is how the new income tax slab rates are different from the slab rates of the old regime for AY 24-25::
| Net Taxable Income (Rs.) | New Tax Regime Slab Rate (AY 24-25) | Old Tax Regime Slab Rate (AY 24-25) |
|---|---|---|
| 0 – 2.5 lakh | Exempt | Exempt |
| 2.5 lakh – 3 lakh | Exempt | 5% over Rs. 2.5 lakh |
| 300,001 – 5 lakh | 5% over Rs. 3 lakh | 5% over Rs. 2.5 lakh |
| 500,001 – 6 lakh | 5% over Rs. 3 lakh | Rs. 12,500 + 20% over Rs. 5 lakh |
| 600,001 – 7.5 lakh | Rs. 15,000 + 10% over Rs. 6 lakh | Rs. 12,500 + 20% over Rs. 5 lakh |
| 750,001 – 9 lakh | Rs. 15,000 + 10% over Rs. 6 lakh | Rs. 12,500 + 20% over Rs. 5 lakh |
| 900,001 – 10 lakh | Rs. 45,000 + 15% over Rs. 9 lakh | Rs. 12,500 + 20% over Rs. 5 lakh |
| 10,00,001 – 12 lakh | Rs. 75,000 + 15% over Rs. 9 lakh | Rs. 1,12,500 + 30% over Rs. 10 lakh |
| 12,00,001 – 15 lakh | Rs. 90,000 + 20% over Rs. 12 lakh | Rs. 1,12,500 + 30% over Rs. 10 lakh |
| Over 15 Lakh | Rs. 150,000 + 30% over Rs. 15 lakh | Rs. 1,12,500 + 30% over Rs. 10 lakh |
As you can see, in the case of individuals with net taxable income between Rs. 5 lakh and Rs. 15 lakh, the income tax slab rates under the new regimes are lower and this can reduce the tax burden for these individuals.
Tax slab rates in FY 23-24 (AY 2024-25) for senior citizens between 60 to 80 years:
| Net Taxable Income (Rs.) | New Tax Regime Slab Rate (AY 24-25) | Old Tax Regime Slab Rate (AY 24-25) |
|---|---|---|
| 0 – 3 lakh | Exempt | Exempt |
| 300,001 – 5 lakh | 5% over Rs. 3 lakh | 5% over Rs. 3 lakh |
| 500,001 – 6 lakh | 5% over Rs. 3 lakh | Rs. 10,000 + 20% over Rs. 5 lakh |
| 600,001 – 7.5 lakh | Rs. 15,000 + 10% over Rs. 6 lakh | Rs. 10,000 + 20% over Rs. 5 lakh |
| 750,001 – 9 lakh | Rs. 15,000 + 10% over Rs. 6 lakh | Rs. 10,000 + 20% over Rs. 5 lakh |
| 900,001 – 10 lakh | Rs. 45,000 + 15% over Rs. 9 lakh | Rs. 10,000 + 20% over Rs. 5 lakh |
| 10,00,001 – 12 lakh | Rs. 75,000 + 15% over Rs. 9 lakh | Rs. 1,10,000 + 30% over Rs. 10 lakh |
| 12,00,001 – 15 lakh | Rs. 90,000 + 20% over Rs. 12 lakh | Rs. 1,10,000 + 30% over Rs. 10 lakh |
| Over 15 Lakh | Rs. 150,000 + 30% over Rs. 15 lakh | Rs. 1,10,000 + 30% over Rs. 10 lakh |
As you can see, after the amendment in new tax regime as per Budget 2023 announcement, senior citizen tax payers get the same exemption limit of Rs. 3 lakh under the old tax regime as taxpayers who opt for the new tax regime for AY 2024-25. It is also worth remembering that the new tax regime offers the same income tax slabs and rates irrespective of the age of the taxpayer.
