Income Tax Calculation: Every person in the country must pay tax at some point. Some people pay more tax, while some people pay less tax. How much tax will be levied on whom, which income comes under tax exemption, and how much income tax will you have to pay annually?… All these questions often interest people:-
On the other hand, calculating it becomes even more difficult if you want to avail yourself of a tax exemption. You will not get a refund if you have not claimed tax exemption. Along with tax exemption, it is also essential to understand the calculation. So let us know how you can calculate tax on your income.
Gross Salary
First of all, it is essential to know about your gross income. If you are earning income from many places, calculate all of them and find the gross income. As a salaried employee, you can calculate your gross income by adding your basic salary, allowances, bonus and other taxable components.
Tax exemption
Many components of a person’s salary are exempted from income tax. These include house rent allowance, standard deduction and leave travel allowance. In such a situation, first of all, you must check whether your income falls under the exemption, and if yes, remove it from the gross income.
Deduction
Deduction is a method of reducing taxable income. The most common deductions for salaried employees include section 80C for investments, such as PF or insurance, and section 80D for home loans and health insurance premiums.
How much will be the taxable income?
You can calculate the total tax applicable to your income based on different tax slabs. After this, you will understand whether your taxable income is 10, 20, 30 or 50 thousand rupees. Let us tell you that under the new tax regime, tax exemption is available on annual income up to Rs 7 lakh, whereas under the old tax regime, the total exemption is Rs 5 lakh.
IT
If you are paying taxes and your gross income does not fall under the tax ambit, you can claim a refund by filing an income tax return.