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Online Income Tax Calculator: Calculate your Income Taxes for FY 2020-2021

The Union Budget 2020 has left individuals confused with the choice of the tax regime. Both old and new tax regimes require a proper assessment before choosing one. With the help of the income tax calculator, you can gauge the impact of both the tax structures on your income. This calculator will help you estimate your taxes on your income.

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 contents

 

What is the Income Tax Calculator?

Paying tax is inevitable, be it an individual or a business. Income tax is levied on the income earned after considering few deductions. With too many tax exemptions and deductions, calculating tax can be complicated.

An income tax calculator is a tool that will help calculate taxes one is liable to pay under the old and new tax regimes. The calculator uses necessary basic information like annual salary, rent paid, tuition fees, interest on child’s education loan, and any other savings to calculate the tax liability of an individual.

It gives the total tax payable under the old and new scheme. Also, it suggests investment opportunities for the individual based on the tax liability. The online income tax calculator is a convenient tool and is free to use. It is simple to understand and can be used by anyone to calculate their tax liability.

How does an income tax calculator help you?

The income tax calculator is a very useful tool. It helps to calculate a person’s tax liability by considering necessary details like salary, expenses, and investments. Below listed are the benefits of an income tax calculator.

Tax Planning

The Ministry of Finance in its Union Budget 2020 has given a new tax regime along with the existing one. It’s up to the taxpayers to choose which tax regime they will follow. The income tax calculator will help the taxpayers to access which tax regime best suits them. Individuals can plan their taxes accordingly and avail tax benefit. With tax planning, one can easily do their retirement planning as well. The 80C like NPS and SCSS help in retirement planning.

Easy to Use

The calculator is straightforward to use. The inputs are all investor’s income, expenses, and investment details.

Time-Saving

Planning one’s taxes can be very tiring. And with the introduction of the new tax regime, it has only become complicated. The income tax calculator will help taxpayers calculate taxes under both the regimes and let them decide which one is better for them in a matter of seconds. Hence it saves a lot of time for them.

Free to use

One can use the calculator multiple times at free of cost.

How to use Scripbox's income tax calculator?

Scripbox’s Income tax calculator online helps anyone in determining their tax outflow for the years. The online tax calculator requires some data concerning income, investments, and expenses of the taxpayer to calculate taxes online.

Let us now see the step-by-step process of how one can make use of the Scripbox’s Income Tax calculator online.

Step 1: Enter Annual Income

Annual Income

Step 2: Enter Expenses

Here one needs to select whether they are residing in a Metro City or not. Enter Monthly rent paid and rental allowance. Provide children’s tuition fee details,  and value of interest paid on Childs Education loan if any. You also have to select whether you have a home loan or not.

Expenses

Step 3: EPF and Savings

Here a disclosure of the existing investments has to be done.

EPF Savings

Step 4: Calculate

In this step, the calculator calculates the total tax as per the new scheme as well as per the old scheme. Also, it determines how much more needs to be invested for effective tax saving. Furthermore, taxpayers can go back at any step and change the values as required. Additionally, the calculator suggests the best investment options to save tax further.

Calculation

Benefits of Scripbox's Income Tax Calculator

Following are the benefits of Scripbox’s Income Tax Calculator:

  • The calculator helps users try various permutations and combinations of investments and expenses to check the tax-flow.
  • The online tax calculator is completely free. One can calculate their taxes online with Scripbox’s Calculator.
  • Accurate results are computed within seconds.
  • The tax calculator online saves quite an amount of time for users from doing lengthy and time-consuming calculations.
  • Scripbox’s Income Tax Calculator provides investment options for the assessee to save tax further by taking advantage of the deductions.
  • Also, the calculator helps in investment planning.

What are the Sources of Income?

