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Need to calculate income tax but don’t know how to calculate income tax? We’ll help you with income tax calculation, income tax computation format with an income tax calculator.
Individuals must pay their taxes on any income or profit earned. The income tax calculator helps taxpayers to find their taxable income and total tax amount. It takes into account the deductions and exemptions that can be used under Sections 80C,80D, etc. The calculator finds your tax liability based on your annual income.
An income-tax calculator is an online facility that helps in the calculation of taxes based on a person's earnings and gains. Individuals with taxable profits must pay a percentage of their total annual income in taxes. Income tax can be collected in two ways: at the time of disbursement of a monthly salary, as tax deducted at source, or through the income tax returns website.
Now let's get to know the topic in a detailed manner.
Also Read: GST Portal – India’s Online Tax Office
The Indian income tax system is based on a slab system, and individual taxpayers are taxed accordingly. The term "slab" refers to the varying tax rates applicable to various income levels. To put it another way, the higher your salary, the higher the tax you would pay. Every year, during the budget presentation, these income tax slabs are updated. Again, these slab rates are broken down into various groups for different types of taxpayers.
Wage/Pension Income: This includes basic salary, taxable, search and earnings instead of wages, as well as pensions received by the person who retired himself. Wage and pension incomes are included in the taxable income computation.
Business/Professional Income: This includes real and presumptive business income and professional income which the individuals make as and are added to taxable income following the adjustment of permitted deductions.
Other Revenues: This includes income, including taxable income such as savings accounts interest, fixed deposits (FD), family pensions, etc.
Lottery, Betting, Race Horse Etc. Income: Income of this type is included in total income is put under this category.
Capital Gain: Capital gains arise when gold, house, stocks, securities, mutual fund, etc., are sold. Capital gains on the sale of such assets are categorized as short-term and long-term capital gains, depending on the type of capital assets and the holding period.
House Property Income: An assessor may own one or more house properties. Income from home property includes self occupation, rental or even vacation of these house properties. The rules in this heading describe the manner in which rents from one and more properties for taxable income are to be dealt with.
The Income Tax Calculator assists taxpayers in arranging, planning and legally reducing their financial perquisites. Therefore, every step in your taxable income calculation is important. Meanwhile, on most tax facilitators website, the income tax calculator is already available to offer you a platform for the easy calculation of your taxable income.
It's exhausting to plan one's taxes. It's just become more complicated after the new tax system was implemented. In a matter of seconds, the income tax calculator would help taxpayers measure taxes under both systems and assess which is better for them. As a result, it saves them a lot of time.
The calculator is easy to run. All of a person’s incomes, deductions, and investment data are inputs.
Also Read: Salary Calculator 2020-21 – Take Home Salary Calculator India
Now that we've covered the basics, we can move on to the practical side of things.
After you input all the above information into the income tax calculator, it gives you a summary of your level of income, investment and tax liability. It also shows you total tax payable split into the total tax on your income and the education cess.
Also Read: GST Bill: India’s Biggest Tax Reform
Following are the steps to use the online tax calculator: For Salaried Individuals:
You can quickly know how much income tax you have to pay with this income tax calculator AY2020-21 in a simple click.
Online income tax calculators make calculating your taxes easy and painless, so you don't have to stress about filing them at the last minute. Several life insurance companies and financial planning firms have such calculators on their websites to help you measure your net tax liabilities and deductions, as well as to suggest investment strategies that suit your financial profile, their incentives, and their potential to save you money on taxes. Hope you loved reading the article. Thanks for sharing your valuable time with the article.
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For those whose total income exceeds Rs 2,50,000 the filing of income tax returns is mandatory. It is suggested that you file your income tax return, although your income does not exceed that amount
The employee's overall income over the year is calculated (including income tax, commission, bonus etc.). Next, the employees' declaration on their investments will be made. The investment proof is collected at the end of the yea is the basis for the calculation of the TDS
The amount that you will need for the payment of taxes is to be calculated in advance so that at the time of filing the return, you cannot reserve money. The other benefit is to know whether your taxes are going up or down as compared to the previous year. You will then not need to rush to arrange funds
In three ways the government collects income in tax form: -Voluntary contributions such as advance tax and self-assessment tax. -Tax Deducted from Source (TDS), which is deducted before it is received at the point of origin of your income. -Source tax collected (TCS)
You can easily estimate your tax payment for the year with the help of an income tax calculator. It is an easy, quick and user friendly way to calculate how much your tax liability is and to calculate quickly and accurately
Now you can apply the tax slab for your net income.
