How much tax are you paying annually? Do you want to use an income tax calculator online? An income tax calculator online is a tool that helps determine taxes based on a person’s income as announced in theirannual budget.
Individuals who fall under the taxable income bracket must pay some portion of their annual income through tax.
During the monthly salary disbursement, income tax is paid as tax deducted at the source. Additionally, you get paid income tax via the income tax return system run by CBDT (Central Board of Direct Taxes).
The online tax payment provision ensures that individuals will pay their stipulated dues on their earnings generated from other sources.
How to use an income tax calculator online?
The big question in people’s minds is how they use the income tax calculator online. Here are the easy steps that help you use the income tax calculator online.
- Choose the year of assessment for which you want to compute tax
- Next, you have to select your age in the field. Keep in mind that income taxes in India vary according to different age groups
- Then, you have to click on the income field. Here are the details of your total salary without any deductions. In this field, you also have to fill in the details like annual income from other sources, interest paid on home loans, etc
- After that, you have to enter the details of deductions, like basic deductions under sections 80C, 87A, 80D, etc., and give the details of interest applicable to your education loan and a deposit made in your savings account.
- Next, you have to give details on HRA exemptions like DA, HRA, basic salary, and total rent paid yearly.
- Finally, choose whether you want to live in a metro city and click on calculate button to calculate your tax liability.
Income Tax Slabs
The income tax in India works according to the slab system, and tax is paid on the basis of individual taxpayers. Income tax slabs indicate the different tax rates charged for different income ranges.
In simple words, the more you earn, the more tax you have to pay. Remember that income tax slabs are updated every year. These slab rates are different for different taxpayer categories.
According to income tax, there are three categories of individual taxpayers:
- Individuals under the age of 60, non-residents or residents both
- Individuals of 60 to 80 years of age, including resident senior citizens
- Individuals more than 80 years ago, including resident super senior citizens
This article tells you how to use an income tax calculator and how income tax slabs are used. People having to pay taxes based on their annual income are recommended to use the income tax calculator online, as they come under the best tax-saving investment options.
Income tax calculators take into account various exemptions and deductions under the Income Tax Act.