An income tax calculator is a specially designed online tool to help individuals with tax calculations. The tax calculators provide information related to the income, exemptions, deductions and display income tax liability.
This particular tool
provides an overall estimation of individuals’ taxable income once they provide
the essential details. With such knowledge at hand, individuals can plan their
taxes correctly. Hence, individuals can follow the simple steps of using the income tax calculator
FY 2020-21 to determine their payable tax amount.
The process to use the calculator
- Individuals
need to select their age bracket, and this will figure out the applicable
tax band
- In the
next step, they need to input their annual salary. Individuals can also
include all the bonuses and variable components.
The evaluation of income
tax in India is based on applying different tax rates to separate income
groups. For the calculation of income tax, accurate annual taxable income is
estimated based on the Income Tax Act provisions.
The taxation amount
primarily falls on the income tax slabs that change from year to year and are
separated according to an individual's age, gender, and income. Hence, it is noted,
the new tax regime of income tax slab for AY 2021-22 is the same for all
categories of individuals.
Income tax rates for senior citizen:
●
Individuals do not have to pay tax for annual
income of up to Rs.2.50 lakh
●
For Rs.2,50,001- Rs.5,00,000 – 5% tax
●
For Rs.5,00,001- Rs.7,50,000 – 10% tax
●
Rs.7,50,001-10,00,000 – 15% tax
●
Rs.10,500,001- Rs.12,50,000 - 20%
●
Rs.12,500,001- Rs.15,00,00 – 25%
●
Above Rs.15,00,000 – 30%
The income tax rate for a salaried individual:
●
Individuals do not have to pay a tax of up to
Rs.2,50,000
●
For Rs.2,50,001- Rs.5,00,000 – 5%
●
Rs.5,00,001- Rs.10,00,000 – 20%
●
Rs.10,00,000 or above – 30%
Hence, these are the tax
rates calculated on the income tax calculator FY 2020-21 based on the tax slab.
Also, individuals can avail various tax deductions under different sections
mandated by the Income Tax Act, and they are:
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Tax deductions
under different sections:
Section 80C – This section offers deductions from investments in
PPF, NSC and other instruments. Additionally, up to Rs.1.5 lakh deduction is
available on home loan principal repayment.
Section 80CCC – This particular section deducts tax on investment in
pension funds of up to Rs.1.5lakh.
Section 24 – One of the significant subtractions under this section
is the home loan deduction of up to Rs.2 lakh on interest payment.
Hence, these are the ways
of tax savings and benefits offered by home loans and other segments.
Also, another tactic of
tax exemption is by claiming a deduction for an under-construction property. A
deduction of Rs.1.5 lakh can be claimed towards the principal amount. However,
it is to be kept in mind that this exemption benefit can only be availed if the
housing loan payments are made in the pre-construction phase. Individuals can
calculate the tax by using the online tax calculator and evaluate stamp duty
and registration charges for tax exemption.
Hence, to avail of these
benefits, individuals can consider some reputed HFCs who extend home loan tax benefits with attractive
pre-approved offers to expedite and simplify the loan application process.
These offers are available on other financial products besides home loans, such
as loan against property and more. One can check their pre-approved offer by
inputting their name and contact details.
