Income Tax Calculator for FY 2024-25

An income tax calculator is an online tax calculator that assists you in determining how much tax you owe under India’s old and new tax regimes or systems.

This online income tax calculator for FY2024-25 takes into account your essential information, such as:

• annual income and
• costs, including rent,
• house loan EMIs,
• interest on school loans and
• tuition fees

The calculator also takes into account other tax-saving investments.

How to Use the ET Money Income Tax Calculator in Fiscal Year 2024-25

You can quickly calculate your income tax with the Kanakkupillai Income tax calculator for FY 2024-25. Click here to learn more about ITR e-filling.

The steps are as follows:

Step 1: Basic information

In the first phase, you must provide important information such as your:

• age,
• wages,
• the type of house you live in, and
• the rent you pay if you live in a leased property.

Step 2: Income information

Now, enter your income information, including your basic and gross salaries, as well as revenue from other sources, such as interest on deposits and rental income.

Step 3: Include your exclusions

Following that, you must include the exemptions such as

• HRA,
• special allowance, and
• EPF contribution.

Step 4: Make a list of your capital gains

This section allows you to report all capital gains achieved throughout the year from the:

• sale of stock investments,
• unlisted shares, or
• debt investments.

Step 5: Add the deductions together

In this phase, you must include the costs and investments that are deductible, such as

• ELSS,
• term insurance premiums,
• NPS,
• charitable contributions, and so on.

After clicking continue, you will see your total taxable income as well as the total tax you must pay under the tax system you have selected.

How Do You Work Out Your Income Tax?

You may use our income tax calculator in India to determine which tax regime is best for you by calculating your total tax on income.

Here are the stages for the old income tax slab’s income tax computation formula:

Step 1: Determine your gross taxable income

To determine your gross taxable income, remove your deductions from your gross pay, such as

• HRA,
• LTA, and
• standard deduction from your gross salary.

To calculate your gross taxable income, add your net pay to additional sources of income, such as

• interest income,
• capital gains from assets and
• rental income.

Gross taxable income equals gross pay minus HRA + LTA + the standard deduction plus income from other sources.

Step 2: Determine the overall tax advantages

You must calculate the overall benefits if you have made any tax-saving investments or are qualified for any exemptions. You can reduce your taxable earnings by investing in tax-advantaged choices such as:

• The Equity Linked Savings Scheme (ELSS) and
• The Public Provident Fund (PPF) is accessible under section 80C of the Indian Income Tax Act.

Total tax advantages = 80C+ investments, Health insurance premium + savings account interest + house loan interest + others

Step 3: Determine your net taxable income

The net taxable income must be calculated in the third step. The overall tax advantages may be readily subtracted from the gross taxable income.

Gross taxable income minus net taxable income Equals net taxable income or Gross taxable income – Net taxable income = Net taxable income.

Step 4: Determine your overall tax liability

Section 87A provides a Rs.12,500 refund if your total taxable income is less than Rs. 5 lakhs. The tax rate indicated before will apply to persons whose total taxable income exceeds Rs.5 lakh.

If you choose the new tax system, numerous deductions/exemptions, such as HRA and LTA, will be taxable. Furthermore, you cannot obtain tax benefits by investing in tax-saving devices or other deductions. As a result, your whole income would be subject to income tax.

Let us look at an example to illustrate how the old and new tax systems vary.

Monisha works in Mumbai and earns a monthly base pay of Rs. 12,00,000. Her employer provides an HRA of Rs. 6,00,000, a yearly special allowance of Rs. 30,000, and a yearly LTA of Rs. 2,40,000.

She lives in a leased property and pays an annual rent of Rs. 4,80,000. In addition, her additional income from other sources, say interest income totals Rs. 1 lakh for the fiscal year.

Now, let us see her entire tax due under the old and new tax systems.

Let us now compute the different tax-saving investments and deductions. She has invested Rs.1.5 lakhs in various tax-saving alternatives under Section 80C, an additional Rs. 50,000 in NPS, and paid Rs.25,000 in medical insurance premiums for herself and her spouse.

