Plan Tax Savings Calculator

Income Tax Calculator - Calculate Taxes for FY 2020-21

Calculate how much income tax you need to pay using this tax saving calculator from Scripbox. It is an easy-to-use online tax calculator that helps you get an estimate of how much tax you need to pay based on your income. The calculator uses the latest income tax slab calculations.

STEP 1 OF 4

What is your annual income?

Do you have the below expenses?


Do you have a home loan?

What is your monthly Employee Provident Fund contribution?

Are you saving in the following?

You don't have to pay tax as per your current salary.

Table of Content

What is the Income Tax Calculator?

After the Union Budget was presented by Nirmala Sitharaman on 1st February 2020, most of the salaried individuals started evaluating the impact of the new slab rates on their current salary structure. To ease this process for them, we are providing the updated income tax calculator incorporating the proposed changes. The income tax calculator will help you estimate your taxes on your income.

How to Calculate Income Tax in FY 2020-21?

Let’s start with the basics here. For a salaried employee, the monthly payslip describes the various components of one’s salary. Have a look at your payslip. You will find that your total salary is the sum total of Basic Salary + HRA + Transport Allowance + Special Allowance + Any other allowance. Income Tax Act provides various exemptions from salary like house rent allowance, leave travel allowance, etc.

Further, budget 2018 also introduced the concept of standard deduction of Rs. 40,000 which has been again increased in budget 2019 to Rs 50,000. This exemption will not be available in case you are opting for the new tax regime.

Before we move to the calculation part, it is important to know that if you are opting for the new tax regime, many exemptions are not allowed to be claimed.

Individual or HUF opting for taxation under the newly inserted section 115BAC of the Act shall not be entitled to the following exemptions/deductions:

  • Leave travel concession as contained in clause (5) of section 10;
  • House rent allowance as contained in clause (13A) of section 10;
  • Some of the allowance as contained in clause (14) of section 10;
  • Allowances to MPs/MLAs as contained in clause (17) of section 10;
  • Allowance for the income of minor as contained in clause (32) of section 10;
  • Exemption for SEZ unit contained in section 10AA;
  • The standard deduction, the deduction for entertainment allowance and employment/professional tax as contained in section 16;
  • Interest under section 24 in respect of self-occupied or vacant property referred to in sub-section (2) of section 23. (Loss under the head income from house property for the rented house shall not be allowed to be set off under any other head and would be allowed to be carried forward as per extant law);
  • Additional deprecation under clause (iia) of sub-section (1) of section 32;
  • Deductions under section 32AD, 33AB, 33ABA;
  • Various deduction for donation for or expenditure on scientific research contained in sub-clause (ii) or sub-clause (iia) or sub-clause (iii) of sub-section (1) or sub-section (2AA) of section 35;
  • Deduction under section 35AD or section 35CCC;
  • Deduction from family pension under clause (iia) of section 57;
  • Any deduction under chapter VIA (like section 80C, 80CCC, 80CCD, 80D, 80DD, 80DDB, 80E, 80EE, 80EEA, 80EEB, 80G, 80GG, 80GGA, 80GGC, 80IA, 80-IAB, 80-IAC, 80-IB, 80-IBA, etc). However, deduction under sub-section (2) of section 80CCD (employer contribution on account of the employee in notified pension scheme) and section 80JJAA (for new employment) can be claimed.

Following allowances shall be allowed as notified under section 10(14) of the Act to the Individual or HUF exercising option under the proposed section:

  1. Transport Allowance granted to a divyang employee to meet the expenditure for the purpose of commuting between place of residence and place of duty
  2. Conveyance Allowance granted to meet the expenditure on conveyance in performance of duties of an office;
  3. Any Allowance granted to meet the cost of travel on tour or on transfer;
  4. Daily Allowance to meet the ordinary daily charges incurred by an employee on account of absence from his normal place of duty.

Now that we have discussed the above, we can move onto the practical aspect of the same. We will be calculating the total income and income tax on the same should you choose to go with either the old tax regime or the new tax regime.

Amit receives a Basic Salary of Rs. 1,20,000 per month. House Rent Allowance is Rs. 50,000 per month and Special Allowance of Rs. 30,000 per month. Amit lives in Bangalore and pays a rent of Rs. 30,000 per month. Below is what Amit’s taxable salary would look like:

Particulars Amount Amount
Basic Salary Rs 14,40,000
House Rent Allowance(HRA) Rs 6,00,000
HRA exemption Rs 2,16,000 Rs 3,84,000
Special Allowances Rs 3,60,000
Standard Deduction Rs (50,000)
Gross Total Income from Salary Rs 21,34,000

To calculate income tax, we need to club the income from other sources such as capital gains, business, and other sources together.

