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The government of India has extended the last date for ITR filing to September 30th, however, especially because of the new reforms introduced by the Union Budget earlier this year, it is not advised to wait until closer to the day. Filing returns could seem like a daunting and annoying task to begin with but an income tax calculator can make the job so easy to do!
In this article below we shall discuss what is an income tax calculator and how an income tax calculator can help you while filing your Income Tax returns.
Page Contents
What Is An Income Tax Calculator?
An income-tax calculator can be defined as an online tool that aids in the calculation of taxes depending on a person’s income from salary. Individuals who fall into the taxable income category must pay tax on a part of their net annual income in each financial year. The calculator not only makes the task easy but is also simple-to-use and up to date with the most recent income tax salary rates and laws.
How Does An Income Tax Calculator Help Individuals File Income Tax return?
Income tax is levied on all of your earnings over the course of a financial year. Income earned in the form of a salary, as well as income from other sources, are included in your tax calculation. The calculation of exemptions and deductions is another aspect of income calculation.
Income Tax calculation may be difficult for most people and so, calculating income tax online with the help of an appropriate online tool would be the best thing to do. But how does it help? Mentioned below is how an Income Tax calculator can help you.
1. Helps You Find The Correct Tax Regime
In its Union Budget of 2021, the Ministry of Finance introduced a new tax regime in addition to the existing one. It is the taxpayers’ choice to decide which tax system they will adhere to. The income tax calculator will assist people in determining which tax system is most appropriate for them.
2. Allows You To Enter Basic Details To Calculate Your Taxes
An income tax calculator is an online tool that utilizes simple and crucial information to assist you in calculating taxes online. You can enter information about your income from rent payments, premium payments, education expenditures, any interest paid on student loans, on the online income tax calculator. Thus, you can calculate and pay your income tax online by entering some basic information on the income tax calculator.
3. Helps Save Energy And Time
Calculating and paying income tax may be stressful and time-consuming. It has only gotten more difficult with the implementation of the new tax system. An income tax calculator will help taxpayers calculate taxes under both systems and determine which is preferable for them. As a result, it saves a significant amount of time and energy.
4. Easy And Free To Use
Most online income tax calculators are simple to use and completely free, making the job quick, easy and stress-free.
How To Calculate Income Tax
To calculate income tax for the fiscal year 2020-21 (AY 2021-22), you’ll need to keep certain information in mind.
- The monthly income received from an employer is considered the principal income source in an income tax calculator for salaried persons
- Basic salary, dearness allowance, medical and transportation allowances, gratuity benefits, annuity benefits, and other special allowances are generally included in an individual’s gross income. After deductions, a portion of this gross income is taxable under income tax
- If you choose to stick with the previous tax system, the Income Tax Act provides a number of exemptions that the tax deduction calculator will take into account, such as housing rent allowance, leave travel allowance, etc.
- The standard deduction was initially implemented in the 2018 budget, which included Rs. 40,000 deduction. In the 2019 budget, this amount was increased to Rs. 50,000. In the current tax regime, none of these deductions are available.
List of Tax Exemptions That Are Not Allowed In The New Tax Regime
When you choose the new tax regime, you should be aware that numerous deductions and exemptions that a person or HUF can claim will no longer be available in the new tax computation. These are some of the exemptions that you will no longer be eligible to if you opt to calculate total income under the newly introduced section 115 BAC of the Income Tax Act:
- HRA (House Rent Allowance) as defined in section 10 clause 13A of the IT Act
- Leave travel allowance/concession as defined in section 10 clause 5 of the IT Act
- Allowances for minors’ earnings, as defined in clause 32 of section 10 of the IT Act
- Standard deductions, employment or professional tax deductions, and entertainment deduction allowances as mentioned under section 16 of the IT Act.
- Any deductions allowed under Chapter VIA (like section 80C, 80CCC, 80CCD, section 80D, section 80DD, section 80DDB, 80E, 80EE, 80EEA, 80EEB, 80G, 80GG, 80GGA, 80GGC, 80IA, 80-IAB, 80-IAC, 80-IB, 80-IBA, etc).
Final Words
Taxpayers have the option of choosing between the two regimes this year. The major objective of the new tax regime is to make personal tax calculations and payments as simple as possible. After you’ve calculated your income, use an online income tax calculator to determine and file income tax returns. This will assist you in determining which tax regime will provide you with the most benefits.
FAQS
1. Should everyone file income tax returns?
No, you are not obliged to submit income tax returns if your income is below the basic exemption amount. Those with an income of less than Rs 2.5 lakh who wish to seek an income tax refund can do so by submitting an ITR. However, if your income exceeds the basic exemption level, you must file income tax returns.
2. When is the last date to file income tax returns?
The Central Board of Direct Taxes (CBDT) has extended the deadline for filing ITR for FY 2020-21, that is, to provide relief to all taxpayers (AY 2021-22). The last date to file your income tax is 30th September 2021. The decision was made, due to the impact of the second wave of the pandemic.
3. How is Income Tax deducted from my salary?
The amount of Income Tax deducted from your wage is determined by your tax bracket and whether you choose the old or new tax system. After deducting any relevant deductions, the taxable income will be calculated.
Your tax calculator under old Tax Regime and New Tax regime is very useful. Unfortunately, ITD’s NEW WEBSITE FOR EFILING ITR continues to suffer number of technical glitches. We are waiting for resolution by ITD .
Best wishes
I have filed ITR 20/21 on 30/07/2021 but verification have not been done due to system failure, still it is so. How the same can be resolved
The portal continues to have glitches. ITR-1 Form cannot be submitted as it is detecting one error. More specifically, it says ” The total receipt / tax paid have to be shown in respective headings”
In the final preview of the form, I find the amounts have been automatically calculated and, indeed, duly reflected under respective heads.
Kindly look into this problem.
The portal continues to have glitches. ITR-1 Form cannot be submitted as it is detecting one error. More specifically, it says ” The total receipt / tax paid have to be shown in respective headings”
In the final preview of the form, I find the amounts have been automatically calculated and, indeed, duly reflected under respective heads. This glitch has not been addressed so far.
Kindly look into this problem.
Thanks for providing information about tax calculator.
Your articles on latest income tax rules are great helpful to individual taxpayers.