Income Tax Calculator
The income tax calculator is an easy-to-use online tool that helps you in estimating your taxes based on your income. The income tax calculator takes into consideration your income, your house loan interest, investments, and expenses that you have to indicate your total tax payable based on the old or new tax regime.
Steps to Use Income Tax Calculator for FY 2022-2023
To determine your tax liability using an income tax calculator, just enter the relevant details in the fields:
- Select your age bracket.
- Enter your annual salary
- Provide investments and eligible deductions under certain Sections like:
- 80C (ELSS funds, house loan principal repayment, PPF, etc.).
- 80CCD (1B)(National Pension System)
- 24B (Home loan interest payment).
- 80E (Education loan interest payment).
- 80G (Donations/Contributions to any charitable institutions).
- Enter details regarding HRA and LTA exemptions.
Note: You can enter ‘0’ for those fields which you feel are not applicable. Once you are going through the procedure, you will be able to see your tax payable under both old and new regimes for AY 2023-24 (FY 2022-23).
How to Calculate Income Tax?
Income tax is calculated on your taxable income and the applicable tax slab. Your taxable income is determined by adding income from sources such as salary, rent, capital gains, etc. to achieve your total Gross Income, and subtracting from this the exemptions and deductions you are eligible for. Taxes that are paid in the form of tax deducted at source (TDS) or advance tax shall be considered when calculating your income tax.
Calculating Income tax for the Old Regime
In the case of the old tax regime, you can benefit from standard deduction and will be eligible to claim special allowances and tax exemptions on HRA and LTA to arrive at your income derived from salary. To this, add income that is derived from other sources such as capital gains, house property, and business/profession to attain your Gross Total Income.
Based on the relevant tax slab rate, your taxable income is taxed and the cess is added to give you the total tax payment.
Calculating Income tax for the New Regime
As per the new tax regime, you go without most exemptions and deductions, such as HRA, LTA, standard deduction, deductions under Sections 80C, 80D, 80E, 80G, and so on. You can add income from other sources to your income from salary to achieve your Gross Total Income. This is taxed at concessional tax slab rates and the cess will be added to give your total income tax payment.
Income Tax Slabs for Old & New Regime
The old regime tax slabs for AY 2023-24 are discussed below:
- For individuals under 60 years of age.
- For individuals between 60 and 80 years of age.
- For individuals aged more than 80 years and above (super-senior citizens)
- New income tax slab for FY 2020-21 and AY 2023-24
|Taxable Income||Tax Rates|
|Up to INR 2.5 lakh||NIL|
|INR 2,50,001 - INR 5 lakh||5% of income above INR 2.5 lakh + 4% cess on income tax|
|INR 5,00,0001 - INR 10 lakh||INR 12,500 + 20% of income above INR 5 lakh + 4% cess|
|Above INR 10 lakh||INR 1,12,500 + 30% of income above INR 10 lakh + 4% cess|
|Taxable Income||Tax Rates|
|Up to INR 3 lakh||NIL|
|INR 3,00,001 - INR 5 lakh||5% of income above INR 3 lakh + 4% cess on income tax|
|INR 5,00,001 - INR 10 lakh||INR 10,500+20% of income above INR 5 lakh + 4% cess|
|Above INR 10 lakh||INR 1,10,000 + 30% of income above INR 10 lakh + 4% cess|
|Taxable Income||Tax Rates|
|Up to INR 5 lakh||NIL|
|INR 5,00,001 - INR 10 lakh||20% of income above INR 5 lakh + 4% cess on income tax|
|Above INR 10 lakh||INR 1,00,000 + 30% of income above INR 10 lakh + 4% cess on income tax|
|Taxable Income||Tax Rates|
|Up to INR 2,50,000||NIL|
|INR 2,50,001 - INR 5,00,000||5% of income above INR 2.5 lakh + 4% cess on income tax|
|INR 5,00,001 - INR 7,50,000||INR 12,500 + 10% of total income above INR 5 lakh + 4% cess|
|INR 7,50,001 - INR 10,00,000||INR 37,500 + 15% of total income above INR 7.5 lakh + 4% cess|
|INR 10,00,001 - INR 12, 50,000||INR 75,000 + 20% of total income above INR 10 lakh + 4 % cess|
|INR 12,50,001 - INR 15,00,000||INR 1,25,000 + 25% of total income above INR 12.5 lakh + 4 % cess|
|Above INR 15,00,001||INR 1,87,500 + 30% of total income above INR 15 lakh + 4% cess|
Benefits of Filing Income Tax Online
- It is quick and convenient.
