What is an income tax calculator?

An Income Tax Calculator helps you to calculate the total tax payable based on your taxable income, expenses, age, investments and interest paid towards your home loan as per the relevant tax laws.

Depending on the tax regime, the tax slabs and factors considered will vary. The online tax calculator is free, easy-to-use, and generates error-free results instantly. Below are the steps to use the income tax calculator for the current financial year 2022-23.

How to use an income tax calculator for FY 2022-23? (AY 2023-24)?

To find out your tax liability using an income tax calculator, simply follow the below steps:

1. Select your age bracket
2. Enter your annual income
3. Disclose investments and eligible deductions under Sections like:

  • 80C (ELSS funds, PPF, house loan principal repayment, etc.)
  • 80CCD(1B) (National Pension System)
  • 24B (Home loan interest repayment)
  • 80E (Education loan interest repayment)
  • 80G (donations to charitable institutions)

4. Enter HRA, LTA exemptions

You can enter ‘0’ for fields that are not applicable. Once you go through the steps, you will see your tax payable under the old and new regimes for AY 2023-24 (FY 2022-23).

Income tax calculation for FY 2022-23

Income tax is calculated on your taxable income based on the tax slab applicable. Your taxable income is derived by adding income from all sources (salary, rent, capital gains, etc.) to get your gross total income and subtracting from this the deductions and exemptions you are eligible for. As an alternative, you can use our income tax calculator to calculate the tax amount you need to pay. Taxes already paid in the form of TDS or advance tax will be considered when calculating income tax.

Steps to calculate your income tax benefits from home loan

To know your tax benefits from a home loan, you can use our simplistic income tax calculator to calculate the income tax amount you need to pay. Note that the calculation is purely based on your Home Loan and does not include other factors.

The steps to use the tax calculator are as follows:

  1. Visit the Income Tax Calculator page on the Bajaj Finserv Website
  2. Select your gender
  3. Enter your annual income in Rupees
  4. Enter the interest you have paid in the year of IT calculation
  5. Enter the principal amount paid on home loan in the year of IT calculation

Your benefits will be visible to you to the right of the calculator.

Income tax calculation examples:

Your taxable income is derived by adding income from all sources (salary, rent, capital gains, etc.) to get your gross total income and subtracting from this the deductions and exemptions you are eligible for. If you receive HRA and live on rent, you can claim exemption on HRA.

Samaira, a 30-year-old employee in an MNC in Mumbai, earns 12,50,000 per annum. With a standard deduction of 50,000, her gross total income becomes 12,00,000. Under Section 80c, she gets a deduction of 1,50,000 which makes her total income 10,50,000. Her tax calculation will work for both the regimes as shown below:

As of FY 2022-23, there are two tax regimes in India – old and new. As a taxpayer, you can choose any one regime for a financial year after discussing with an expert. In case you want to change your regime, you can opt for it during the next financial year again.

Old regime income tax calculation:

For Samaira, the income tax figure according to the old regime comes out to be 1,27,500 with an added education cess of 4%, making the total payable tax amount 1,32,600.

New regime income tax calculation:

The income tax figure for the new regime comes out to be 1,25,000 with an added education cess of 4%, making the total payable tax amount 1,30,000.