Income Tax Slabs for Super Senior Citizens (above 80 years of age) for AY 2024-25:
| Net Taxable Income (Rs.) | New Tax Regime Slab Rate (FY 23-24) | Old Tax Regime Slab Rate (FY 23-24) |
|---|---|---|
| 0 – 3 lakh | Exempt | Exempt |
| 300,001 – 5 lakh | 5% over Rs. 3 lakh | Exempt |
| 500,001 – 6 lakh | 5% over Rs. 3 lakh | 20% over Rs. 5 lakh |
| 600,001 – 7.5 lakh | Rs. 15,000 + 10% over Rs. 6 lakh | 20% over Rs. 5 lakh |
| 750,001 – 9 lakh | Rs. 15,000 + 10% over Rs. 6 lakh | 20% over Rs. 5 lakh |
| 900,001 – 10 lakh | Rs. 45,000 + 15% over Rs. 9 lakh | 20% over Rs. 5 lakh |
| 10,00,001 – 12 lakh | Rs. 75,000 + 15% over Rs. 9 lakh | Rs. 1,00,000 + 30% over Rs. 10 lakh |
| 12,00,001 – 15 lakh | Rs. 90,000 + 20% over Rs. 12 lakh | Rs. 1,00,000 + 30% over Rs. 10 lakh |
| Over 15 Lakh | Rs. 150,000 + 30% over Rs. 15 lakh | Rs. 1,00,000 + 30% over Rs. 10 lakh |
So you see, the old tax regime offers super senior citizens a higher exemption limit of up to Rs. 5 lakh as compared to the new tax regime that offers a flat income tax exemption limit of Rs. 3 lakh in FY 2023-24 irrespective of the age of the tax payer.
Tax Filing Made Easy Using Income Tax Calculator
Using an income tax calculator helps taxpayers to calculate net taxable income and tax liabilities. Besides, the income tax calculator assesses your taxes based on your taxable income group, tax slab rates and deductions.
Apart from giving accurate results, an income tax calculator also makes it easy to plan savings and investments. The income tax calculator available online can be used anywhere by entering various figures to find out how to save maximum on the taxes legally.
Since the online income tax calculator can give accurate results, you can also plan short-term and long-term financial investments accordingly.
If you are skeptical about how to calculate income tax for the financial year 2023-24, you can use an income tax calculator.
What are the Eligibility Criteria to File Income Tax?
Income tax must be filed by an individual whose taxable income exceeds the maximum exemption limit. In other words, any individual whose income falls within the tax slabs has to file income tax. As per the old tax regime, the exemption limit for individuals aged less than 60 years for FY 2023-2024 is Rs 2.5 lakh in a financial year. For senior citizens i.e. individuals aged 60 years and up to 80 years, the exemption limit is Rs. 3 lakh. While, super-senior citizens aged 80 years or above are exempt from income tax for income up to Rs. 5 lakh under the old income tax regime for FY 2023-24.
No, you can only calculate your tax payable for the financial years - 2023-24, 2022-23 and 2021-22 with income tax calculator 2023.
What are the Benefits of Filing Income Tax Return?
An income tax return is an official statement that you submit to tax authorities as proof of income earned and income tax paid for the applicable financial year. Filing income tax return can offer numerous benefits to taxpayers and few of these are:
Getting a loan approved is not a quick and easy process. But it can get quicker if you file your income tax return. This is to say, filing income tax can aid individuals to apply for loans. It is mandatory as almost all the banks require an individual to show a copy of tax returns.
For individuals planning to emigrate or work abroad, immigration authorities often require proof of income tax payment and filing of past returns. This is done by immigration authorities to assess the tax compliance as well as verify income level of the applicant.
Taxpayers can get a refund if they have a refund due from the Income Tax Department. However, this can only be done if you file your Income Tax returns.
If you have sold an investment at a loss, you can offset this loss against present as well as future investment gains. However, to receive this benefit of offsetting losses against gains, you need to mandatorily file your income tax return.
Incomes That Are Exempt From Income Tax Under The New Tax Regime
Even though the new tax regime offers lower income tax slab rates, many of the deductions under the old tax regime cannot be availed under the new tax regime. Notable among these are the 80C and 80D tax deductions that can only be availed if you are opting for the old tax regime.
But a few types of income are exempt from tax under the new tax regime. These include:
- Interest received from post office savings accounts up to Rs. 3, 500 in a FY for single account and up to Rs. 7,000 in a FY for joint account.
