1. BASIC DETAILS

Which Assessment Year do you want to calculate taxes for?

Your Age

2. INCOME DETAILS

Taxable Annual Salary

Salary after reducing Exemptions (HRA, LTA) & Professional tax.

Annual income from interest

Includes interest from Savings Bank, Deposits & Other interest.

Interest paid on Loan

Interest paid on housing loan taken for rented/let-out property.

Rental Income Received

Annual Rent received on let-out property.

Interest paid on Home Loan

Interest paid on Housing loan taken for Self Occupied property.

3. DEDUCTIONS

Basic Deductions 80C

Amount invested/paid in tax saving instruments such as PPF, ELSS Mutual Funds, LIC Premium, etc.

Interest from Deposits 80TTA

Amount of interest income on deposits in savings account (Includes Fixed/Recurring Deposit interest in case of Senior Citizen).

Medical Insurance 80D

Medical Premium & preventive health checkup fees paid for Self & Family including Parents.

Donation to Charity 80G

Amount paid as donation to charitable institutions or certain recognized funds.

Interest on Educational Loan 80E

Amount of interest paid on Loan taken for Higher Education.

Interest on Housing Loan 80EEA

Amount of interest paid on Housing Loan sanctioned during selected FY.

TAXES TO BE PAID

FY[]

Amount

Total Income

Total Deduction

Total Tax Payable

An Income Tax is a taxation that is imposed on an individual or business by the Government on the income the former generate. In our country, Income Tax is monitored and administered by the Central Board of Direct Taxes (CBDT) under the Ministry of Finance.

STEPS TO FILE INCOME TAX

Follow the steps below to file your Income Tax:
  • Sign up or register on incometaxindiaefiling.gov.in 
  • Your PAN number as your User ID
  • View your Tax Credit Statement. Note that your TDS certificate needs to tally with the figures in your statement
  • Now, click on Income Tax return form
  • Select your Financial Year
  • Download the ITR form which is applicable to you
  • Fill in the necessary details using your TDS certificate in the excel attached
  • Click Calculate Tax
  • Make the payment and fill up the details in the challan
  • Click on ‘validate’ and confirm the details 
  • An XML file will be generated 
  • Save the XML file
  • Now Click on ‘Upload Return’ and upload your XML file 
  • A window will pop up where you will be needed to sign the file digitally
  • If you have digital signature, then select ‘yes’, otherwise ‘no’
  • This will generate the ITR Verification form (ITR-V)
  • Take a print out of the same and sign it in blue ink
  • Post the form through speed post or ordinary post within 120 days of online submission of your Income Tax Filing to the following address:
Income-Tax Department-CPC, Post Bag No.1, Electronic City Post Office, Bengaluru – 560100, Karnataka.

DOCUMENTS REQUIRED TO FILE INCOME TAX RETURN

The following are the essentials for Income Tax Returns:
  • Your PAN number, AADHAR Card details, and Current address
  • All Bank account details of the selected Financial Year
  • Proofs of income (salary slips, Fixed Deposits, Savings Account, etc.)
  • The deductions claimed under section 80 
  • Details of payments of TDS and advanced tax

Income Tax Calculator

An Income Tax Calculator is an online calculation tool which helps in summing up the amount of tax an individual needs to pay. The calculation is done on the basis of the budget proposed by the Union. 

How to Calculate Income Tax? 

To calculate tax, you can use the easy online Income Tax Calculator tools. Follow the steps provided below to calculate your tax liability:
  1. Select the financial year of which you wish to calculate the tax
  2. Select your age group
  3. Click ‘Go to Next Step’
  4. Put in your salary that is taxable (taxable salary is the salary which is the amount left after deducting exemptions like HRA, LTA, etc.)
  5. Now enter the other necessary details like interest income, rental income, etc.
  6. Once again, Click on ‘Go to Next Step’
  7. Now input your taxation saving investments under the following sections:  80C, 80D, 80E, 80G, and 80TTA
  8. Click on ‘Calculate’, and your taxation liability will be displayed