She also received a Rs.5,000 tax deduction for savings account interest under Section 80TTA.

As a result, according to the income tax computation formula, her total tax deductions for the fiscal year are Rs. 2,30,000.

As a consequence, net taxable income (under the previous tax regime) would be Rs. 13,90,000, but it would be Rs. 21,70,000 under the new tax regime.

Utilize our income tax calculator to compute your income tax liability accurately using simple steps for both old and new tax regimes.

As a result, if Monishachose adopted the new tax structure, her overall income tax burden would be higher.

Simply expressed, people must compute the tax payable under both tax systems before deciding which regime to choose.

Furthermore, the capacity to transition between old and new tax regimes is affected by the type of income. Salaried persons and seniors with no business income can choose between the two tax regimes depending on their financial situation each assessment year. A non-salaried taxpayer will only be eligible to shift to the new tax regime once in their lifetime if they want to do so in the current assessment year.

Once she has exercised her option to revert to the old tax regime, they will be unable to pick the tax rates under the new regime.

India’s Income Tax Slabs

Taxpayers in India pay income tax based on their tax slab. Different tax rates are established for various income levels. It indicates that when a taxpayer’s income increases, so does their tax rate. Income tax slabs are anticipated to vary in every budget. As a result, different persons may fall into various tax brackets by applying different income tax percentages.

For various tax slabs, India presently has two separate income tax regimes.

Individual taxpayers (including residents and non-residents) were split into three categories under the previous tax regime:

1. Individuals (under the age of 60) (under the age of 60)
2. Elderly people or senior citizens (60 to 80 years of age)
3. Super senior citizens (aged over 80 years)

The tax rates for these three groups range from 5% to 30%. As an alternative, in the Union Budget of 2020, the Finance Minister announced new tax slabs. Six tax slabs were thereby included in the new income tax slab for 2020.

Under the old tax regime, deductions and exemptions were permitted

Under the previous tax regime, Indian taxpayers could make use of a variety of tax breaks to decrease their taxable income. The tax rate is lower under the new regime, but taxpayers must forego the majority of tax deductions.

Tax-saving deductions permitted under sections 80C to 80U of the Income Tax Act of 1961 must be completed under the former tax regime. Prior to paying any taxes, you can subtract these investments from your taxable income.

Here is a list of common deductions and exemptions that were available under the previous tax regime:

1. The standard deduction for salaried persons is Rs 50,000
2. LTA exemption for paid persons travelling for business purposes
3. Section 80C allows an individual or a HUF (Hindu Undivided Family) to claim a tax deduction of up to Rs. 1.5 lakh.
4. Section 80D allows for a deduction for medical costs
5. The interest paid on a self-occupied house loan is deductible up to Rs. 2 lakhs
6. Section 80E Deduction for Higher Education Loans
7. Section 80G provides an income tax credit for charitable contributions
8. Savings account interest income is tax deductible up to Rs. 10,000.

Under the new tax structure, most tax exemptions and deductions are no longer available. Furthermore, the new tax system applies to both those under 60 and those above 60.

Under the new tax regime, deductions and exemptions are permitted.

Budget 2020 promised a new tax structure that eliminates around 70 tax benefits. Some of the tax benefits available under the new tax structure are listed below.

1. Section 24(b) of the Internal Revenue Code allows for a deduction for interest paid on a home loan for a rented-out property.
2. Employer contributions to NPS are permitted under 80CCD (1B).
3. Similarly, the maturity proceeds and interest on PPF and Sukanya Samriddhi Yojana remain tax-free.

The new tax legislation exclusively eliminates investment deductions for these two types of investments.

Disabled persons are entitled to transportation allowances. A conveyance allowance was sought to offset work-related transportation costs.

Any payment made to cover tour or transfer charges

Indemnity is paid on a daily basis to cover ordinary charges or expenses incurred as a result of absence from a regular place of duty.

Section 80JJA allows for the deduction of expenses for extra employees.

Why should you file your Income Tax Return?

