Income Tax Calculator

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 2021-2022 (AY 2022-2023) & FY 2022-2023 (AY 2023-2024) using our income tax calculator which is updated as per the Union Budget FY 2022-23.

Income Tax Calculator i

See how the latest budget impacts your tax calculation. Updated as per latest budget on 1 Feb, 2022. 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 2021-22 & FY 2022-23?

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 – 2021-22 or 2022-23. 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 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 2021-22 and FY 2022-23. 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

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 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

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:

Net Taxable Income (Rs.)

New Tax Regime Slab Rate

Old Tax Regime Slab Rate

0 – 2.5 lakh

Exempt

Exempt

250,001 – 5 lakh

5% over Rs. 2.5 lakh

5% over Rs. 2.5 lakh

500,001 – 7.5 lakh

Rs. 12,500 + 10% over Rs. 5 lakh

Rs. 12,500 + 20% over Rs. 5 lakh

750,001 – 10 lakh

Rs. 37,500 + 15% over Rs. 7.5 lakh

Rs. 12,500 + 20% over Rs. 5 lakh

10,00,001 – 12.5 lakh

Rs. 75,000 + 20% over Rs. 10 lakh

Rs. 1,12,500 + 30% over Rs. 10 lakh

12,50,001 – 15 lakh

Rs. 1.25 lakh + 25% over Rs. 12.5 lakh

Rs. 1,12,500 + 30% over Rs. 10 lakh

Over 15 Lakh

Rs. 1,87,500 + 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 for senior citizens between 60 to 80 years:

Net Taxable Income (Rs.)

New Tax Regime Slab Rate

Old Tax Regime Slab Rate

0 – 2.5 lakh

Exempt

Exempt

250,001 – 3 lakh

5% over Rs. 2.5 lakh

Exempt

300,001 – 5 lakh

5% above Rs. 3 lakh

500,001 – 7.5 lakh

Rs. 12,500 + 10% over Rs. 5 lakh

Rs. 10,000 + 20% over Rs. 5 lakh

750,001 – 10 lakh

Rs. 37,500 + 15% over Rs. 7.5 lakh

10,00,001 – 12.5 lakh

Rs. 75,000 + 20% over Rs. 10 lakh

 

 

Rs. 1,10,000 + 30% over Rs. 10 lakh

12,50,001 – 15 lakh

Rs. 1.25 lakh + 25% over Rs. 12.5 lakh

Over 15 Lakh

Rs. 1,87,500 + 30% over Rs. 15 lakh

As you can see, senior citizen tax payers get a higher exemption limit of Rs. 3 lakh under the old tax regime as compared to the Rs. 2.5 lakh exemption limit offered under the new tax regime.

Income Tax Slabs for Super Senior Citizens above 80 years:

Net Taxable Income (Rs.)

New Tax Regime Slab Rate

Old Tax Regime Slab Rate

0 – 2.5 lakh

Exempt

Exempt

250,001 – 5 lakh

5% over Rs. 2.5 lakh

Exempt

500,001 – 7.5 lakh

Rs. 12,500 + 10% over Rs. 5 lakh

20% over Rs. 5 lakh

750,001 – 10 lakh

Rs. 37,500 + 15% over Rs. 7.5 lakh

10,00,001 – 12.5 lakh

Rs. 75,000 + 20% over Rs. 10 lakh

 

 

Rs. 1,00,000 + 30% over Rs. 10 lakh

12,50,001 – 15 lakh

Rs. 1.25 lakh + 25% over Rs. 12.5 lakh

Over 15 Lakh

Rs. 1,87,500 + 30% over Rs. 15 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. 2.5 lakh 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 2019-20, 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. The exemption limit for individuals aged less than 60 years for FY 2022-2023 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 for FY 2022-23.   

Legal entities with income in India are also required to pay income tax. Such legal entities include Hindu Undivided Family, Artificial Judicial Persons, (HUF), Association of Persons (AOP), Body of Individuals (BOI), companies, local firms, and local authorities.

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:

1. Quick Loan Approval:

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.

2. Visa Applications:

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.  

3. You Can Claim a Tax Refund:

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.

4. Eligibility to Offset Losses

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
  • Interest 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
  • Voluntary Retirement Scheme (VRS) pay out of up to Rs. 5 lakh  

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 new Income Tax Rules?

A.  Income Tax calculation involves a number of complex calculations involved around the income details, deductions and exemptions. The new tax regime does not offer a majority of deductions and establishes a flat tax system. While there are pros and cons of both the tax regimes, currently, a tax payer to free to choose either the old tax regime or the new tax regime and pay taxes accordingly.

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.

Q. Can I avail the Income Tax Calculator facility on the official website of Income Tax Department India?

A. Yes, you can use the income tax calculator in India on the official website of Income Tax Department India. You can make use of the income and tax calculator, tax calculator and deferred tax calculator on the Official Income Tax Department website.

Q. For which assessment year can I calculate my tax liability?

A. Your tax liability can be calculated for any of the previous financial years. Accurately calculating tax liability for the current FY might be tricky as your income might increase or decrease prior to end of the current FY.

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.

Q. Who can use this income tax calculator in India?

A. An income tax calculator in India can be used by any salaried or self-employed individual who is eligible to pay taxes during the financial year.

Q. How much tax should I pay on my salary?

A. Tax must be paid according to the income tax slab rate set by the Income Tax Department and the tax regime chosen by the tax payer. The tax slab determines the percentage of tax payable by different income different groups. Currently you are exempt from paying income tax if your annual taxable income is below Rs. 2.5 lakh for the financial year.  

Q. What is the maximum non-taxable income limit?

A. The maximum non-taxable income limit differs based on the age of the tax payer. For FY 2022-23, this limit is Rs. 2.5 lakh for individuals below 60 years of age. For senior citizens aged 60 years and less than 80 years, the current non-taxable income limit is Rs. 3 lakh. For super senior citizens aged 80 years and above, the current non-taxable income limit is Rs. 5 lakh in a financial.

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

https://economictimes.indiatimes.com/wealth/tax/itr-form-who-is-eligible-to-file-which-tax-return-for-fy-2019-20/articleshow/77199030.cms

https://www.financialexpress.com/money/income-tax/income-tax-return-filing-by-individuals-who-should-file-and-how-to-file-2/2348463/

https://www.financialexpress.com/money/income-tax/income-tax-return-filing-5-benefits-of-filing-itr-even-if-your-income-is-not-taxable/2289106/ 

https://economictimes.indiatimes.com/wealth/tax/incomes-that-are-exempted-under-the-proposed-new-tax-regime/articleshow/74074285.cms

https://www.icicidirect.com/knowledge-center/article/5-steps-to-calculate-individual-tax-liability

https://www.incometax.gov.in/iec/foportal/help/individual/return-applicable-1

ARN:- PCP/TC/19072022

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.

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