In continuation of the above example, suppose Amit invested 1,20,000 in PPF and paid an LIC premium of 30,000.

To keep things easier, let us assume that Amit did not have any other income and his savings bank account generated an interest of Rs. 16,000. His gross total income will be calculated as below.

Computation of Gross taxable income of Amit(old tax regime)

Particulars Amount Amount
Income from salary Rs 21,34,000
Income from other sources Rs 16,000
Gross Total Income Rs 21,50,000
Deductions
80C Rs 1,50,000
80TTA (restricted to Rs. 10,000) 10,000 Rs 1,60,000
Gross Taxable Income Rs 19,90,000
Tax on above Rs 4,25,880

Continuing the above example, let us calculate the income tax on Amit’s income as per the new tax regime.

As discussed above, if you are opting for a new tax regime, deductions such as HRA, standard deduction, LTA, chapter VI-A deductions(PPF, LIC, ELSS funds), etc. would not be allowed as an exemption.

Salary for the purpose of the new tax regime

Particulars Amount Amount
Basic Salary Rs 14,40,000
House Rent Allowance(HRA) Rs 6,00,000
HRA exemption Not allowed Rs 6,00,000
Special Allowances Rs 3,60,000
Standard Deduction Not allowed
Gross Total Income from Salary Rs 24,00,000

Assuming all other data to be the same, below will be the income tax payable by Amit under the new tax regime:

Computation of Gross taxable income of Mr. Amit (new tax regime)

Particulars Amount Amount
Income from salary Rs 24,00,000
Income from other sources Rs 16,000
Gross Total Income Rs 24,16,000
Deductions
80C -
Gross Taxable Income Rs 24,16,000
Tax on above Rs 4,80,792

Components of Income Tax Calculator

Following are the components of the income tax calculator

What is your annual income?

Enter your gross annual income without reducing any deductions, exemptions, professional tax and so on.

Do you have the below expenses?

Now you need to enter the details of your expenses like monthly rent paid, monthly HRA received, annual tuition fees of children and interest paid on education loan

Do you have a home loan?

If you have a home loan, select ‘Yes’ or else click on ‘Next’

If you have a home loan enter the details of the loan taken, like lone amount, EMI, duration and EMI start year.

What is your monthly Employee Provident Fund Contribution?

Enter your month EPF amount

Are you saving in the following?

Declare your saving details like LIC premium, PPF, tax saving mutual funds, PPF, tax saving FD, NPS, health insurance premium.

Once you have entered all the relevant details, click on ‘Calculate’ and you will be shown your total tax under the new scheme and old scheme. You can also know how much more to invest and your effective tax after investment.

Income Tax Deductions & Exemptions

Deductions under the income tax act

Income tax act allows individuals to take certain deductions from the salary. These are covered in chapter VI-A of the act. These are discussed below:

Section 80C

Applicability: Individual & HUF

Maximum Limit: Rs. 1,50,000 in a financial year provided investments are made in certain financial instruments.

Instruments covered: Public Provident Fund(PPF), Employees’ Provident Fund(EPF), the premium paid towards life insurance, principal repayment of a home loan, investment in National Savings Certificate(NSC), investment in Equity Linked Savings Scheme(ELSS funds), children tuition expenses, etc.

Section 80CCC

Applicability: Individual

Maximum Limit & coverage: Rs. 1,50,000 per financial year if the amount is invested to keep in force any annuity plan of a life insurance company.

Section 80CCD(1)

Applicability: Individual(salaried or self-employed)

Maximum limit & coverage: Contribution to NPS is allowed as a deduction from gross total income. The maximum deduction available in the case of salaried employees is 10% of the salary (basic +DA, but excluding all allowances & perquisites) and for self-employed individuals, up to 20% of the gross total income.

The maximum limit is Rs. 1,50,000 in a given financial year.

Section 80CCD(1B)

Applicability: Individual(salaried or self-employed)

Maximum Limit & coverage: Rs. 50,000 will be allowed as a deduction over and above the contribution claimed under section 80CCD(1). This effectively increases the total deduction under section 80CCD to Rs. 2,00,000.

Section 80CCD(2)

Applicability: Contribution made by the employer towards NPS of the employee. Applicable only to salaried individuals

Maximum Limit & coverage: Maximum deduction available to the extent of 10% of salary(basic+DA). Deduction under this section is available over and above section 80CCD(1).

Section 80CCD(2)

The aggregate amount of deductions under section 80C, section 80CCC and section 80CCD(1) shall not, in any case, exceed Rs. 1,50,000.

