Paying tax is inevitable, be it for an individual or a business. Tax is levied on the income earned by an individual or business after certain deductions. Due to multiple income tax slab rates combined with many tax exemptions and deductions, calculation of income tax can be a challenging task. Not with the presence of an easy-to-use online income tax calculator, though!
Table of Contents
- 1 – What is the income tax calculator?
- 2 – How to use Fisdom’s income tax calculator?
- 3 – Income tax rates as per tax slabs – FY 2022-23
- 4 – Income tax rebate
- 5 – Surcharge and cess
- 6 – Exemptions on income tax allowed under the new tax regime
- 7 – Who should file ITR and how can one submit an income tax return?
What is the income tax calculator?
An online income tax calculator is an automated tool designed to help taxpayers calculate their liability as per the tax regime laid out by the Income Tax Department in India. This calculator has integrated basic information such as annual salary, tuition fees, rent paid, interest on a child’s education loan, and savings, if any. This information allows the calculator to provide near-accurate tax liability estimates to the user.
Fisdom’s online income tax calculator is an easy-to-use tool and is available free of cost. It can be used by anyone looking to calculate their tax liability as per latest tax laws applicable in the ongoing financial year.
How to use Fisdom’s income tax calculator?
Fisdom’s online income tax calculator helps one to easily determine the tax outflow for the latest financial year, as per the old and the new tax regime. The calculator requires users to input certain data on income, investments, and expenses to estimate the taxes payable.
Here is the step-by-step process to use Fisdom’s income tax calculator:
- From the drop-down under the ‘Assessment Year’ section, select the assessment year for which you wish to calculate income tax.
- Select the ‘Age Category’ from:
- Below 60
- 60 or above
- 80 or above
This will determine your income tax rate in the old tax regime, hence it is important to select the right option.
- Under the ‘Income’ category:
- Enter gross salary (annual excluding any deductions)
- Enter annual income from other sources (if applicable)
- Annual income from interest
- Annual income from let-out property (if any)
- Annual interest paid on a home loan for self-occupied property
- Annual interest paid on home loan (while living in rented property)
- Under the HRA exemptions, mention:
- Basic salary received – annual
- Monthly dearness allowance (if it forms part of your income)
- HRA / house rent allowance received – annual
- Total rent paid – annual
- Also, select ‘YES/NO’ depending on whether you reside in a metro city or non-metro city
- Under the Deductions section, you will see a note stating the maximum deduction as per old and new tax regime. Here,
- Enter Basic deduction as per Section 80C
- Contribution to NPS/ National Pension Scheme – if any,
- Medical Insurance premium – if applicable
- Donation to Charity – if made during the financial year
- Interest on education loan – if applicable
- Interest on deposits in savings account
Income tax rates as per tax slabs – FY 2023-24
The Union Budget 2023 revised the new tax regime to be the default regime, effective from April 1, 2023. The old tax regime is, however, still available for taxpayers to use and it retains the benefit of exemptions and deductions. Under the new regime, the income tax slabs are the same for all taxpayers, irrespective of their age and gender. Thus, senior citizens between the ages of 60 and 80 and super senior citizens over 80 years of age will pay the same taxes as individuals under the age of 60.
|Old Tax Regime||New Tax Regime|
|Tax Slab (Rs. )||Old Tax Rates||Tax Slab (Rs. )||New Tax Rates|
|0 – 2.5 lakh||0%||0 – 3 lakh||0%|
|2.5 lakh – 5 lakh||5%||3 lakh – 6 lakh||5%|
|5 lakh – 10 lakh||20%||6 lakh – 9 lakh||10%|
|10 lakh & above||30%||9 lakh – 12 lakh||15%|
|–||–||12 lakh – 15 lakh||20%|
|–||–||15 lakh & above||30%|
Income tax rebate
As per the new income tax regime for FY 2023-24 (AY 2024-25), the rebate under Section 87A has been increased from Rs. 5 lakhs to Rs. 7 lakhs. Thus, individuals with a net taxable income of up to Rs. 7 lakh can avail tax rebate u/s 87A under the new tax regime. Those who choose to pay tax as per the old regime will be able to avail rebate as per the earlier limit of Rs. 5 lakhs.
Surcharge and cess
Finance minister announced changes to surcharge applicable for highest taxpayers. The table below summarises surcharge rates as per old and new regime:
|Income||Old Regime||New Regime|
|Above Rs. 50 Lakhs and up to Rs. 1 Crore||10%||10%|
|Above Rs. 1 Crore and up to Rs. 2 Crores||15%||15%|
|Above Rs. 2 Crores and up to Rs. 5 Crores||25%||25%|
|Above Rs. 5 Crores||37%||25%|
Apart from this, the Health and Education cess at 4% is levied on the income tax plus surcharge (if applicable) amount.
Exemptions and deductions
Refer to the table below for an overview of the standard deductions and exemptions available under the tax regimes for financial years 2022-23 and 2023-24.
|Particulars||New Tax Regime for |
|New Tax Regime for |
|Rebate eligibility up to income level||Rs. 5,00,000||Rs. 7,00,000|
|Rebate u/s 87A||Rs.12,500||Rs.25,000|
|Standard Deduction||No||Rs. 50,000|
|Effective Tax-Free Salary income||Rs. 5,00,000||Rs. 7,50,000|
|Deduction u/s 80C (EPF, LIC, ELSS, PPF, FD, Children’s tuition fee, etc.)||No||No|
|Leave Travel Allowance (LTA)||No||No|
|Interest on education loan – 80E||No||No|
|Other allowances including food allowance of Rs 50/meal subject to 2 meals a day||No||No|
|Entertainment Allowance Deduction and Professional Tax||No||No|
|Perquisites for official purposes||Yes||Yes|
|Interest on Home Loan u/s 24b on self-occupied or vacant property||No||No|
|Interest on Home Loan u/s 24b on let-out property||Yes||Yes|
|30% of additional employee cost (under Section 80JJAA)||No||No|
|Employee’s contribution to NPS||No||No|
|Employer’s contribution to NPS||Yes||Yes|
|Medical insurance premium – 80D||No||No|
|Disabled Individual – 80U||No||No|
|Savings Bank Interest u/s 80TTA and 80TTB||No||No|
|Interest on Electric vehicle loan – 80EEB||No||No|
|Donation to Political party/trust etc. – 80G||No||No|
|Gifts up to Rs 5,000||Yes||Yes|
|Deduction on Family Pension Income||Yes||Yes|
|Transport Allowance for a specially abled person||Yes||Yes|
|Exemption on voluntary retirement 10(10C)||Yes||Yes|
|Exemption on gratuity u/s 10(10)||Yes||Yes|
|Exemption on Leave encashment u/s 10(10AA)||Yes||Yes|
Who should file ITR and how can one submit an income tax return?
- Whose total income is above the basic exemption limit or
- Who satisfies other conditions (like holding foreign assets)
Must file Income Tax Returns (ITR).
The format of ITR is specified by the tax authorities.
Failure to file ITR within the specified due date can result in:
ITR can be filed electronically and the ITR V can be obtained upon filing the ITR. The ITR form will vary depending on one’s sources of income, income bracket, and foreign assets. One need not send the ITR V copy to the Centralized Processing Centre, if it is authorized through Aadhaar or digital signature (DSC). If not authorized, the ITR V copy must be physically sent to CPC in Bangalore. The timeline for the same is 120 days from filing the ITR.