For income tax calculations, income is categorized under the following five categories:

Income from Salary

It is the monthly income one receives for their work from the employer. Usually, the salary component in a payslip includes the following:

  • Basic Salary
  • Dearness Allowance (DA)
  • Gratuity and Annuity benefits
  • Allowance: Medical, Transportation, etc.
  • Any Special Allowance

The total of the above components becomes the Gross Salary of an Employee. Part of the gross salary is subject to taxation after certain deductions.

Income from Business or Profession

It includes the income generated from a business or a professional engagement. This income also becomes part of the taxable income.

Income from Capital Gains

Capital Gains are classified as Short Term Capital Gains (STCG) and Long Term Capital Gains (LTCG). Income from Capital Gains can become tedious to compute at times. The number of transactions and complexity sum up to the effort required to calculate the income. Total sales of all capital assets come under this category.

Income from rent on house property

This mainly consists of rental income received by the taxpayer from the house he let out. In the instance where the assessee resides in the only self-owned house, he is required to compute income from house property. This is usually nil or negative. 

Income from other sources

Income from sources that don’t fall under the above four categories become part of the income from other sources. It usually includes interest income, dividend income, gifts (taxable), etc. These components are tracked from the credit entries in the savings account.

Additionally, interest on cumulative Fixed Deposits (FD) is not credited to a savings account. Therefore, an interest certificate needs to be obtained, although the certificate is required only when TDS is not deducted. Use Scripbox's FD calculator to calculator to calculate interest from FD.

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 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 INR 40,000, which has been again increased in budget 2019 to Rs 50,000. This tax exemption will not be available in case you are opting for the new tax regime.

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

Exemptions not allowed under the new tax regime

Individual or HUF opting for taxation under the newly inserted section 115BAC of the Income Tax 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;
  • Tax 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 existing law);
  • Additional depreciation 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, section 80D, section 80DD, section 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.

Exemptions allowed under the new tax regime

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:

  • Transport Allowance granted to a divyang employee to meet the expenditure for commuting between residence and place of duty
  • Conveyance Allowance granted to meet the expenditure on conveyance in performance of duties of an office;
  • Any Allowance granted to meet the cost of travel on tour or transfer;
  • 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.

Example

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

Particulars Amount Amount
Basic Salary   Rs 1,440,000
House Rent Allowance(HRA) Rs 600,000  
HRA exemption Rs 216,000 Rs 384,000
Special Allowances   Rs 360,000
Standard Deduction   Rs (50,000)
Gross Total Income from Salary   Rs 2,134,000

 

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

In continuation of the above example, suppose Amit invested INR1,20,000 in Public Provident Fund (PPF) and the  LIC premium paid is INR 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 INR 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 2,134,000  
Income from other sources Rs 16,000  
Gross Total Income   Rs 2,150,000
Deductions    
80C Rs 150,000  
80TTA (restricted to Rs. 10,000) Rs 10,000 Rs 160,000
Gross Taxable Income   Rs 1,990,000
Tax on above   Rs 425,880

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

As discussed above, if one is opting for a new tax regime, they will not be eligible for tax deductions. Such as HRA, standard deduction, LTA, chapter VI-A deductions (Public Provident Fund (PPF), LIC, and Equity Linked Savings Scheme (ELSS mutual fund), etc.

Salary for the purpose of the new tax regime

Particulars Amount Amount
Basic Salary   Rs 1,440,000
House Rent Allowance(HRA) Rs 600,000  
HRA exemption Not allowed Rs 600,000
Special Allowances   Rs 360,000
Standard Deduction Not allowed  
Gross Total Income from Salary   Rs 2,400,000

Assuming all other data to be the same, below will be the 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 2,400,000  
Income from other sources Rs 16,000  
Gross Total Income   Rs 2,416,000
Deductions    
80C -  
Gross Taxable Income   Rs 2,416,000
Tax on above   Rs 480,792

Income Tax Deductions & Exemptions

Deductions under the income tax act

Income tax act allows individuals to take certain deductions from the salary. However, only a few sections are eligible for tax deductions. These are covered in chapter VI-A of the Act. These are discussed below:

Deductions under Section 80C

Applicability: Individual & HUF

Maximum Limit: INR 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 policies, principal repayment of a home loan, investment in National Savings Certificate(NSC), investment in Equity Linked Savings Scheme (ELSS mutual fund), children tuition expenses, etc. Also, it includes car loans (four wheeler loan) used for commercial purposes for self employed individuals.

