Each year, as the 31st of July comes around, the rush to file income tax returns steadily mounts. For most taxpayers, this period is stressful because they often find themselves facing a huge amount of unexpected tax liability. If you too have been going through this issue year after year, it helps to assess your tax liabilities in advance. This way, you can mobilise the funds needed to pay your income tax or take measures to reduce your tax dues.
Samco’s income tax calculator can help you get a headstart on your tax planning routine — so you don’t have to worry about such unpleasant surprises anymore.
An income tax calculator is an online tool that’s designed to estimate the amount of income tax you are liable to pay to the government for any given financial year. To use this financial tool, you need to enter various details like your annual income and investments or expenses that qualify as tax deductions. The income tax calculator then computes your tax liability in a few seconds.
Before you discover the process of using Samco’s income tax calculator, you need to become familiar with how your tax liability is calculated. Let’s examine the steps broadly involved in assessing how much income tax an individual needs to pay.
Step 1: Calculate Your Total Income
Start by summing up all your earnings from the five heads of income for the financial year. This includes your salary, income from house property (rental or deemed rental income), profits from business or profession, capital gains (short-term and long-term) and income from other sources like interest, dividends, etc.
Step 2: Account for Tax Deductions and Exemptions
Next, deduct the eligible amounts under various sections of the Income Tax Act. This includes investments or expenses under Section 80C (like life insurance premiums, PPF, ELSS or home loan repayments), health insurance premiums under Section 80D, interest on education loans under Section 80E, donations under Section 80G, etc. Also, consider exemptions like HRA, LTA, and the standard deduction applicable to salaried individuals.
Step 3: Arrive at Your Total Taxable Income
After accounting for deductions and exemptions, what remains is your total taxable income. This is the income that will be subject to tax as per the applicable income tax slabs. Remember, different tax slabs apply based on your age group and the tax regime you choose (old vs. new).
Step 4: Calculate Your Total Tax Liability
Apply the prevailing income tax slabs to your taxable income. India follows a progressive tax system, where higher income brackets are taxed at higher rates. Remember to include cess and surcharge, if applicable, as per your income bracket.
Step 5: Calculate the Self-Assessment Tax Payable
Finally, deduct any TDS (tax deducted at source) and advance tax payments you have made during the financial year from your total tax liability. The remaining amount is your self-assessment tax, which is what you need to pay to fulfil your tax obligation.
Want more clarity on how to use our income tax calculator optimally? Here’s a handy guide that can help.
Step 1: Select the Year
Choose the relevant assessment year for which you wish to check your tax liability. It is the year immediately following the financial year. For instance, if you wish to check your tax dues for FY 2022-23, the assessment year will be 2023-24.
Step 2: Select Your Age Bracket
From the dropdown menu, choose the age bracket you belong to. This is because tax slabs vary for non-senior citizens, senior citizens and super senior citizens.
Step 3: Enter Your Income Details
Then, click on the option labelled ‘Next’ to proceed to the income section, where you need to submit the details of your gross salary, interest income, income from other sources, rental income and home loan interest.
Step 4: Input the Deductions Applicable
Again, click on the option labelled ‘Next’ to proceed to the deductions section, where you need to submit the details of various tax deductions you are eligible for. This may include basic deductions u/s 80C, NPS contributions u/s 80CCD(1B), health insurance premium u/s 80D, donations u/s 80G, education loan interest u/s 80E and interest u/s 80TTA and 80TTB.
Step 5: Fill in the HRA Details
Then, proceed to the last section, which pertains to HRA exemption. Here, you need to enter essential details like your annual basic salary, annual HRA received, rent paid per year and whether or not you live in a metro city.
Step 6: Calculate Your Tax Liability
Once you’ve entered all the details as explained, click on the ‘Calculate’ option. The income tax calculator will instantly show you your tax liability for the relevant financial year under the old and the new tax regimes. You can compare the two values and choose the tax regime that is most beneficial for you.
Samco’s income tax calculator is an essential tool for effective tax management. It caters to the needs of a wide range of taxpayers looking to simplify their tax-related calculations and planning. Here are 5 ways in which you can benefit from this free online tool.
1 It Accurately Computes Your Tax Liability
Samco's tax calculator simplifies the complex task of estimating your tax liability. By submitting details like annual income and deductible investments and expenses, you get an accurate calculation of the income tax you owe.
2 It Streamlines the Tax Planning Process
The income tax calculator also facilitates proactive tax planning. By understanding your tax liability well in advance, you can strategize better and make tax-saving investments or restructure your income and expenses as required.
3 It Simplifies the Income Tax Return Filing Process
For many taxpayers, the process of filing tax returns can be daunting. Samco's income tax calculator breaks down this process into manageable steps and helps you organise your financial information systematically. This, in turn, reduces the chances of errors in your returns.
4 It’s Easier to Remain Up-To-Date About Tax Regulations
With tax laws and slabs frequently changing, remaining aware of the latest regulations can be challenging. Samco’s income calculator makes this easy by incorporating the latest tax regulations — thus ensuring that your tax calculations are compliant with the current laws.
5 It’s Accessible and Easy to Use
The user-friendly interface of Samco’s income tax calculator makes it accessible to taxpayers with varying levels of digital literacy. Its online availability also means you can access it anytime, from anywhere.