Illustration

To understand how to calculate tax liability, a quick example is as follows. Say, Dipak works in an IT Firm and receives a basic salary of Rs. 50,000. He also receives a House Rent Allowance of Rs. 25,000 and a Special Allowance of Rs. 13,000 per month. He lives in a rented house in Mumbai by giving a rent of Rs. 20,000. He also receives a Leave Travel Allowance of Rs. 20,000 per annum. So the structure of Dipak’s income is as follows:

Nature Amount Deduction Taxable
Basic Salary Rs. 6,00,000 (P.A.) Rs. 6,00,000
House Rent Allowance Rs. 3,00,000 Rs. 1,80,000 Rs. 1,20,000
Leave Travel Allowance Rs. 20,000 Rs. 12,000 (after the submission of bill) Rs. 8,000
Special Allowance Rs. 1,56,000 Rs. 1,56,000
Gross Total Rs. 8,34,000
NOTE: You can also calculate the HRA component on any HRA calculator tool available online.  Income Tax calculation includes incomes one receives from several sources. Incomes generated from salary from employer, rental income/interest paid on home loan, incomes that generate from purchase or sale of shares, income from business/freelancing, interest from savings account, fixed deposits, or bonds, are all must be incorporated in the Income Tax calculation.  In our example already mentioned above, Dipak receives an income from his savings account, which amounts to Rs. 8,400; interest from his FDs which is Rs. 10,000 in the whole of a given year. To save his Income Tax, Dipak has some investments like PPF (Rs. 50,000) and has also purchased ELSS of Rs. 20,000 (in a year). He also has a LIC premium of Rs. 8,000 and a medical insurance of Rs. 12,000. These investments help Dipak in claiming deductions in his Income Tax under the following sections:
Nature Deduction (Max.) Valid Investments Amount Claimed
Section 80C Rs. 1,50,000 PPF deposit (Rs.50,000) ELSS (Rs. 20,000) LIC Premium (Rs. 8,000) EPF (12%) which gets deducted by his employer (Rs. 72,000) Rs. 1,50,000
Section 80D Rs. 25,000 (self) Rs. 50,000 (parents) Medical Insurance (Rs. 12,000) Rs. 12,000
Section 80TTA Rs. 10,000 Interest from Savings Account  (Rs. 8,400) Rs. 8,400
So, now we have to calculate Dipak’s Gross Taxable income after including the deductions he gets from his tax saving investments:
Nature Amount Total
Income generated from Salary Rs. 8,34,000
Income generated from other sources Rs. 18,400
Gross Total of Income generated (Salary+others) Rs. 8,52,400
Deduction under Section 80C Rs. 1,50,000
Deduction under Section 80D Rs. 12,000
Deduction under Section 80TTA Rs. 8,400 Rs. 1,70,400
Total Taxable Income Rs. 6,82,000
In India, Income Taxation is calculated based on tax slab. After making deductions like the above, deductions of taxes already paid and Tax Deducted at Source (TDS), the remaining taxable income is then taxed at the proposed slab rate.  TAX SLAB: 
Gender
Taxable Income Rate of Taxation
Upto Rs. 2,50,000 Exemption from tax
Rs. 2,50,000 to Rs, 5,00,000 5%
Rs. 5,00,001 to Rs. 10,00,000 Rs. 12,500+20% of income exceeding Rs. 500,000
Above Rs. 10,00,000 Rs. 1,12,500+30% of income exceeding Rs. 10,00,000
Senior Citizen
Taxable Income Rate of Taxation
Upto Rs. 3,00,000 Exemption from taxation
Rs. 3,00,001 to Rs. 5,00,000 5%
Rs. 5,00,001 to Rs. 10,00,000 Rs.10,000+20% of income exceeding Rs. 500,000
Above Rs. 10,00,000 Rs. 1,10,000+30% of income exceeding Rs . 10,00,000
Very Senior Citizen
Taxable Income Rate of Taxation
Upto Rs. 5,00,000 Exemption from taxation
Rs. 5,00,0001 to Rs. 10,00,000 20%
Above Rs. 10,00,000 Rs. 1,00,000+30% of income exceeding of Rs. 10,00,000
So, as per the tax slab, Income Tax for Dipak’s taxable income will be as follows:
Taxable Income Tax Rate Amount
Up to Rs. 2,50,000 Exemption from Taxation 0
Rs. 2,50,000 to Rs. 5,00,000 5% 12,500
Rs. 5,00,001 to Rs. 10,00,000 20% 36,400
Above Rs. 10,00,000 30% 0
Cess 4% of Total Tax [4%(Rs. 12,500+Rs36,400)] 1,956
Total Income Tax Rs. 12,500+Rs.36,400+Rs.1,956 Rs. 50,856
Thus, Dipak’s Income Tax would be Rs. 50,856. NOTE: The Union Budget for FY2019-20 has proposed full tax rebate for income up to Rs. 5,00,000 under section 87A.  Glossary: Tax Deduction Section?  Below is a detailed list of the sections (already aforementioned) that aids in deductions of Income Tax.  Section 80C: Under this section, one can claim a deduction up to Rs. 1,50,000 under certain payments or investments one makes. This section also incorporates four subsections. The following investments are eligible for this section:
  • Life Insurance
  • Sukanya Samriddhi Yojana
  • Public Provident Fund (PPF)
  • Equity Linked Saving Scheme (ELSS)
  • Five Year Bank Deposits
  • Stamp Duty and Registration Charges
  • Senior Citizens Saving Scheme
  • National Savings Certificate
  • Home Loan Principal Repayment 
Section 80D: This section allows an individual to avail deductions by paying premium towards a government-issued policy of health insurance. Policies for self, spouse, and dependent children can help in deductions too. Under this section, a maximum of Rs. 100,000 can be claimed.  Section 80E: Under this section, an individual can avail deductions when he gets an approved loan from a certified financial or charitable institution for his or her ward’s higher education. However, one must note that the institution which is giving them the loan is permitted for tax benefits. The maximum amount that can be deducted under this section is Rs. 3 lakhs.  Section 80G: Under this section, tax deductions can be availed on the funds that has been donated to a charitable institution. The limit of this deduction is dependent on the following factors:
  • 100% deductions without limit- Donations made to National Defence Fund, National Illness Assistance Fund, Prime Minister’s Relief Fund, etc.
  • 100% deductions with qualifying limits: donations to family planning and sports development organisations.
  • 50% deductions without limits: Donations to Prime Minister’s Drought Relief Fund, Rajiv Gandhi Foundation, etc.
  • 50% deductions with qualifying limits: Donations to Places of Local authority or religious institutions. 

