An income tax calculator is an online tool that helps calculate taxes an individual is liable to pay per the new and old tax regimes. The calculator makes use of basic information, such as annual salary, tuition fees, rent paid, interest on a child’s education loan, and other savings to calculate the tax liabilities of a person.
It provides the total tax payable under the old tax regime and the new scheme. Besides, it recommends possible investment opportunities for an individual based on their tax liabilities. An income tax calculator is an easy-to-use tool and free. It is simple to understand and can be used by anyone to calculate their tax liabilities.
How to Use an Income Tax Calculator
If you want to save time and yet receive an accurate estimation of income tax, all you need to do is use a free income tax calculator available online. Typically, the common steps are highlighted below:
Step 1: Select the appropriate assessment year for which you wish to calculate the income tax.
Step 2: Select gender and choose the appropriate option -- senior or super-senior citizen.
Step 3: Click on "Income."
Step 4: Enter the figures required in the fields under "Income."
Step 5: Click on "Deductions."
Step 6: Enter the figures needed in the fields listed under "Deductions."
Step 7: Select "HRA Exemptions."
Step 8: Enter required details.
Step 9: Click on "Calculate."
Your tax liability will be reflected on the screen instantly.
Income Tax Slab for Old and New Regime FY 2022-23
Concluding Thoughts
As a taxpayer, you can switch from the selected regime every year from old to new and vice-versa. But, a taxpayer who is making business income wouldn’t be able to utilize the option. In simpler terms, this means that pensioners and salaried individuals would be eligible to switch between a new and old tax regime per their convenience, provided they do not have business income.
Read Also: Understand How Income Tax Is Calculated
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