The Income Tax Act, 1961 in India comprises sections covering several income sources and expenses that need to be calculated for tax payers. Further this Act offers several exemptions and deductions that are meant to provide relief to taxpayers under different sections.
Usually, the rules and regulations of the Income Tax Act are lengthy and tedious, making it difficult for taxpayers to calculate their income tax liability. This is why it is wise to use an income tax calculator.
Steps to use an income tax calculator
The income tax calculator considers various factors, such as payments, expenses, investments, to determine the overall payable amount on the income under the new or old taxation system. Based on the taxation regime, factors and tax slabs on income will differ.
Following are the steps of using this calculator:
- Firstly, individuals need to select their age bracket
- Enter details of your income earned from different sources. Such as interest amount from deposits, rent from property. Capital gain and several other taxable incomes.
- Enter exemption details, such as home loan tax exemption under Section 80 (C) and Section 24 (B) on self-occupied or let-out property.
- Input details regarding income tax rebate on home loan available under Section 80 (C). Different expenses and investments, NPS, education loan, health insurance etc.
- Finally, enter basic details like taxes paid during the financial year and other details that will help determine the payable tax.
Besides, borrowers must also know the home loan tax benefit to ensure saving more on their loans. This calculator evaluates the payable amount as per both old and new regimes. Moreover, it also allows borrowers to know how much they need to invest to save tax effectively.
Usually, an income tax calculator requires necessary information like annual salary, tuition fees, child’s education loan interest amount, paid rent, and other essential savings to calculate an individual’s tax liability. This online calculator is a convenient and free tool that anyone can utilise to understand their tax liability.
Benefits of using an income tax calculator
This online calculator is very easy to use as it helps to maximise the tax savings and advantages offered by home loans. Following are some of the essential benefits of this calculator.
- This calculator helps taxpayers to choose the tax regime that will suit their financial affordability. With the help of this tool one can effectively plan their taxes. And avail income tax benefits on a home loan or for any other purposes.
- Using this calculator one can save valuable time as it helps taxpayers to compute tax amounts. Under new and old regimes and further help them decide which one is best suited for them.
- This income tax calculator helps individuals try different permutations and combinations of investments and expenses to check the flow of tax.
Reputed financial institutions offer income tax calculators on their official websites to allow borrowers to calculate tax without hassle. Thus, individuals willing to avail a home loan from leading HFCs must also check out this beneficial online tool to save substantially on tax amount.
Furthermore these leading HFCs also extend pre-approved offers on a suite of financial products. Reducing the hassle of documentation and loaning procedures. Debtors can check their pre-approved offers by submitting their essential credentials.
Thus, individuals can figure out different tax expenses through this income tax calculator. These online tools consider various pointers to determine the actual tax liability of an Indian or non-Indian resident.