Income Tax Calculator






- Basic salary
- CTC (Cost to Company)
- Gross salary
- Provident Fund (PF)
- Public Provident Fund (PPF)
- Insurance
- Reimbursements
- Allowances i.e. HRA, LTA, Conveyance allowance, dearness allowance and other allowances
- Gratuity






Old Regime
The income tax calculation formula is simple. As per the old regime, you need to
- Calculate the gross income you receive (including all the components of income)
- Calculate taxable income after considering the deductions available from the Gross Income
- Calculate tax liability on the taxable income
- Check out the rebates you can avail and this will be your final tax liability
New Regime
As per the new regime, you need to –
- Calculate your gross income and you may forego various deductions (as available in the old regime)
- Calculate taxable income after considering the deductions available in the new regime
Calculate tax liability on this taxable income at the concessional rate
Here's an example for you –
Lets calculate the income tax on the salary of Mr. Dinesh who lives in Mumbai –
Salary Components |
Per Month |
Per Year |
Deductions |
Taxable Amount (Old Regime) |
Taxable Amount (New Regime) |
Basic Salary |
₹90,000 |
₹10,80,000 |
|
₹10,80,000 |
₹10,80,000 |
Special Allowance |
₹20,000 |
₹2,40,000 |
|
₹2,40,000 |
₹2,40,000 |
HRA |
₹45,000 |
₹5,40,000 |
₹3,00,000 |
₹2,40,000 |
₹5,40,000 |
LTA |
|
₹18,000 |
₹10,000 |
₹8,000 |
₹18,000 |
Standard Deductions |
|
|
₹50,000 |
₹50,000 |
|
Gross Income |
|
|
|
₹15,80,000 |
₹18,78,000 |
Now, let's calculate the income tax on the gross total income as per the new regime-
Components |
Amount |
Total |
Taxable salary |
₹18,78,000 |
|
Income from other sources |
₹30,000 |
|
Gross total income |
|
₹19,08,000 |
Total income tax liability |
|
₹3,22,296 |
You can calculate total income tax charged as per the tax slab Dinesh falls in.
You may also calculate the income tax on the gross total income as per the old regime, like –
Components |
Amount |
Total |
Taxable salary |
₹15,80,000 |
|
Income from other sources |
₹30,000 |
|
Gross total income |
₹16,10,000 |
|
Total income tax liability |
₹2,92,500 |
Now consider another situation, where Reena has made several investments apart from receiving her salary.
She has invested in –
PPF – ₹40,000Let's see how she will be taxed –
Components |
Amount (per year) |
Deductions |
Total |
Salary |
₹14,80,000 |
|
|
Income from other sources |
₹32,000 |
|
|
Gross total income |
|
|
₹15,12,000 |
|
|
PPF- 1,50,000 |
|
|
|
ELSS- ₹10,000 |
|
|
|
Insurance Premium- ₹5,000 |
|
Total Deductions (Assuming only deductions under 80C) |
|
|
₹1,50,000 |
Gross Taxable Income (gross income-total deductions) |
|
|
₹13,47,000 |
Total tax payable (tax as per tax slab plus 4% cess) |
|
|
₹2,25,264 |
Income Tax Calculator - Frequently Asked Questions
- The actual HRA received by the employee
- The actual rent amount paid minus 10% of the salary
- 40% of salary ( 50% of salary if house situated in Mumbai
- Salary for this purpose shall include basic salary and DA
- Step 1
Find out the difference between tax liability on total income (including arrear) and total income (excluding arrears) - Step 2
Now find out the difference between the tax liability on total income (including arrear) and total income (excluding arrear) of the year to which the arrear belongs - Step3
If the tax liability on arrear in step 2 is higher than step 1, there shall be no tax relief on arrear. However, if it is lower, the extra tax liability shown in step 1 will be relieved
- When net agricultural income is above ₹5,000 in the past financial year
- If the total income (after removing agricultural income) is higher than the basic exemption level as per your income tax slab
- Tax on (non agricultural income + agricultural income), ₹3,00,000 + ₹5,00,000 = ₹8,00,000
- Tax on agricultural income + exemption as per tax slab, i.e., ₹5,50,000. As per the tax slab, the charged tax will be ₹22, 500
- Now, the difference between the two is the final tax, i.e., ₹72,500-22,500 = ₹50,000
-
Disclaimer
Source: https://www.incometax.gov.in/iec/foportal/help/individual/return-applicable-1
ADV/6/22-23/589