Paying income tax is mandatory for individuals who cross a pre-set threshold. The Indian Government charges tax at a pre-decided percentage on the income earned by businesses and individuals during a financial year.
Moreover, in the last year’s union budget, the Government introduced a new tax regime, which will co-exist with the old one. Resultantly, calculating this liability has become more challenging. In this regard, an income tax calculator can be of great help.
Step by step guide to using Income Tax Calculator for FY 2022-23
An income tax calculator is an online tool that allows individuals to pay taxes depending on their income. Individuals whose income falls within the bracket of taxable income are liable to pay a particular percentage of their overall yearly income as tax.
By using this handy online tool, individuals can get a fair estimation of the amount that they need to pay as income tax from their salary and associated income.
How to use an income tax calculator?
To start using an online calculator like this, one needs to enter his/her personal information and then go on to mention other details. Here is the step-wise procedure on how one can use this online calculator and know their exact income tax payment –
Step 1: Input annual income- Here, individuals need to input income details obtained under different income heads such as capital gain, salary, rent from house property, income from deposits or investments and other taxable income.
Step 2: Enter exemptions- Submit the exemption details applicable against the earned income during a financial year. Such tax exemptions are applicable against lent-out property, salary and self-occupied property.
Step 3: Tax deductions- Input the deduction details applicable under Section 80 (C), expenses and investments, education loan, health insurance, NPS etc.
Step 4: Necessary details- Input your age and payment of taxes during a financial year. Your age will determine the payable tax amount.
Step 5: Tax breakdown- In the final step, after submitting the necessary details, this online tool evaluates the overall tax as per the new and old regime. After that, it presents a detailed break up of your tax liability that your need to fulfil.
Why use an income tax calculator?
Using an income tax calculator helps to compute the tax burden for a particular financial year and helps to complete the payment without fail. Also, this instrument is pivotal for tax planning as it allows the assessee to plan and pay advance tax if required depending on his/her income and expenses.
Apart from that, accuracy is another significant factor why one should use these online devices. They help to compute the tax liability without any mistake and almost instantly.
A point to remember here is that paying income tax on time is imperative as the ITR acts as valuable income proof. It helps individuals while applying for a loan or any other services where presenting income proof is mandatory.
Additionally, prospective loan applicants, especially the property loan ones, can now use a stamp duty calculator to check the applicable charges on their property and pay them to avoid any legal issues. An income tax calculator can be a helpful tool for managing business finances by allowing you to estimate your tax liability and plan your cash flow accordingly. Moreover, keeping a property free from any legal disputes in necessary to obtain various mortgage loan options.
Moreover, leading financial institutions are now extending pre-approved offers to streamline the loan application process. These offers are available on financial products like loan against property, home loans, etc. Individuals can check their pre-approved offers by submitting their essential contact information.
Must Read: know the quick process to avail LAP Loan
To help prospective borrowers further, leading financiers also extend eligibility calculators where they can calculate home loan eligibility and apply accordingly. It will lower the chance of rejection and help individuals to secure credit without any hassle.
Additionally, LAP and home loan calculators can aid borrowers opting for these credit facilities to compute their repayment in advance. Once they enter the fundamentals of a loan, i.e. principal, interest and tenor, they can find the total outstanding, total interest outgo and EMIs, which will aid in loan repayment planning. While an Income Tax Calculator can estimate your tax burden, it cannot account for the tax implications of different trading strategies.
Paying income tax is mandatory, and avoiding it can have serious implications. Nonetheless, in current times, individuals can easily compute their tax liability with an income tax calculator in advance and pay accordingly.
Benefits of an income tax calculator
Before filling income tax return, individuals need to register to the government’s official website and use income tax India log in ID to file their return.
Moreover, there is no requirement to send the acknowledgement manually to the IT department. Instead, after individuals input their ITR log in, the IT department conducts e-verification in multiple ways that successfully complete the process.
However, the calculation of income tax can be challenging for some people. Hence, before filling the exact tax amount to the department, individuals can use an online device like this and also avail its other benefits mentioned below:
Pick the best tax regime
As per Union Budget, individuals can select between the old and new tax regimes. With the help of this calculator, individuals can get a fair idea about the tax amount and get maximum tax exemptions, deductions and benefits.
Save time
For income tax calculation, this online calculator is an effective option and allows borrowers to calculate the overall tax liability as per new and old regimes in a simple and faster way.
Input minimal information
This calculator requires basic information and allows borrowers to calculate tax online. Individuals need to input information related to salary, educational expenses, rents etc. An Income Tax Calculator can estimate your tax liability, consider exploring “Investing Tips” to further reduce your tax burden through strategic investments like those allowed under Section 80C. By submitting this basic information, one can understand the tax liability and evaluate income tax online within a few minutes.
Free of Cost
Taxpayers can find this income tax calculator on the Income Tax department’s website free of cost. However, accessing this does not require one to complete income tax login India.
Moreover, knowing the exact tax amount beforehand will help borrowers to estimate exact the tax exemptions that they can claim when applying for a home loan.
Besides, individuals can also find pre-approved offers extended by leading financial institutions on a wide range of financial products such as home loan, loan against property etc. These exclusive offers ensure accelerated loan application procedure and reduce the hassle of documentation. Therefore, check your pre-approved offers by mentioning your name and contact information.Thus, individuals can use an income tax calculator to get an accurate calculation and pay taxes on time without any errors. Besides, it allows borrowers to save both money and time.