When your income exceeds a specific threshold, you must pay tax on it. You must file an Income Tax Return in order to pay your taxes.

ITR is a form wherein you input facts regarding the revenue you have made in the prior financial year for the period from 1st April of a particular year to 31st March of the succeeding year. Filing an ITR is necessary for everyone, whether they are:

1. salaried individuals,
2. partnerships, or
3. HUFs, etc.

The majority of individuals regard filing income tax returns as a time-consuming task. That is one major reason why many of the tax payers choose not to pay or even file income tax returns.

As a citizen who is responsible, you must file your returns on time each assessment year. This is a moral obligation of every working Indian.

Filing ITR might also be beneficial to you. Here are some of the pros for filing an income tax return.

• It functions as a legal document.

The Income Tax Return has enormous legal significance. It’s on file with the government. It also serves the purpose of legal evidence in the following two ways.

• Identity Verification

The return you fill out can be used as identification proof in a variety of situations, such as when applying for an AADHAR card or any other document. It is also accepted as proof for your address by the government / such other authorities.

• Income Proof

As it was stated before, the ITR form includes a full record of a person’s whole:

• revenues and
• The tax you must file is computed on this basis.

As a result, ITR can also be used as income evidence, as some transactions, such as the:

• acquisition of real estate or
• need proof of income.

This might be helpful for those who are self-employed and don’t obtain Form 16.

• Can Assist You in Claiming Deductions

The government allows some deductions which you can avail for:

– decreasing the burden on taxpayers and

– encourage more individuals to pay their taxes.

1. a) These deductions and exemptions can be claimed in some investments and hence aid in minimising the tax you finally pay.
2. b) TDS and rebates can also be reclaimed.

However, in order to take advantage of these tax breaks, you must file an income tax return. Claiming of deductions cannot be made by you if the ITR is not filed/submitted by you.

• Important Document While Applying for Loans

When you apply for a loan to buy something, such as a car or a new house for your family or company, the bank asks you to provide certain paperwork, including:

1. a) Aadhar card
2. b) PAN card
3. c) Driver’s license
4. d) Photo ID etc

One key document requested is evidence of income. Banks often request the ITR to applicants. And this majorly for the previous three years. This is done to examine your history and current financial condition and whether you will be able to pay the loan or not.

ITR can not only be used to apply for loans from bank or financial institutions, but it can also be used to obtain a credit card. Credit card providers often ask for your prior pay and returns before granting you the card.

• It is beneficial if Planning a Trip Abroad.

Going abroad demands specific processes to be followed. If you do not file your ITR, your intentions to travel overseas may be jeopardised. The ITR form is one thing on the list of papers that are required by the countries that you intend to visit.

This is due to the following factors:

1. A history of filing income tax returns strengthens your case and increases your chances of visa acceptance.
2. It provides the embassy with information about your financial condition.

• Avoid Punishment and Penalty

The Income Tax Act of 1961 I regulating the taxes that apply to you. And pertaining to this, if your income is above the exempt threshold, you are obligated to pay taxes.

So, if you are entitled to pay taxes on your income but fail to file your Income Tax Returns, you will face penalties.

The income tax officer or the ITO has the right / duty to assess a penalty of up to Rs. 5000. If you do not file returns, you may face further harsh penalties.

As a result, you should file an ITR to put away such:

• penalties and
• any other consequences.

• Losses can be transferred.

Sections 70 and 71, coming under the Income-tax Act of 1961, provide provisions allowing us to carry over losses from this year to the next such that your tax liability can be reduced. This implies that you can shift your loss to the next evaluation year.

Here are a couple of such examples:

1. Losses from house property can be carried forward for the next eight assessment years and deducted from house property income.
2. Business losses can be carried forward and reimbursed with future business income.

You cannot carry forward or set off your losses if you do not submit an income tax return.

Filing your income tax return (ITR) is a vital task, and in my opinion, this should be considered as one of the elements of basic education as our citizens should be equipped to DIY their own ITRs and plan their taxes once they start earning.