Income Tax Calculator

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 for first-time homeowners
  
• 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.

The maximum tax deduction under section 24 is Rs. 2 lakh per financial year. This deduction is for home loan interest repayment. If you fail to purchase a home within 5 years of taking the loan, the maximum deduction limit drops to Rs. 30,000.

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.

If your taxable income is less than Rs. 5 lakh, you can claim up to Rs. 12,500 under Section 87A under both regimes.

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

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

Income tax has no direct effect on your credit score. If you file your ITR, your credit score will not increase. However, your ITR-V 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. Hence, income tax does affect your credit score indirectly.

According to the Union Budget for 2024-25, taxpayers earning up to Rs. 7.75 lakh per annum do not have to pay any taxes, as they are entitled to a full rebate under the new regime1. You must opt for the new tax regime while filing your income tax returns (ITR) to claim the tax exemption.

Under the new tax regime, the basic exemption limit has been increased to Rs. 3 Lakh and Rs. 2.5 Lakh under the old regime.

Professional tax is a state-level tax in India for individuals earning through professions, trades, or employment. Each state has its rates and rules. It's mandatory for both salaried and self-employed professionals to pay. Employers deduct it from salaries and remit it to the state government. Exemptions exist for specific groups. Non-compliance can lead to penalties. Revenue is used for public services and welfare. Stay informed about your state's regulations to comply and avoid penalties. Visit the official tax department website or consult a tax professional for details.

Gross income refers to the total earnings an individual receives from all sources before any deductions or taxes are applied. It includes all forms of income, such as wages or salary, bonuses, rental income, interest income, dividends, business income, and any other sources of earnings.

To calculate gross income, follow these steps:

1. Determine all sources of income: List down all the different sources of income you have received during the specific period for which you want to calculate your gross income. This may include your salary, bonuses, rental income, interest earned from bank accounts, dividends from investments, etc.
2. Add up the income from each source: Add up the income from each source to get the total earnings before any deductions or taxes.

Saving taxes on a salary of Rs. 20 lakh can be achieved through various tax-saving investments and deductions available under the Indian Income Tax Act. Here are some effective ways to save tax:

1. Use Section 80C: Invest in tax-saving instruments like PPF, EPF, ELSS, NSC, etc., up to Rs. 1.5 lakh to reduce taxable income.

2. Opt for NPS: Get an additional deduction of up to Rs. 50,000 under Section 80CCD(1B) for NPS contributions.

3. Medical insurance premiums: Deduct premiums up to Rs. 25,000 for yourself, family, and Rs. 50,000 for senior citizen parents under Section 80D.

4. Home loan interest: Claim up to Rs. 2 lakh deduction on interest paid for a self-occupied property under Section 24(b).

5. Standard deduction: Enjoy a standard deduction of Rs. 50,000 as a salaried individual.

6. Tax-saver fixed deposits: Invest in 5-year tax-saving fixed deposits for Section 80C benefits.

7. Donations: Get deductions for donations to eligible charitable organizations under Section 80G.

8. House Rent Allowance (HRA): If you rent a house and receive HRA, claim deductions with conditions.

9. Education loan interest: Deduct interest on education loans under Section 80E.

10. Preventive health check-up: Claim up to Rs. 5,000 for health check-ups under Section 80D.

Saving taxes on a salary above Rs. 30 lakh can be achieved by utilizing various tax-saving strategies and investments. Here are some effective ways to save tax:

1. Invest in Section 80C options
2. Contribute to NPS (National Pension System
3. Choose a health insurance
4. If you have a home loan, claim deductions on the interest paid under Section 24(b)
5. As a salaried individual, avail the standard deduction of Rs. 50,000 from your salary income
6. Invest in tax-saving fixed deposits
7. Utilise deductions under Section 80E
8. If you live in a rented house and receive HRA as part of your salary, claim deductions with conditions
9. If you have capital gains from the sale of assets, explore options like investing in tax-saving bonds under Section 54EC or reinvesting in a new residential property under Section 54

In India, certain incomes are not taxable, including:

1. Agricultural Income
2. Interest on Tax-Free Bonds
3. Dividends from Indian companies
4. Long-Term Capital Gains on Equities (up to Rs. 1 lakh)
5. Gifts from specified relatives or on specific occasions
6. Leave Travel Allowance (LTA)
7. Gratuity (up to a specified limit)
8. EPF/PPF Withdrawals (after specific periods)
9. Life Insurance Proceeds
10. Scholarships and Awards for education expenses.
    

Note: Exemption limits and conditions may vary; check the latest tax laws for compliance.

To calculate income tax for a salaried employee in India:

1. Determine gross income
2. Deduct Section 80C investments (up to Rs. 1.5 lakh) and other deductions
3. Arrive at taxable income
4. Apply the applicable tax slab (5%, 20%, or 30%)
5. Add 4% health and education cess
6. Subtract rebates and TDS
7. The result is the final tax payable or refundable

 In India, it is mandatory to file Income Tax Returns (ITR) for individuals with income exceeding the basic exemption limit (Rs. 2.5 lakh for individuals below 60 years). Other cases include foreign assets/income, losses to carry forward, presumptive income, DTAA claims, tax refund claims, and for companies and firms. Voluntary filing is also beneficial for claiming deductions and maintaining financial records.

The new tax regime has been modified to make it more appealing with the following changes:

1. The new tax regime is now the default option. Unless an individual specifically chooses the old tax regime, their income will be taxed according to the new tax slabs and rates.
2. The rebate under Section 87A has been increased from a taxable income of Rs. 5 lakh to Rs. 7 lakh. This means individuals opting for the new tax regime with taxable income up to Rs. 7 lakh will pay no taxes.
3. The basic exemption limit in the new tax regime has been raised to Rs. 3 lakh from Rs. 2.5 lakh.
4. The number of income tax slabs in the new tax regime has been reduced from six to five.
5. A standard deduction of Rs. 50,000 has been introduced for salaried and pensioners under the new tax regime.
6. Family pensioners can now claim a standard deduction of Rs. 15,000 under the new tax regime.
7. The highest surcharge rate of 37% has been reduced to 25% in the new tax regime.

Individuals can file their income tax returns (ITR) annually. The deadline for filing ITR is usually July 31st of the assessment year.

Under the new tax regime in India (Section 115BAC), introduced with reduced income tax rates, certain deductions and exemptions available in the old regime are not applicable. Key exclusions include the standard deduction for salaried individuals, HRA, professional tax deduction, transport allowance, deductions under Chapter VI-A (except for specific sections), LTA, home loan interest deduction (Section 24), and deductions for certain professions.

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

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. 3 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 2024, senior citizens above age 75 are exempt from filing ITR for FY 2024-25 if they have only pension and interest income and the two are deposited/ earned in the same bank.

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.

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.)

• Standard deduction
• 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. The new tax regime offers very few allowances and deductions for taxpayers.