Deductions under Section 80CCC

Applicability: Individual

Maximum limit & coverage: INR 1,50,000 per financial year if the amount is invested in keeping in force any annuity plan of a life insurance company.

Deductions under Section 80CCD(1)

Applicability: Individual (salaried or self-employed)

Maximum limit & coverage: Contribution to National Pension Scheme (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. Also, the National Pension Scheme is one of the popular retirement planning instruments.

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

Deductions under Section 80CCD(1B)

Applicability: Individual (salaried or self-employed)

Maximum limit & coverage: INR 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 INR 2,00,000.

 Deductions under Section 80CCD(2)

Applicability: Contribution made by the employer towards the National Pension Scheme (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).

Deductions under Section 80CCD(2)

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

Deductions under Section 80D

Applicability: Individual & HUF

Maximum limit & coverage:

Deduction of INR 25,000 on medical insurance policies for self, spouse & dependent children.

Additional deduction of INR 25,000 for health insurance policies for parents who are below the age of 60 years.

Deduction of INR 50,000 if both the taxpayer and the parents are above 60 years of age.

The mode of payment should be other than cash.

Deductions under Section 80DD

Applicability: Individual & HUF

Maximum limit & coverage:

Expenditure should be incurred on the medical treatment of a disabled dependent relative.

Where disability is 40% or more but less than 80% – deduction allowed is INR 75,000.

Where disability is 80% or more – deduction allowed is INR 1,25,000

Deductions under Section 80E

Applicability: Individual

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

What are the tax slabs in India?

Income tax rate under the old regime are:

Income tax slab rates for HUF and Individuals below 60 years

Annual Income Tax Rates
Up to INR 2.5 lakhs NIL
INR 2,50,001 – INR 5 lakhs 5% + 4% cess on income tax
INR 5,00,001 – INR 10 lakhs 20% + 4% cess on income tax
Above INR 10 lakhs 30% + 4% cess on income tax

 

Income tax slab rates for senior citizens who are 60 years and above but below 80 years

Annual Income Tax Rates
Up to INR 3 lakhs NIL
INR 3,00,001 – INR 5 lakhs 5% + 4% cess on income tax
INR 5,00,001 – INR 10 lakhs 20% + 4% cess on income tax
Above INR 10 lakhs 30% + 4% cess on income tax

 

Income tax slab rates for super senior citizens who are 80 years and above

Annual Income Tax Rates
Up to INR 5 lakhs NIL
INR 5,00,001 – INR 10 lakhs 20% + 4% cess on income tax
Above INR 10 lakhs 30% + 4% cess on income tax

 

Income tax slab rates under new regime are:

Income tax slab rates for HUF and Individuals below 60 years

Annual Income Tax Rate(New Scheme)
Up to INR 2,50,000 Nil
INR 2,50,001 to INR 5,00,000 5%
INR 5,00,001 to INR 7,50,000 10%
INR 7,50,001 to INR 10,00,000 15%
INR 10,00,001 to INR 12,50,000 20%
INR 12,50,001 to INR 15,00,000 25%
Above INR 15,00,000 30%

 

Income tax slab rates for senior citizens who are 60 years and above but below 80 years

Annual Income Tax Rate(New Scheme)
Up to INR 2,50,000 Nil
INR 2,50,001 to INR 5,00,000 5%
INR 5,00,001 to INR 7,50,000 10%
INR 7,50,001 to INR 10,00,000 15%
INR 10,00,001 to INR 12,50,000 20%
INR 12,50,001 to INR 15,00,000 25%
Above INR 15,00,000 30%

 

Income tax slab rates for super senior citizens who are 80 years and above

Annual Income Tax Rate (New Scheme)
Up to INR 2,50,000 Nil
INR 2,50,001 to INR 5,00,000 5%
INR 5,00,001 to INR 7,50,000 10%
INR 7,50,001 to INR 10,00,000 15%
INR 10,00,001 to INR 12,50,000 20%
INR 12,50,001 to INR 15,00,000 25%
Above INR 15,00,000 30%

 

How is TDS calculated on salary?

