. Income Tax Calculator

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Surcharge
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Education Cess @ 3%
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Disclaimer: H&R Block has developed the Tax Calculator as a tool to provide the user with information about their overall, annual tax liability. The Tax Calculator is a tax estimator tool only and should only be used to calculate an individual’s estimated total tax liability. The Tax Calculator is not intended to serve as an online tax preparation tool for Income Tax Returns, or any other return; any other use is strictly prohibited. In the event the user intends to procure H&R Block’s tax filing services or any other services, they could obtain the same by accepting the applicable terms and conditions. H&R Block and its officers, employees or representatives disclaim any and all representations, warranties or guarantees and assume no responsibility or liability for any damages arising out of the use of, reference to or reliance on the Tax Calculator.

Income Tax Slab Rate for A.Y. 2017-18:

 

For Individuals Below 60 Years of Age

 

Income Tax SlabIncome Tax Rate
Income up to Rs. 2,50,000Nil
Income between Rs. 2,50,001 – Rs. 5,00,00010% of income exceeding Rs. 2,50,000
Income between Rs. 5,00,001 – Rs. 10,00,000Rs. 25,000 plus 20% of income exceeding Rs. 5,00,000
Income above Rs. 10,00,000Rs. 1,25,000 plus 30% of income exceeding Rs. 10,00,000
Less: Rebate u/s 87A – It is only applicable to resident individuals with income up to Rs. 5,00,000. The maximum amount of rebate allowed is Rs. 5,000.

Add: Surcharge – A surcharge @ 15% of tax is applicable if income exceeds Rs. 1 crore. However, surcharge is subject to marginal relief as stated:

• If income exceeds Rs. 1 crore, the applicable tax plus surcharge should not exceed the part of income which is in excess to Rs. 1 crore.

Add: “Education Cess” and “Secondary and Higher Education Cess” shall be levied at the rate of 2% and 1% respectively, on the amount of tax computed, inclusive of surcharge.

 

For Resident Senior Citizens (age 60 years or more but less than 80 years)

 

Income Tax SlabIncome Tax Rate
Income up to Rs. 3,00,000Nil
Income between Rs. 3,00,001 – Rs. 5,00,00010% of income exceeding Rs. 3,00,000
Income between Rs. 5,00,001 – Rs. 10,00,000Rs. 20,000 plus 20% of income exceeding Rs. 5,00,000
Income above Rs. 10,00,000Rs. 1,20,000 plus 30% of income exceeding Rs. 10,00,000
Less: Rebate u/s 87A – It is only applicable to resident individuals with income up to Rs. 5,00,000. The maximum amount of rebate allowed is Rs. 5,000.

Add: Surcharge – A surcharge @ 15% of tax is applicable if income exceeds Rs. 1 crore. However, surcharge is subject to marginal relief.

• If income exceeds Rs. 1 crore, the applicable tax plus surcharge should not exceed the part of income which is in excess to Rs. 1 crore.

Add: “Education Cess” and “Secondary and Higher Education Cess” shall be levied at the rate of 2% and 1% respectively, on the amount of tax computed, inclusive of surcharge.

 

For Resident Super Senior Citizens (age 80 years or more)

 

Income Tax SlabIncome Tax Rate
Income up to Rs. 5,00,000Nil
Income between Rs. 5,00,001 – Rs. 10,00,00020% of income exceeding Rs. 5,00,000
Income above Rs. 10,00,000Rs. 1,00,000 plus 30% of income exceeding Rs. 10,00,000
Add: Surcharge – A surcharge @ 15% of tax is applicable if income exceeds Rs. 1 crore. However, surcharge is subject to marginal relief.

• If income exceeds Rs. 1 crore, the applicable tax plus surcharge should not exceed the part of income which is in excess to Rs. 1 crore.

Add: “Education Cess” and “Secondary and Higher Education Cess” shall be levied at the rate of 2% and 1% respectively, on the amount of tax computed, inclusive of surcharge.

 

How to calculate TDS amount?

 

In order to calculate the amount of TDS per month we need to calculate the salary for the year and deduct all the amounts that are exempt from taxes and other deductions that reduce the taxable income. In order to calculate this amount the accounts department asks for some tax declarations that need to be given based on the amount of investments that you will make during the year. Apart from this you may also estimate the amount of certain expenses like travel and rent for the year. Rent amount can be calculated based of the rent agreement. Other expenses like medical, travel expenses and others that may give you some tax exemptions, can be estimated basis past year expenses. Once all these figures are given, the accounts department calculates your tax liability. Here is an example explaining the computation of Income Tax.

 

Calculating Income Tax to be Deducted from Salary:

 

Mr. Girish, aged 45 years, submitted the details of his income and investment for Financial Year 2016-17, as under:

 

ParticularsAmount (in Rs.)
Basic Salary8,40,000
House Rent Allowance4,20,000
Transport Allowance24,000
Employer’s contribution towards PF @ 12% of basic pay1,00,800
Leave Travel Allowance75,000
Deposit in Public Provident Fund Account (PPF)1,50,000
Mediclaim Premium paid (for self)24,000

 

Mr. Girish pays rent of Rs. 20,000 p.m. in Pune. He travelled to Kerala with his family on a holiday trip. Tickets for which cost him Rs. 40,000.