Income Tax Calculator FAQs:

1. How much tax must I pay on my salary?

The taxation rate of a particular year depends on the Tax slab. The Tax slab gives out the details of rate of taxation based on various age groups. There are three categories in total, Individual below 60 years of age, Senior Citizen, and Very Senior Citizen. Check out the tax slab given in the above article to calculate your share of tax liability.

2. Does the Income Tax Calculator calculate the TDS?

No, the Income Tax Calculator will only calculate your tax liability and not the Tax Deducted at Source (TDS).

3. Who has to file Income Tax Returns?

People having an income within the exemption limit (below Rs. 1.25 lakhs) are not required to file for Income Tax Returns. Otherwise it is compulsory to file for an Income Tax Return.

4. What is an Income Tax Return?

Income Tax Return is a file format given by the Income Tax Department in which the figures of the income generated is used to calculate the tax liability. It is compulsory for every individual or businesses (apart from the group mentioned in the above question) to file the Income Tax Return before the date specified by the Income Tax Department every year.

5. What is a Financial Year?

Financial Year is the year in which an individual or a business earns an income. Say, the financial year for 2019-20 is from 1 st April 2019 to 31 st March 2020. The assessment of the Income Tax filing is done in the year that follows. Therefore, for the financial year 2019-20, the assessment year will be 2020-2021.