Income Tax Calculator
Calculate Your Income Tax
What is Income Tax?
Income Tax is a tax imposed by the government on an individual's income. The amount of tax you pay is based on your annual income and applicable tax slabs. The Income Tax Department categorizes taxpayers into different groups based on age and income, with specific tax slabs for each category. The tax liability can be reduced through various deductions and exemptions available under the Income Tax Act.
How Does the Income Tax Calculator Work?
The Income Tax Calculator helps you estimate your tax liability based on the following parameters:
- Annual Income: The total income you earn in a financial year.
- Deductions: The deductions you claim under various sections such as 80C, 80D, etc.
- Age: Your age category, as different tax slabs apply to individuals below 60, between 60 and 80, and above 80 years.
- Tax Regime: The choice between the old tax regime (with deductions) and the new tax regime (without deductions).
The calculator considers these factors to compute your taxable income and the tax payable.
Benefits of Using an Income Tax Calculator
- Quick Calculations: The calculator provides instant results, helping you plan your finances better.
- Accurate Estimates: It offers accurate estimates of your tax liability, allowing you to make informed decisions about investments and savings.
- Comparison of Tax Regimes: The calculator allows you to compare the old and new tax regimes, helping you choose the best option for your financial situation.
Frequently Asked Questions (FAQ)
1. What is the difference between the old and new tax regimes?
The old tax regime allows taxpayers to claim deductions and exemptions under various sections, while the new tax regime offers lower tax rates but does not allow most deductions and exemptions. Taxpayers can choose the regime that suits them best.
2. How do I know which tax regime to choose?
You can use the Income Tax Calculator to compare the tax liability under both regimes. The old regime may be more beneficial if you have significant deductions, while the new regime may be better if you have fewer deductions.
3. What are some common deductions I can claim under the old regime?
Under the old regime, common deductions include Section 80C (for investments in PPF, EPF, etc.), Section 80D (for health insurance premiums), and Section 24(b) (for home loan interest), among others.
4. Can I switch between the old and new tax regimes every year?
Salaried individuals without business income can switch between the old and new tax regimes every financial year. However, those with business income can switch only once in a lifetime unless they cease to have business income.