- Allows for immediate electronic tax funds.
- Provides a prompt confirmation receipt with real-time status updates.
- It’s completely secure and confidential.
- The entire process is error-free and saves professional costs.
- Helps in getting loan applications, insurance and VISA processing.
- Serves as address and income proof.
- Makes it easier to avoid late penalties, if any.
Should Everyone File for Income Tax?
You should file for income tax returns if your Gross Total Income exceeds the basic exemption limit, for the financial year. If you consider the case of the old regime, then the basic exemption limit is:
- INR 2.5 lakh for citizens below 60 years of age
- INR 3 lakh for senior citizens (between 60 - 80 years).
- INR 5 lakh for super senior citizens (80 years and above).
But on the other hand, in the new tax regime, the basic exemption across all age categories is INR 2.5 lakh. Additionally, you should also file income tax returns, if you have:
- Deposit more than INR 1 crore in your current account(s).
- Spent more than INR 2 lakh on any foreign travel.
- Sustained more than INR 1 lakh on electricity.
- Assets from/income in/ signing authority in an account which is opened in any foreign country.
- If gross total income is more than your exemption limit before claiming relevant capital gains exemptions.
- As per the Union Budget 2021, senior citizens aged 75 and above are exempted from filing ITR for the FY 2020-21, if they are getting pension and interest income, and these two are deposited in the same bank.
Eligibility Criteria to File Income Tax
If your Gross Total Income is above the basic exemption limit, then as a citizen in India, you must file income tax returns. But if your total income is less than the taxable limit, then you can file a NIL return.
Other entities that are eligible to file ITR in India are:
- Local authorities.
- Hindu Undivided Family (HUF).
- Associations of Persons (AoPs).
- Charitable trusts.
- Corporate firms.
- Artificial juridical persons.
- Body of Individuals (BOI).
Remember that, depending on the taxpayer, the correct ITR form must be utilised.
Details Required for e-Filing an Income Tax Return
The following details and documents should be ready when e-filing an income tax return:
- PAN, Aadhaar, and permanent address.
- Form 16 and proofs of the interest income (FD).
- Bank account details that are relevant to the financial year (indicates which account income tax refund should be delivered to).
- Proof of tax paid (TDS, advance tax, etc).
- Deduction details related to Section 80C, 80D, and others under Chapter VI-A.
Tax Exemptions Available for Salaried Professionals
- Standard deduction of INR 50,000.
- House Rent Allowance (total or partial).
- Leave Travel Allowance (for domestic travels).
- Work-related expenses (meal coupons, telephone bills, etc.).
- Deductions under Section:
- 80C, 80CCC, 80CCD(1) (NPS, PPF, ELSS, tuition fees, tax-saver FD)
- 80D (health insurance premiums)
- 80C, 24B, and 80EE/80EEA (home loan repayment)
- 80E (education loan interest)
- 80G (contributions to charities)
- 80TTA (savings account interest) and
- Other deductions
These exemptions/deductions applied to the old regime, but in the case of the new regime, only very few allowances and deductions are available.
Section 80C deduction applies to investments like EPF, ELSS, PPF, LIC premiums, home loan principal repayment, tax saving FD and more. The limit of INR 1.5 lakh includes subsections like 80CCC, 80CCD(1), and 80CCD(2).
But under the new regime, individuals from all age groups are exempted from paying income tax if their taxable income is up to INR 2.5 lakh.
However, with both the regimes, you can claim a rebate of up to INR 12,500 under Section 87A if your taxable income is not exceeding INR 5 lakh. This thereby means that no income tax should be paid if taxable income comes up to INR 5 lakh.