Income Tax Calculation: On the other hand, if you want to avail tax exemption, then its calculation becomes even more difficult and if you do not claim tax exemption, then you will not get the amount received as refund. In such a situation, it is very important to understand the calculation along with tax exemption.
Income Tax Calculation: Every person in the country has to pay tax directly or indirectly. Some pay more tax, while some pay less tax. People have to pay tax under different categories, which is not easy for everyone to understand. How much tax will be levied on whom, which income comes under tax exemption and how much income tax will you have to pay on your annual income? … All these questions often put taxpayers in trouble.
On the other hand, if you want to take advantage of tax exemption, then its calculation becomes even more difficult and if you do not claim for tax exemption, then you will not get the amount received as refund. In such a situation, it is very important to understand the calculation along with tax exemption. However, you do not need to worry, but here is a way being told, by which you can easily calculate tax on your income.
How to calculate your taxable income?
There are many steps to know about your total taxable income in India, which you should know about, so that if needed, you can reduce your taxable income as much as possible. Also, there should be ease in filing Income Tax Return (ITR).
Gross Salary
First of all, you should know about your gross income. If you are earning income from many places, then calculate all and take out the gross income. If you are a salaried employee, then calculate your gross income by adding your basic salary, allowances, bonus and other taxable components.
Tax exemption
Now comes the turn of tax exemption, many components in a person’s salary are exempted from income tax. These include things like House Rent Allowance (HRA), Standard Deduction and Leave Travel Allowance (LTA). In such a situation, you should first check whether your income is falling under the exemption and if yes, then remove it from the gross income.
Deduction
Apart from tax exemption, deduction is a way through which you can reduce your taxable income. Some deductions are offered under different sections of the Income Tax Act. The most common deductions for salaried employees include Section 80C for various investments like PF or insurance, Section 80D for home loan and health insurance premium.
How much will be the taxable income
After following all these processes, you will know how much of your income will be taxed. You can calculate the total income tax applicable on your income on the basis of different tax slabs. After this you will know whether your taxable income is 10, 20, 30 or 50 thousand rupees. Let us tell you that under the new tax regime, there is tax exemption on annual income up to Rs 7 lakh, while under the old tax regime the total exemption is Rs 5 lakh.
ITR
If your tax has been deducted and your gross income does not fall under the tax ambit, then you can claim a refund by filing income tax return. After a few days, the deducted money will be credited to your account.
Most Read Articles:
- Income Tax Deadline: Government extends deadline for this important tax-related work till January 31, 2025, check details
- Major income tax rules changes in 2024; What will be the impact on your salary in the new year 2025? know here
- Credit Card Link UPI: Link your credit card to UPI from home, know step-by-step guide
