Income Tax Calculator India

What is Income Tax in India?

Income Tax is a crucial direct tax levied by the Government of India on the income of individuals and various entities. It plays a significant role in the nation's revenue generation, funding public services and infrastructure. The legal framework for income tax is primarily governed by the Income Tax Act, 1961. Our online income tax calculator India uses these principles to provide accurate estimations.

The amount of tax you owe is determined by your total income, your age, and the various deductions, exemptions, and rebates that are permissible under the tax laws for a specific financial year. This income tax calculation tool helps you understand these factors.

Who is Liable to Pay Income Tax in India?

In India, income tax is generally imposed on every "person" as defined by the Income Tax Act. This broad definition includes:

• Individuals (both residents and non-residents)
• Hindu Undivided Families (HUFs)
• Companies (Indian and foreign)
• Firms and Limited Liability Partnerships (LLPs)
• Association of Persons (AOP) or Body of Individuals (BOI)
• Local authorities
• Every artificial juridical person

The liability to pay tax arises if your total income during a financial year exceeds the prescribed basic exemption limit. Our income tax eligibility calculator can help determine your tax status.

Old vs. New Tax Regime: Which to Choose for Tax Savings?

From Financial Year 2020-21 onwards, taxpayers have the option to choose between two income tax regimes:

• Old Tax Regime: This is the traditional regime where you can claim various tax deductions and exemptions (e.g., under Section 80C, 80D, HRA, LTA, standard deduction, etc.) to reduce your taxable income. The tax slab rates are generally higher compared to the new regime.
• New Tax Regime: This regime offers lower tax slab rates but comes with the condition that most of the common deductions and exemptions are not allowed. It simplifies the tax filing process for those who prefer not to invest in tax-saving instruments.

Our income tax calculator with old vs new regime comparison helps you compare both regimes to decide which one is more beneficial for your specific income and investment profile, identifying your maximum income tax savings.

Key Components of Income Tax Calculation in India

• Gross Total Income: Sum of income from all sources (Salary, House Property, Business/Profession, Capital Gains, Other Sources).
• Deductions: Amounts allowed to be reduced from Gross Total Income under various sections of the Income Tax Act (e.g., 80C, 80D, 80G, etc.) if opting for the Old Regime.
• Taxable Income: Gross Total Income minus applicable deductions. This is the amount on which tax is calculated.
• Tax Slab Rates: The percentage rates at which income tax is levied, which vary based on income levels and the chosen tax regime. Our tool functions as an income tax slab calculator.
• Rebate under Section 87A: A tax rebate available to resident individuals whose total income does not exceed a certain limit.
• Surcharge & Cess: Additional taxes levied on the income tax payable (surcharge for higher incomes, health & education cess for all).

Benefits of Planning with an Online Income Tax Calculator India

• Accurate Estimation: Get a close estimate of your tax liability well in advance.
• Regime Optimization: Compare tax payable under the Old and New Regimes to choose the more beneficial one.
• Investment Planning: Understand how different tax-saving investments impact your tax outgo.
• Budgeting: Incorporate your estimated income tax liability into your annual financial budget.
• Avoid Surprises: Minimize last-minute tax shocks by proactive income tax planning.

Our tool aims to be the best income tax calculator for salary and other income sources in India, helping you make informed decisions.