 

Calculation of taxable income:

 

ParticularsAmount
(in Rs.)
Amount
(in Rs.)
Basic pay8,40,000
+ Transport Allowance

(-) Exemption

24,000

(19,200)

4,800
+ House Rent Allowance

(-) Amount of HRA exempted

(Lower of below 3 figures)

1. Actual HRA received – Rs. 1,80,000 3,36,000

2. Rent paid in excess of 10% of Basic (Rs. 2,40,000 – Rs. 84,000)

3. 40% of Basic 1,56,000 3,36,000

3,36,000

(1,56,000)

1,80,000

+ Leave Travel Allowance

(-) Amount exempted on Leave Travel Allowance

75,000

(40,000)

35,000

Gross Salary10,59,800
Less: Deductions under chapter VI-A

Under section 80C (capped at Rs. 1,50,000 )

1. PF contribution

2. Deposit in PPF account

1,00,800
1,50,000

(1,50,000)

Mediclaim premium paid (Under section 80D)(24,000)
Taxable income under salaries8,85,800
Tax on salary (for the year)1,05,220
TDS amount per month = (Tax for the year/12)8,768

 

Calculation of tax liability:

 

The taxable income of Mr. Girish is Rs. 8,85,800. The tax he is required to pay on this income will be calculated as follows:

 

Up to Rs. 2,50,000Exempt from taxAmount
(in Rs.)
Up to Rs. 2,50,000Exempt from tax0
Rs. 2,50,000 – Rs. 5,00,00010% (10% of Rs. 5,00,000 (-) Rs. 2,50,000)25,000
Rs. 5,00,000 – Rs. 10,00,00020% ( 20% of Rs. 8,85,800 less Rs. 5,00,000)77,160
More than Rs. 10,00,00030%0
Education Cess3% of total tax (3% of Rs. 25,000 + Rs. 77,160)3,065
Total Income TaxRs. 25,000 + Rs. 77,160 + Rs. 3,065

(Rounded off to nearest 10 rupees multiple)

1,05,220

 

Hence, the total Income Tax liability for Mr. Girish is Rs. 1,05,220 for the F.Y. 2016-17.

 

What is an Assessment Year? What is the difference between an Assessment Year and Previous Year?

 

A.Y. is the year in which you file returns. It is the year in which the income that you have earned in the Financial Year that just ended will be evaluated. For instance, if you have had an income between 1 April 2016 and 31 March 2017, 2017-18 will be the A.Y.

As the word ‘previous’ means ‘coming before’, hence it can be simply said that the Previous Year is the Financial Year preceding the Assessment Year. e.g., for Assessment Year 2017-2018 the Previous Year should be the Financial Year ending 31st March 2017.

 

Who is a resident of India?

 

If you have spent more than 182 days in India for that F.Y. then you are considered as a resident irrespective of your citizenship or;

If you were in India for 60 days or more during that Financial Year and have been in India for 365 days or more during 4 previous years immediately preceding the relevant Financial Year.

 

What is considered as income?

 

If you are a salaried person, your salary from your employer will be treated as income.
On the other hand for a businessman, the net profit will be considered as income.

In all there are five heads for income as follows:

1) Salary

2) Income from house property

3) Income from business/profession: This applies for entrepreneurs and small business people who don’t get a regular salary income. Some examples are doctors, lawyers, etc.

4) Capital gains such as profit from sale of house, land, gold, etc.

5) Income from other sources such as interest received on bank deposits, winnings from lotteries or game shows, etc.

 

Why should I pay Income Tax?

 

When your income exceeds the threshold limit set by the Income Tax department that is exempt from taxes, you will have to pay tax on the excess income you earn. It is calculated for the period from April 1 to March 31. This period is referred to as a Financial or Previous year. The tax money garnered is used for the country’s development.

 

Do I need to pay tax on gifts received?

 

Gift received in cash, which exceed Rs. 50,000, are taxable. However, gift tax is not applicable in the following situations:

1) Gifts in cash or kind whose value is less than Rs. 50,000

2) Gifts received on marriage day from friends or relatives

3) Gifts received from relatives as defined under the act

 

What are Capital Gains?

 

Capital gains are gains made by selling capital assets, such as equities, property, land, gold, etc. Under
Indian Income Tax laws, you need to pay Income Tax on capital gains. The tax calculation is dependent
on whether you have held the asset for a long term or short term as defined by tax laws.

 

What are receipts? Are all receipts considered as income?

 

A receipt is your entire income before tax deductions. Not all receipts are considered as income. Basically, they are of two kinds:

1. Capital receipt: This is the income earned by selling the source or asset. For example, income earned from selling a property, gold, etc.

2. Revenue receipt: Income from source such as salary, interest accrued on deposits, rent from property is termed as revenue receipt.

 

What are the fines/penalties if I file Income Tax Returns after the due date?

 

You may have to pay a penalty up to Rs. 10,000 and interest on tax due @1% per month of default.

 

If I have paid more tax when filing my returns, will it be refunded?

 

Yes, the excess amount will be refunded by cheque or direct credit into your bank account.

 

What are donations?

 

If you make any donations to certain qualified institutions or causes, you can claim a tax benefit on the donated amounts. Depending on the receiver of the donation, your donation would qualify either for 100% deduction or 50% deduction.