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 the FY 2019-20 (AY 2020-21) & FY 2020-21 (AY 2021-22) using our income tax calculator which is updated as per the Union Budget FY 2020-21

Income Tax Calculator i

See how the latest budget impacts your tax calculation. Updated as per latest budget on 1 February, 2020. No deductions will be allowed under the new tax regime.

Which Financial Year do you want to Calculate taxes for?

Your Age?

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.

Calculate tax online with Income Tax Calculator

How to Use Income Tax Calculator online for FY 2019-20 & FY 2020-21?

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 – 2019-20 or 2020-21. 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 “Save on Taxes” button.

How to Calculate Gross Income from Different Sources of Income?

To calculate tax online using Income tax calculator 2020, 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
     

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:

1. House rent allowance received from the employer

2. Actual rent paid less 10 percent of basic+DA monthly salary

3. For a metro city, 50% of the basic salary

4. For a non-metro city, 40% of the basic salary

Choose the option having the least value of all, and update in the income tax calculator online. Also, you can claim a Standard Deduction of Rs. 50,000 from your annual income for the financial year 2019-20. You can use an income tax calculator to calculate and deduct the HRA and Standard deduction amounts.

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:

1. Life insurance

2. Unit Linked Insurance Plans (or ULIPs)

3. Mutual funds

4. Equity Linked Savings Schemes (or ELSS)

5. Public Provident Fund (or PPF)

6. National Pension System (or NPS)

Let us take a look at different tax saving sections, as appearing in an online income tax calculator.   

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 under Section 80D for both individuals and HUF members. The maximum amount of deductions claimable is calculated as per the following criteria:

1. Rs 25,000 deduction on self-medical insurance, spouse and children’s medical insurance

2. Additional Rs 25,000 deduction on the insurance of parents ageing below 60 years

3. Additional Deduction of Rs 50,000 when the individual and parents, both are above 60 years of age

Usually, an online mode of payment is accepted under this Section. You can declare the total amount of health insurance premiums in a year while estimating your tax payable on an income tax calculator. Total deduction in total cannot exceed Rs 1 lakh.

Section 80DD

This 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

The Finance Minister, on February 1, 2020, introduced several modifications to the existing tax slabs and the income tax calculation process under the Union Budget. 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.

Different income tax slab rates are provided below:

For individuals below 60 years of age: please insert both income tax slabs new and old

Net Income Range

Income Tax Rate (Old)_

Income Tax Rate (New)

Up to Rs 2.5 lakh

Nil

Nil

Rs 2.5 lakh to 5 lakhs

5%

5 %

Rs 5 lakh to 7.5 lakhs

20%

10 %

Rs 7.5 lakh to 10 lakhs

20%

15 %

Rs 10 lakh to 12.5 lakhs

30%

20 %

Rs 12.5 lakhs to 15 lakhs

30%

25%

Above Rs 15 Lakhs

30%

30%

Tax slab rates for senior citizens between 60 to 80 years

Net Income Range

Income Tax Rate (Old)_

Income Tax Rate (New)

Up to Rs 3 lakh

Nil

Nil

Rs 3 lakhs to 5 lakhs

5%

5 %

Rs 5 lakh to 10 lakhs

20%

20 %

Above Rs 10 lakhs

30%

30 %

Income tax slabs for super senior citizens above 80 years

Net Income Range

Income Tax Rate (Old)_

Income Tax Rate (New)

Up to Rs 5 lakh

Nil

Nil

Rs 5 lakhs to 10 lakhs

20%

20 %

Above Rs 10 lakhs

30%

30 %

Although you can get an idea of all the tax rates while calculating an income tax calculator, it is essential to know that the tax slab rates depend upon your age and income group.

After knowing all such details, you can calculate to know the details of your tax liabilities. For this, you can also take the help of an online income tax calculator and make the process easy.

Step 4: Calculate Taxes

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

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.

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 2019-20, you can use an income tax calculator. 

Frequently Asked Questions (FAQs)

Q. Does income tax calculator calculate Tax Deducted at Source (TDS)?

A. No, you can only calculate your tax payable for the financial year with income tax calculator 2020.

Q. Is it mandatory to file Income Tax Returns?

A. Every individual, senior citizen and super senior citizen should file their income tax returns if they earn more than the exemption limit. For individuals, senior citizens and super senior citizens, the exemption limit is Rs.2.5 lakh, Rs.3 lakh and Rs.5 lakh respectively.

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.

Q. How can I Calculate Tax Online?

A. You can calculate your income tax online on the basis of your taxable income and income tax slab that you fall in. Your net taxable income is calculated after deducting all the tax-saving investments you made. After deducting all the deductions and exemptions, you are taxed on the basis of income tax slabs applicable on your income.

Q. How can I Calculate tax on salary?

A. You can calculate tax on salary by calculating your taxable salary which will include your Basic Salary, House Rent Allowance (HRA), Transport Allowance, Special Allowance etc. Once you know your taxable salary, you will know the income tax slab you fall in. Then you can use our income tax slab online to calculate and save taxes online.

Q. What are the Income Tax Slab for AY 2020-21?

A. The income tax slab for AY 2020-21 are as follows:

Income Tax Slab

Regular Individuals

Senior Citizens

Super Senior Citizens

Up to Rs.2.5 lakh

Nil

Nil

Nil

Rs.2.5 lakh to 5 lakh

5%

5%*

Nil

Rs.5 lakh to 10 lakh

20%

20%

20%

Above Rs.10 lakh

30%

30%

30%

*Senior Citizens are taxed at 5% if they earn an income of Rs.3 lakh to Rs.5 lakh.

Q. What are the new Income Tax Rules?

A. Income Tax calculation is a hectic processes due to a number of complex calculations involved around the income details and exemptions. With the new tax regime that might abolish majority of deductions and establish a flat tax system, the system will get several folds smoother. While the pros and cons of both the tax regimes are debateable, the government has suggested that it will come up with an option for the end user to choose how they want to pay their income tax. That means, as a tax payer, you will have the option to choose from new tax regime and old tax regime.

Though the income tax exemptions are reduced in the new tax regime, the income tax rates are also substantially lower as compared to existing tax deduction rates(FY 19-20).

This income tax calculator here helps you in getting an idea about how new regime will impact your taxes and how different it is from the existing regime.

All you have to do is fill in your details and calculate.

Sources:

https://www.etmoney.com/blog/how-to-calculate-your-income-tax-in-5-steps/

https://cleartax.in/s/80c-80-deductions

https://scripbox.com/plan/income-tax-calculator#1

https://economictimes.indiatimes.com/wealth/tax/will-proposed-new-income-tax-slabs-rates-benefit-senior-citizens-heres-the-answer/articleshow/73925187.cms?from=mdr

https://cleartax.in/s/income-tax-slabs#19-20

https://cleartax.in/s/income-tax-slabs

ARN:- PCP/TC4

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 2019-20 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.