Section 80D

Applicability: Individual & HUF

Maximum Limit & coverage:

  • Deduction of Rs. 25,000 on medical insurance of self, spouse & dependent children.
  • Additional deduction of Rs. 25,000 for insurance of parents who are below the age of 60 years.
  • Deduction of Rs. 50,000 if both the taxpayer and the parents are above 60 years of age.
  • The mode of payment should be other than cash.

Section 80DD

Applicability: Individual & HUF

Maximum Limit & coverage:

  • Expenditure should be incurred on the medical treatment of a handicapped dependent relative.
  • Where disability is 40% or more but less than 80% - deduction allowed is Rs. 75,000.
  • Where disability is 80% or more - deduction allowed is Rs. 1,25,000

Section 80E

Applicability: Individual

Maximum Limit & coverage: Interest paid on education loan is allowed as a deduction up to 8 years beginning from the year in which the individual starts paying the loan.

Frequently Asked Questions on Income Tax

What is the maximum non-taxable income limit in India?

For a taxpayer, tax is not levied for an income up to Rs. 2.5 lakh in a financial year. Additionally, a full tax rebate u/s 87A is allowed to a taxpayer if income is less than Rs. 5 Lacs

How much tax should I pay on the salary?

The tax liability of a taxpayer depends on the income tax slab he or she belongs to depending on the age of the taxpayer.

Income tax slab for a taxpayer below 60 years of age

Income tax slab Applicable tax rate
Up to Rs 2.50 lakh Nil
Above Rs 2.50 lakh and up to Rs 5 lakh 5%
Above Rs 5 lakh and up to Rs 7.5 lakh 10%
Above Rs 7.5 lakh and up to Rs 10 lakh 15%
Above Rs 10 lakh and up to Rs 12.5 lakh 20%
Above Rs 12.5 lakh and up to Rs 15 lakh 25%
Above Rs 15 lakh 30%

Example

Mr. Aman has a net taxable income of Rs 11 lakh after deductions and exemptions. The tax liability will be calculated as follows.

Income tax slab Net income Applicable tax rate Tax
Up to Rs 2.50 lakh Nil Nil Nil
Above Rs 2.50 lakh and up to Rs 5 lakh Rs 2.5 lakh 5% Rs 12,500
Above Rs 5 lakh and up to Rs 7.5 lakh Rs 2.5 lakh 10% Rs 25,000
Above Rs 7.5 lakh and up to Rs 10 lakh Rs 2.5 lakh 15% Rs 37,500
Above Rs 10 lakh and up to Rs 12.5 lakh Rs 1 lakh 20% Rs 20,000

Hence, the total tax payable for Mr. Aman will be Rs 95000 (excluding cess)

Does everyone have to file their income tax returns?

The income tax return is mandatory to be filed by every taxpayer. However, a taxpayer whose net taxable income is less than the minimum tax slab i.e. Rs 2.5 lakh is exempted from mandatory filing.

It is mandatory for a taxpayer who wants to claim a refund of TDS deducted to file income tax returns.

What are the details required when e-filing income tax returns?

Following details are required to e-filing income tax returns:

  • Basic details like PAN, Aadhar card details, permanent address
  • Details of all the bank accounts held in the financial year. Among these banks account, in which bank account refund amount (if any) must be credited
  • Income earned proof like Form-16, interest earned on FDs and other investments
  • Deduction claimed under Chapter VI-A proof like LIC receipt, investment, health insurance
  • Tax paid proof like advance tax paid challan, TDS forms

Is taxable income the same as an income tax?

No, the taxable income is the income derived after deducting all the deductions and exemptions from the annual gross income. The tax rate will be based on the applicable income tax slab rate. This tax rate is multiplied with the net taxable income and the resultant will be the payable income tax.

Existing Text New Text
Annual Income Gross Annual Income (Before reducing deductions and exemptions)
Monthly Rent Monthly Rent Paid
Monthly House Rent Allowance
Tuition Fees of Children Annual Tuition Fees of Children
Interest Paid on Education Loan in the FY Interest Paid on Education Loan in the FY
Loan Amount Total Loan Amount
Home EMI Home EMI
Loan Duration Loan Duration
EMI Start Year EMI Start Year
Monthly Employee PF Amount Monthly Employee PF
Life Insurance Premium for self Life Insurance Premium for self
PPF Annual PPF
Tax Saving Mutual Funds Tax Saving Mutual Funds
National Savings Certificate National Savings Certificate
Tax saving bank FD Tax saving bank FD
NPS Investment (Voluntary) NPS Investment (Voluntary)
Health Insurance Premium for self spouse & children(up to Rs. 25K) Health Insurance Premium for self spouse & children(up to Rs. 25K)
Health Insurance Premium for parents(Rs. 50K for Senior Citizens, Rs.25K otherwise ) Health Insurance Premium for parents(Rs. 50K for Senior Citizens, Rs.25K otherwise )