The term “income tax” refers to a tax imposed on individuals or organizations (taxpayers) in relation to the profits or income they have earned (commonly referred to as “taxable income”).A tax rate multiplied by the taxable income is typically used to calculate income tax.Rates of taxation can vary depending on the taxpayer’s characteristics and income. You might also be interested in learning more about GST.
How does the Income Tax Calculator work?
After the Union Budget is presented, an easy-to-use online tool called the Income tax calculator can assist you in estimating your taxes based on your income.How do I use the Income tax calculator for FY 2022-23 (AY 2023-24)? We have updated our tool to reflect the proposed changes to the income tax in the Union Budget 2022-23.
The steps for using the tax calculator are as follows:
1.Select the fiscal year for which you wish to have your taxes calculated.
2.Make your age choice accordingly.Age groups in India have different tax obligations.
- Select “Go to Next Step.”After deducting various exemptions like HRA, LTA, standard deduction, and so on, enter your taxable salary.If you want to know how much you’ll have to pay in taxes under the old tax brackets, just enter your salary, which is your salary without any exemptions like HRA, LTA, standard deduction, professional tax, etc.if you want to know how much you’ll have to pay in taxes under the new tax slabs)You are required to enter additional information in addition to your taxable salary, such as interest income, rental income, interest paid on a home loan for a rented property, and interest paid on a loan for a self-occupied property.
4.Enter the net income (Sale consideration less Cost of Acquisition) for Income from Digital Assets. This income is taxed at 30%, plus any applicable surcharge or cess.
5.Re-click “Go to Next Step.”
6.If you want to use the old tax brackets to figure out your taxes, you’ll need to put in your tax-saving investments under sections 80C, 80D, 80G, 80E, and 80TTA.
7.To calculate your tax obligation, select “Calculate.”You will also be able to see a comparison of your tax obligations before and after the budget (old tax slabs versus new tax slabs).
Note:You can enter “0” in any field that does not apply to you.
What kinds of deductions and exemptions are not allowed under the new tax system?
The following exemptions and deductions are not available to individuals or HUFs who choose taxation under the newly added section 115BAC of the Act:
(i) A travel allowance for leave, as specified in clause (5) of Section 10;
- ii) The allowance for housing costs outlined in clause 13A of Section 10;
(iii) A portion of the allowance outlined in section 10’s clause 14;
(iv) The allowances provided to MPs and MLAs in section 10’s clause 17;
- v) The allowance for a minor’s income described in clause 32 of Section 10;
- vi) The section 10AA exemption for SEZ units;
vii) Section 16’s standard deduction, entertainment allowance, and employment/professional tax deductions;
viii) Interest in self-occupied or vacant property, as defined in sub-section (2) of Section 23, subject to Section 24.Loss under the heading “income from house property for the rented house” cannot be offset under any other heading, but it can be carried forward in accordance with existing law.
- ix) Additional deprecation in accordance with clause (iia) of subparagraph (1) of section 32;
- x) The deductions allowed by sections 32AD, 33AB, and 33ABA;
(xi) Various deductions for donations to or expenditures for scientific research outlined in sub-clause (ii), (iia), or (iii) of section 35’s sub-section (2AA);
xii) A deduction allowed by section 35AD or 35CCC;
xiii) Under clause (iia) of Section 57, a deduction from the family pension;
xiv) Any deduction made in accordance with chapter VIA (for instance, sections 80C, 80CCC, 80CCD, 80D, 80DD, 80DDB, 80E, 80EE, 80EEA, 80EEB, 80G, 80GG, 80GGA, 80GGC, 80IA, 80-IAB, 80-IAC, 80-IB, etc.).However, the employer contribution on behalf of the employee in the notified pension scheme deduction under sub-section (2) of section 80CCD and the new employment deduction under section 80JJAA can both be claimed.