- Gratuity payout obtained from employer. Maximum up to Rs. 20 lakh during lifetime.
- Maturity proceeds of Life Insurance policy
- Contributions made into EPS/NPS account by the employer up to Rs. 7.5 lakh in a FY
- nterest received on Employee Provident Fund (EPF) account balance for annual contribution of up to Rs. 2.5 lakh
- Interest earned and maturity amount received from Public Provident Fund (PPF), but without 80C tax deduction benefit on investments
- Interest earned and maturity amount received from Sukanya Sammriddhi Yojana account, but without 80C tax deduction benefit on investments
- Gifts up to Rs. 5000 in a FY received from employer
- Allowances such as food coupons, travel cost, tour allowance, etc. provided to employee for performance of official duties
- Allowances such as food coupons, travel cost, tour allowance, etc. provided to employee for performance of official duties
Frequently Asked Questions (FAQs)
Also, if you earn less than the exemption limit and want to claim income tax refund then you should file your income tax returns to claim tax refund.
This income tax calculator helps you get a better idea about how the tax regime chosen will impact your taxes so that you can make an informed decision.
All you have to do is fill in your details and calculate.
The gross tax liability can be calculated by subtracting applicable tax deductions from your taxable income. As for total income tax liability, it is calculated by subtracting tax credits from gross tax liability
ARN: PCP/ITC/040723
Sources:
www.etmoney.com/blog/how-to-calculate-your-income-tax-in-5-steps/
www.cleartax.in/s/80c-80-deductions
www.scripbox.com/plan/income-tax-calculator#1
www.economictimes.indiatimes.com/wealth/tax/will-proposed-new-income-tax-slabs-rates-benefit-senior-citizens-heres-the-answer/articleshow/73925187.cms?from=mdr
www.cleartax.in/s/income-tax-slabs#19-20
www.cleartax.in/s/income-tax-slabs
www.economictimes.indiatimes.com/wealth/tax/itr-form-who-is-eligible-to-file-which-tax-return-for-fy-2019-20/articleshow/77199030.cms
www.financialexpress.com/money/income-tax/income-tax-return-filing-by-individuals-who-should-file-and-how-to-file-2/2348463/
www.financialexpress.com/money/income-tax/income-tax-return-filing-5-benefits-of-filing-itr-even-if-your-income-is-not-taxable/2289106/
www.economictimes.indiatimes.com/wealth/tax/incomes-that-are-exempted-under-the-proposed-new-tax-regime/articleshow/74074285.cms
www.icicidirect.com/knowledge-center/article/5-steps-to-calculate-individual-tax-liability
www.incometax.gov.in/iec/foportal/help/individual/return-applicable-1
This calculation is generated on the basis of the information provided and is for assistance only and is not intended to be and must not alone be taken as the basis for an investment decision. The tax calculations stated above are basic tax calculations for the Financial Year 2021-22 & 2022-23 basis our broad understanding of the income tax laws and are not specific advice in regard to your personal tax and investment matters. . You are advised to seek an opinion of Your tax advisor in relation to the exact tax calculation, tax benefits and liabilities applicable to You. Max Life Insurance Company Limited expressly disclaims any liability to any person, if any decision is taken basis the above tax calculation.
1Disclaimer: The assumed rate of return (4% p.a. and 8% p.a.) shown in the illustrative example are not guaranteed and they are not the upper or lower limits of what you might get back as the value of your policy depends on a number of factors including future investment performance | The amount shown is for 30-year-old healthy male, 15 years premium payment term, 34 years policy term with Max Life Online Saving Plan (Unit Linked Non Participating Individual Life Insurance Plan | Life Insurance is available in this product)
*Disclaimer:Applicable for Titanium variant of Max Life Smart Fixed-return Digital (Premium payment of 5 years, Policy term of 10 years) and a healthy male of 18 years old paying Rs. 20,000/- monthly (exclusive of all applicable taxes)
**Disclaimer:Healthy non-smoking male, 24 years, 2 cr cover,25 years policy term,25 year premium payment term, exclusive pf GST for Max Life Smart Secure Plus Plan (UIN:104N118V04)
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