Income tax slabs

New income tax slabs for FY 2022-23

Taxable income

New Tax Regime Rate

Up to Rs. 2,50,000

NIL

Rs. 2,50,001 – Rs. 5,00,000

5% of income above Rs. 2.5 lakh + 4% cess on income tax

Rs. 5,00,001 – Rs. 7,50,000

Rs. 12,500 + 10% of total income above Rs. 5 lakh + 4% cess

Rs. 7,50,001 – Rs. 10,00,000

Rs. 37,500 + 15% of total income above Rs. 7.5 lakh + 4% cess

Rs. 10,00,001 – Rs. 12,50,000

Rs. 75,000 + 20% of total income above Rs. 10 lakh + 4% cess

Rs. 12,50,001 – Rs. 15,00,000

Rs. 1,25,000 + 25% of total income above Rs. 12.5 lakh + 4% cess

Above Rs. 15,00,000

Rs. 1,87,500 + 30% of total income above Rs. 15 lakh + 4% cess


New income tax slabs for FY 2022-23

1. For individuals below age 60

Taxable income

Old Tax Regime Rate

Up to Rs. 2.5 lakhs

NIL

Rs. 2,50,001 – Rs. 5 lakhs

5% of income above Rs. 2.5 lakh + 4% cess on income tax

Rs. 5,00,001 – Rs. 10 lakhs

Rs. 12,500 + 20% of income above Rs. 5 lakh + 4% cess

Above Rs. 10 lakhs

Rs. 1,12,500 + 30% of income above Rs. 10 lakh + 4% cess


2. For individuals between 60 and 80 years (senior citizens)

Taxable income

Old Tax Regime Rate

Up to Rs. 3 lakhs

NIL

Rs. 3,00,001 – Rs. 5 lakhs

5% of income above Rs. 3 lakh + 4% cess on income tax

Rs. 5,00,001 – Rs. 10 lakhs

Rs. 10,500 + 20% of income above Rs. 5 lakh + 4% cess

Above Rs. 10 lakhs

Rs. 1,10,000 + 30% of income above Rs. 10 lakh + 4% cess


3. For individuals aged 80 and above (super-senior citizens)

Taxable income

Old Tax Regime Rate

Up to Rs. 5 lakhs

NIL

Rs. 5,00,001 – Rs. 10 lakhs

20% of income above Rs. 5 lakh + 4% cess on income tax

Above Rs. 10 lakhs

Rs. 1,00,000 + 30% of income above Rs. 10 lakh + 4% cessnt

What are the benefits of filing income tax online?

Filing income tax returns online:

  • Is quick and convenient
  • Allows for faster and electronic tax refunds
  • Facilitates a prompt confirmation receipt and real-time status updates
  • Is confidential and secure
  • Is error-free and saves professional costs
  • Helps with VISA processing, getting insurance, and loan applications
  • Serves as an income and address proof
  • Makes it easy to avoid the late penalty
  • Helps you carry forward losses

Does everyone have to file income tax?

You must file income tax returns if your gross total income for the financial year exceeds the basic exemption limit. For the old regime, the basic exemption limit is:

  • Rs. 2.5 lakh for residents below age 60
  • Rs. 3 lakh for senior citizens (between 60 and 80 years)
  • Rs. 5 lakh for super-senior citizens (80 years and above)

In the new tax regime, the basic exemption is Rs. 2.5 lakh across all age categories.

Additionally, you must file ITR if you have:

  • Deposited more than Rs. 1 crore in current account(s)
  • Spent more than Rs. 2 lakh on foreign travel
  • Incurred more than Rs. 1 lakh on electricity
  • Income in/ assets from/ signing authority in an account in a foreign country
  • Gross total income more than the exemption limit before claiming relevant capital gains exemptions

As per Union Budget 2021, senior citizens above age 75 are exempt from filing ITR for FY 2021-22 if they have only pension and interest income and the two are deposited/ earned in the same bank.

What are the eligibility criteria to file income tax?

Any resident citizen with gross total income above the basic exemption limit must file income tax returns. However, if your total income is less than the taxable limit, you can file a NIL return.

Other entities that file ITR in India are:

  • Hindu Undivided Family (HUF)
  • Associations of Persons (AoPs)
  • Local authorities
  • Corporate firms
  • Charitable/ religious trusts
  • Companies
  • Artificial juridical persons
  • Body of Individuals (BOI)

Depending on the taxpayer, the correct ITR form must be used.

What are the details required for e-filing an income tax return?

For e-filing of income tax return keep the following details and documents ready:

  • PAN, Aadhaar, permanent address
  • Bank account details relevant to the financial year (indicate which account any income tax refund should go to)
  • Form 16 and proofs of interest income, for instance, from FDs
  • Deduction details, pertaining to Section 80C, 80D, and others under Chapter VI-A
  • Proof of tax paid (advance tax, TDS, etc.)

What are the tax exemptions available for salaried individuals?

  • Standard deduction (Rs. 50,000)
  • House Rent Allowance (partial or total)
  • Leave Travel Allowance (for domestic travel)
  • Work-related expenses (telephone bills, meal coupons, 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 approved charitable organisations)
  • 80TTA (savings account interest)
  • Other deductions

These exemptions/ deductions apply to the old regime. Under the new regime only very few allowances and deductions are available.

