ITRTaxation

Easy Guide to Income Tax Calculator for FY 2020-21 for Individuals

Income tax is due every year for all the individual taxpayers in India. While the due date has been extended till 30 September 2021, it is never too early to know your tax liability. Calculate your income tax easily using our tool.

An income tax calculator is an online tool that helps you calculate the amount of estimated taxes you are required to pay in a financial year.

If you are an Indian tax-payer and are looking to calculate how much income tax you are required to pay, then do check out our income tax calculator

How to Use the Income Tax Calculator

Using the calculator, follow these steps 

  • Choose the financial year for which you want your taxes to be calculated
  • Select your age, as tax liability differs based on an individual’s age group.
  • Click on next
  • Here, enter your taxable salary i.e. the salary you get after factors such as HRA, LTA, the standard deduction are deducted. Follow this step if you want to know your tax liability under the old slabs
  • You can also enter your salary without deductions if you want to know your tax liability under the new slabs
  • Besides this, enter details such as interest income, rental income, interest paid on the home, loan for rented property, and interest paid on home loan for self-occupied property
  • Click on next 
  • If you are looking to calculate your income tax under the old slab, then enter your tax-saving investments under Sections 80C, 80D, 80G, 80E, and 80TTA of the Income Tax Act, 1961
  • Click on Calculate to get your tax liability 
  • Do note that the income tax calculator does not calculate TDS, but calculates tax liability
  • You can even enter your registered email address to get your tax computation via email

KNOW MORE ABOUT INCOME TAX CALCULATOR

How is Income Tax Calculated?

Income tax is calculated based on the applicable tax slab. Your taxable income is worked out after making relevant deductions, the resultant taxable income will be taxed at the applicable slab rate.

The following income tax slab rates are notified in the Old Tax Regime:

Individuals aged below 60years

Income

Tax Rate

Upto ₹ 2.5 lakhs Nil.
₹ 2.5 to ₹ 5 lakhs 5%
₹ 5 lakhs to ₹ 10 lakhs ₹ 12,500 + 20% of Income exceeding ₹ 500,000.
Above ₹ 10 lakhs ₹ 1,12,500 + 30% of Income exceeding of ₹10,00,000.

Senior citizen(aged 60yrs to 80yrs)

Income Tax Rate
Upto ₹3,00,000 Nil.
₹ 3,00,001 to ₹ 5,00,000 5%
₹ 5,00,001 to ₹ 10,00,000

₹10,000 + 20% of Income

exceeding ₹ 500,000.

Above ₹ 10,00,000 ₹ 1,10,000 + 30% of Income exceeding of ₹10,00,000.

Super senior citizen(aged above 80yrs)

Income Tax Rate
Upto ₹ 5 lakhs Nil.
₹ 5 lakhs to ₹ 10 lakhs 20%
Above ₹ 10 lakhs ₹ 1,00,000 + 30% of Income exceeding of ₹10,00,000.

The Union Budget 2019-20 has proposed full tax rebate for income up to ₹5 lakhs u/S. 87A.

The following income tax slab rates are notified in New Tax Regime: 

Income Tax Rate
Upto ₹2.5 lakhs Nil
₹2.5 to ₹5 lakhs 5%
₹5 lakhs to ₹7.5 lakhs ₹12,500 + 10% of Income exceeding ₹500,000.
₹7.5 to ₹10 lakhs ₹37500 + 15% of total income exceeding ₹7,50,000
₹10 lakhs to ₹12.50 lakhs ₹75000 + 20% of total income exceeding ₹10,00,000
₹12.5 to ₹15 lakhs ₹125000 + 25% of total income exceeding ₹12,50,000
Above ₹15 lakhs ₹187500 + 30% of total income exceeding ₹15,00,000

Exemptions Under the New Tax Regime

An individual or a Hindu Undivided Family (HUF) opting for tax deduction under the newly-inserted Section 115BAC of the Income Tax Act is not entitled to the following exemptions:

  • Leave travel concession 
  • House rent allowance
  • Some of the allowance as contained in Clause (14) of Section 10
  • Allowance to MPs and MLAs under Clause 17 of Section 10
  • Allowance for the income of a minor in case of Clause 32 of Section 10
  • Exemption for SEZ units contained under Section 10AA
  • The standard deduction, the deduction for entertainment allowance, and employment/professional tax as contained in Section 16
  • Interest under Section 24 in respect of self-occupied or vacant property referred to in Section 23(2) 
  • Additional depreciation under clause (iia) of Section 32(1)
  • Deductions under Sections 32AD, 33AB, 33ABA
  • Various deduction for donation for or expenditure on scientific research contained in sub-clause (ii) or sub-clause (iia) or sub-clause (iii) of sub-section (1) or sub-section (2AA) of Section 35
  • Deduction under Section 35AD or Section 35CCC
  • Deduction from family pension under clause (iia) of Section 57
  • Any deduction under chapter VIA (like Section 80C, 80CCC, 80CCD, 80D, 80DD, 80DDB, 80E, 80EE, 80EEA, 80EEB, 80G, 80GG, 80GGA, 80GGC, 80IA, 80-IAB, 80-IAC, 80-IB, 80-IBA, etc). However, deduction under sub-section (2) of Section 80CCD (employer contribution on account of the employee in notified pension scheme) and Section 80JJAA (for new employment) can be claimed

Furthermore, the following allowances are permitted as notified under Section 10(14) of the Income Tax Act of 1961 to the Individual or HUF exercising option under the proposed section

  • Transport allowance granted to a divyang employee to meet the expenditure to commute between the place of residence and place of duty
  • Conveyance allowance granted to meet the expenditure on conveyance in performance of duties of an office
  • Any allowance granted to meet the cost of travel on tour or transfer
  • Daily allowance to meet the ordinary daily charges incurred by an employee on account of absence from his normal place of duty.

Maximum Non-Taxable Income Limit

An individual has a maximum limit set at ₹2.5 lakh. Individuals can also get a ₹12,500 rebate under Section 87A of the Income Tax Act if the income is less than ₹5 lakh per annum for the financial year 2019-20. This means that under the new income tax slab, an individual earning less than ₹5 lakh per annum will not be required to pay income tax. If you have invested ₹1.5 lakh in tax-saving instruments under Section 80 C of the Income Tax Act, then you will not have to pay tax till ₹6.5 lakh.

Who Has to File ITR?

If your income is less than the basic exemption limit, then you are not required to pay income tax. However, if you have an income of less than ₹2.5 lakh and want to claim a refund, you will have to do so by filing your ITR. Otherwise, filing ITR is mandatory.

The easiest way to get your income tax filing done is through Vakilsearch. You don’t have to worry about keeping up to date with all the changes or get confused as to which regime to pick. Reach out to us and our experts will guide you and file the returns for you.

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