TDS or Tax Deducted at Source is the amount which is deducted from an individual’s income by a company on behalf of the Income Tax department and later deposited to the Income Tax department. TDS can be calculated by following these steps.

  • Calculate monthly gross income. This includes basic, allowances, and perquisites received in a month.
  • The next step is to calculate the tax exemption under Section 10 of The Income Tax Act.
  • Deduct the tax exemption from gross income.
  • Since the above is the monthly income, multiply it by 12 to calculate the yearly taxable income.
  • The next step is to add all other incomes and deduct losses. For example, incomes like rental income, interest income, and losses in trading or transacting.
  • Calculate investments that fall under Chapter VI-A of The Income Tax Act. An example of investments eligible for deductions under 80C is Public Provident Fund (PPF), Equity Linked Savings Scheme (ELSS Mutual Fund), Fixed Deposits (FDs), ULIPs SSY, Senior Citizen Savings Scheme , car loan (four wheeler loan) taken for business purpose etc. This amount has to be deducted from gross income.
  • Now the resulting figure is the total taxable income. The tax slabs according to age and income have to be applied to calculate taxes or TDS on the income.

TDS is usually calculated on basic salary plus allowances. After deducting all the allowances and deductions, TDS is calculated by the employer on the gross salary. They do not consider any other income or losses. The tax liability is distributed throughout 12 months. The individual will receive a salary post TDS.

How much tax should I pay on the salary?

The amount of tax payable depends on the annual income and tax scheme one chooses. Tax laws divide taxpayers into different groupings as per their taxable income. The grouping is called income-tax slabs.

Income Tax Slab 2019-20
Income range per annum Tax Rate as per Old Regime Tax Rate as per New Regime
Upto Rs 2.50 Lakh No Tax No tax
Rs 2.50 Lakh – Rs 5 Lakh 5% 5%
Rs 5 Lakh – Rs 7.50 Lakh 20% 10%
Rs 7.50 Lakh – Rs 10 Lakh 20% 15%
Rs 10 Lakh – Rs 12.50 Lakh 30% 20%
Rs 12,50,000 – Rs 15,00,000 30% 25%
Above Rs 15,00,000 30% 30%

One can use the Scripbox’s Income Tax calculator at the top of the page to calculate their tax liability on the salary earned.

Does everyone have to file their income tax returns?

Yes, it is mandatory for everyone to file income tax return. However, a taxpayer whose net taxable income is less than the minimum tax slab, i.e., INR 2.5 lakh is exempted from mandatory tax filing.

It is mandatory for a taxpayer who wants to claim tax refunds of TDS deducted to file income tax returns. Even though tax filing isn’t mandatory for some individuals, it has some benefits.

  • Claim Tax refunds: For any TDS that has been deducted can be claimed only by tax filing.
  • Applying for a loan: While applying for a loan, the eligibility and the loan amount sanction depends on the assessee income. The tax filing documents are processed for this.
  • Carry forward of Losses: The taxpayer can always carry forward the losses to set them off against capital gains. However, this is only allowed if one is filing their taxes for the assessment year.

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

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

  • 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 Fixed Deposits (FDs), and other investments.
  • Deduction claimed under Chapter VI-A proof like LIC receipt, investment, health insurance policies.
  • Tax paid proof like advance tax paid challan, TDS forms.

 

Frequently Asked Questions