FAQs on Income Tax Calculation in India
Q What is income ?
Income means the amount that an individual earns in exchange for providing goods or services.In other words, income is the sum of all the wages, salaries, profits, interests payments, rents, and other forms of earnings received for a period of time.
For the purpose of taxation, income has been categorized into five heads :
Income from Salary .For detail please click here
Income from House Property. For detail please click here .
Income from Profit & Gain of Business & Profession
Income from Capital Gain
Income from Other Sources
Q What is income tax ?
An income tax is a direct tax which is imposed on assessee depending upon the their respective income or profit. In other words, it is the tax levied on the income earned.
Q When income tax is required to be paid ?
Income Tax is required to be paid when your income exceeds the Basic Exemption Limit. This limit is specified by the government every year. Currently, it is Rs. 2,50,000 for Individual below the age of 60 Years.
Q What is the period for which tax is calculated?
Tax is charged on any income earned during the period April 1- March 31. The year in which the income has been earned is known as the ‘previous year’ and the year in which the tax is calculated, is known as the ‘assessment year’.
Important Link
Q What are the benefits of tax calculation beforehand?
You should calculate Taxes beforehand so that you are able to set aside the funds which you will be needing for paying taxes at the time of filing return.Therefore, at the time of return filing, you don’t have to rush for arranging funds.The other benefit is, it lets you know that whether your taxes will go up or down in comparison to the previous year.
Q How to calculate income tax in India?
In India,the Income tax is calculated on the basis of tax rates and slabs defined by Finance Ministry in the budget which is presented every year.
What calculations are made by the calculator?
The Income Tax calculator carries out following calculations for the Assessment Year selected by you :
Income from Salary and Wages, House Property, Presumptive Business and Other Sources.
Total Deductions available under various sections of Chapter VIA.
Taxable Income after taking into account income from all sources of income (viz. Salary and Wages, House Property, Capital Gains, Business and Profession, Agriculture (for Rate purpose) and Other Sources and available deductions.
Taxable Income at Normal Rates and Taxable Income at Special Rates.
Slab-wise Taxable Income and Income Tax
Rebate available under Section 87A to tax payees having taxable income below specified limit.
Health & Education Cess, Surcharge and Marginal Relief on Surcharge
Total Tax Liability and Income Net of Tax
IMPORTANT LINK::;
Click here for Income tax Department official Calculator
Who can use the Income Tax Calculator?
Any Resident Individual viz. Resident Individual aged below 60 year, Senior Citizen, Very Senior Citizen and HUF can use the calculator for AY 2020-21 and AY 2019-20
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