Frequently asked questions about the income tax calculator

How much income tax should I pay on my salary?

How much income tax you pay on your salary depends on your taxable income and the income tax slab you fall under. Your taxable income is what you get when you subtract the exemptions and deductions from your Gross Total Income, which includes your salary (less HRA, standard deduction, etc., for the old regime) and income from other sources.

The tax slab depends on your taxable income and age and is different for the old and new regime.

How to calculate tax online?

The income tax calculator is a simple online tool that makes your life easy when it comes to tax calculations. You simply have to enter the relevant details in the empty fields:

  • Select gender
  • Enter your annual income
  • Enter the interest paid Home loan
  • Enter the principal repaid on home loan

Your Total Income Tax Benefit will be instantly displayed to the right of the calculator along with your tax payable before Home Loan and after Home Loan.

What is the limit of 80C deduction?

Under Section 80C, you can claim deductions of up to Rs. 1.5 lakh per financial year. However, there is an additional deduction of up to Rs. 50,000 permitted for deposits made to an NPS account.

The Section 80C deduction applies to investments like EPF, PPF, ELSS, and tax saving FD as well as to LIC premiums, home loan principal repayment and more. The limit of Rs. 1.5 lakh is inclusive of subsections like 80CCC, 80CCD(1), and 80CCD(2).

How much tax rebate can I avail on a home loan?

When repaying a home loan, you can claim:

  • Up to Rs. 1.5 lakh per year under Section 80C for principal repayment and stamp duty
  • Up to Rs. 2 lakh per year under Section 24B for interest repayment
  • Up to Rs. 50,000 annually as an additional interest deduction under Section 80EE
  • Up to Rs. 1.5 lakh annually as an additional interest deduction, on home loans taken for affordable housing, under Section 80 EEA

You can benefit from either Section 80EE or 80EEA, hence, the maximum deduction you can claim per year is Rs. 5 lakh (Rs. 1.5 lakh + Rs. 2 lakh + Rs. 1.5 lakh). In case of a joint home loan taken by co-owners, each one can claim tax deductions individually, as per their ownership stake.

What is the maximum limit for tax deduction under section 24?

The maximum tax deduction under section 24B is Rs. 2 lakh per financial year. This deduction is for home loan interest repayment. However, if you fail to purchase/ acquire the home within a period of 5 years, starting from the end of the financial year in which you took the loan, the maximum deduction limit reduces to Rs. 30,000.

What is the maximum non-taxable income for salaried individuals?

Under the old regime, individuals with taxable income up to Rs. 2.5 lakh are exempt from paying income tax. This exemption limit extends to Rs. 3 lakh for senior citizens and Rs. 5 lakh for super senior citizens. Under the new regime individuals from all age groups are exempt from paying income tax if their taxable income is up to Rs. 2.5 lakh.

However, under both regimes, you can claim a rebate of up to Rs. 12,500 under Section 87A if your taxable income does not exceed Rs. 5 lakh. Hence, no income tax may be paid for taxable incomes up to Rs. 5 lakh.

What is an income tax certificate & its importance?

ITR-V or the Income Tax Return - Verification form is the income tax certificate you get when you file your ITR online without adding a digital signature. ITR is important to the IT Department verifying the authenticity of your e-filing.

You can download a PDF version of ITR-V from the official IT Department website, and after printing and signing it you must send it to CPC Bangalore within 120 days of filing your returns online.

How does income tax affect your credit score?

Income tax has no direct effect on your credit score. If you file your ITR, your credit score will not increase. However, your ITR is an important document that can help you get a loan. Once you get a loan, you can make diligent repayment to improve your credit score. So, income tax affects your credit score indirectly.

Disclaimer

The data generated herein is completely and solely based on the information/ details provided by you in response to the questions specified by Bajaj Finserv Limited. These questions and the calculations thereon resulting in specific data are developed and based on certain tools and calculators that are made available to Bajaj Finserv Limited and are based on predetermined presumptions/ assumptions. Such information and the resultant data is provided only for user's convenience and information purposes.

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