Income Tax is the measure of a taxable amount you are subject to pay as tax contingent depending on tax slab based on your income. During computation, your final taxable income is determined by applying the tax rates in power during the financial year. Final tax amount to be paid is calculated after deducting taxes effectively paid by the method for TDS/TCS or Advance tax. It is perfect for an individual to compute the income tax payable before filing it. One can use various online income tax calculator offered by different sites. This activity keeps you away from any last-minute changes or any item forgotten to include when filing income tax returns.
How to Calculate Income Tax Online for Salaried Person:
Total Taxable Income from a salaried person is determined after all deductions. For example, HRA, LTA exemption, etc. It is a decent good to see salary credited message every month consistently for all your hard work, however you get disappointed when looking into your pay slip showing huge deduction towards tax. So how would you maintain a strategy for reduction of tax amount from your salary?
Any income that is received by an individual is taxable under the head Income from Salaries. The principal thing one has to know is the income tax slab you fall under. Second thing is to present their investment proofs for that fiscal year so that an individual can get benefits of deducting income tax from your salary. By declaration in advance, you do not need to experience the long procedure for filing an income tax return and getting a refund from the Income Tax Department for the excess paid.
Online Income Tax Calculator:
Your salary includes your Gross salary, Provident Fund, Insurance, Gratuity, Leave pay, Employee State protection and Labor Welfare Fund. Many online calculators will assist you in computing your income tax. We have come across one of the great user-friendly income tax calculator that you can use for your assessment of your income tax. Here I will give an overview of it.
Gross salary is the amount paid by your employer before deduction of income tax or any other deduction from your salary. Gross salary is the entirety of Basic pay + Dearness recompense + transport remittance + House Rent Allowance + uncommon stipend + other remittance. Here in the above image, you can enter your annual salary before deduction. Once you enter your annual salary as your basic information, you will be proceeded ahead to declare your investments for an income tax deduction. You never have to worry or remember the income tax sections for deduction; they have a great user interface with lots of information. You can see that in the below image.
You can claim deduction under section 80C of income tax act up to the specified limit for the current financial year by the government of India. Here you can claim investments like Provident Fund, Life Insurance Premium, Equity Linked Savings Scheme, Home Loan regularly scheduled payment, Unit Linked Insurance Plan, Pension Funds, Infrastructure Bond, Tuition charges, National Savings Certificate and more.
Under Section 80D, you can claim the insurance premium paid for spouse, self and dependent children up to the limit specified by the government of India for that fiscal year.
Under Section 10(13A), you can claim for HRA deduction. Also, under section 24 of Income Tax Act, you can claim interest on home loan. While you have your very own house, you cannot claim for deductions of home loan interest and rent at the same time. However, few people do claim both when living in their own homes. If you are staying with your parents, then they show that they are paying rent on house to their parents and claim the HRA. The other case is the point at which you have your very own home, yet you remain in a rented place away from your home. You would then be able to claim HRA and home loan interest both at the same time.
Apart from these above sections, there are many other sections for deduction of income tax. For example, section 80E for interest on an educational loan, section 80TTA for interest income, section 80DD for deduction under disabled dependent, section 80DDB
for deduction of medical expenditure towards self or dependent relatives, Section 80G for deduction of any donation you have made during the financial year and more.
Here we have understood how to calculate income tax for salaried person. In addition, we have understood how to use the online income tax calculator from one of the examples. This income tax calculator will assist you towards quick and easy access to compute your income tax for the current financial year.