Income Tax Calculation - A Quick Overview
If your income falls within the taxable range, you must pay a portion of your yearly earnings as income tax.
For those with monthly earnings, the tax can be deducted automatically from your salary (TDS) or paid online
through the Central Board of Direct Taxes (CBDT) portal. To ensure taxes are paid on any extra income from
other sources, the IRS has made online tax payment simple and convenient. This page features an income tax
calculator updated with the latest changes from the Union Budget 2023–2024, helping you understand the new
tax regime easily.
Understanding Income Tax Slabs
Income tax slabs show the tax rates individuals need to pay based on their total annual income from all
sources.
These slabs help determine how much tax you owe. Using a taxable income calculator, you can easily figure
out
the tax amount for the fiscal year 2021–22, considering the applicable tax rates.
How To Use The Restthecase Online Income Tax Calculator
Using the Restthecase Income Tax Calculator for AY 2024-25 is simple. Start by entering your basic details,
income information, and deductions.
- Select the assessment year you want to calculate for.
- Choose your age from the options provided.
- Enter your income details, including your full salary (monthly or yearly, without deductions). You also
need to provide information about other income sources, such as annual rental income, interest paid on
home loans (for self-occupied or rented properties), and income from other sources.
- Input details for various deductions, including Section 87A, 80C, 80CCD (1B), 80D, 80G, 80E, 80TTA,
80TTB, and 80GG.
- Include any interest on student loan deposits.
Finally, click "Calculate" to get your accurate tax results based on the new tax regime.
How To Calculate Your Total Income Tax Liability
Calculating your total tax liability is straightforward with a new tax regime calculator. You can find your
taxable income using this simple formula:
Taxable Income = Gross Income - (Deductions + Exemptions)
Gross income includes your basic salary, house rent allowance (HRA), special allowances, transport
allowance,
and any other salary benefits. Additionally, your income might include tax-free perks like travel expenses
and
phone bill reimbursements. If you live in a rented place and receive HRA, you can also claim an exemption
for it.
Example Of Income Tax Calculation
To illustrate how income tax is calculated, let's take Mr. Rahul as an example. He earns a basic salary of
₹1,00,000 per month, along with an HRA of ₹50,000, a special allowance of ₹21,000 per month, and an annual
LTA of ₹20,000. Rahul pays a monthly rent of ₹40,000 and lives in Delhi NCR.
| Nature |
Amount |
Exemption/Deduction |
Taxable (Old Regime) |
Taxable (New Regime) |
| Basic Salary |
₹12,00,000 |
- |
₹12,00,000 |
₹12,00,000 |
| HRA |
₹6,00,000 |
₹3,60,000 |
₹2,40,000 |
₹6,00,000 |
| Special Allowance |
₹2,52,000 |
- |
₹2,52,000 |
₹2,52,000 |
| LTA |
₹20,000 |
₹12,000 (bills submitted) |
₹8,000 |
₹20,000 |
| Standard Deduction |
- |
₹50,000 |
₹50,000 |
₹50,000 |
Gross Total Income from Salary: ₹16,50,000 (Old Regime), ₹20,22,000 (New Regime).
This table helps clarify Mr. Rahul's income and how it is taxed under both old and new tax regimes.
Calculating Gross Taxable Income In India (Old Tax Regime)
| Calculation of Gross Taxable Income in India (Old Regime) |
Amount |
| Income from Salary |
₹16,50,000 |
| Income from Other Sources |
₹20,000 |
| Gross Total Income |
₹16,70,000 |
| Deductions |
|
| Section 80C |
₹1,50,000 |
| Section 80D |
₹25,000 |
| Total Deductions |
₹1,75,000 |
| Net Taxable Income |
₹14,95,000 |
Income Tax Calculation for AY 2024-25 (Old Regime)
Income Tax Slab Rates:
| Income Range (₹) |
Tax Rate (%) |
| Up to ₹2,50,000 |
0% |
| ₹2,50,001 - ₹5,00,000 |
5% |
| ₹5,00,001 - ₹10,00,000 |
20% |
| Above ₹10,00,000 |
30% |
Calculating Net Taxable Income and Total Income Tax Payable
Following the slab rates for AY 2024-25:
Total Taxable Income: ₹14,95,000
| Tax Slab |
Tax Amount (₹) |
| Up to ₹2,50,000 |
0 |
| ₹2,50,001 - ₹5,00,000 |
₹12,500 |
| ₹5,00,001 - ₹10,00,000 |
₹1,00,000 |
| Above ₹10,00,000 |
₹1,49,500 |
Total Income Tax Payable = ₹0 + ₹12,500 + ₹1,00,000 + ₹1,49,500 = ₹2,62,000
Final Tax Payable After Deductions
Total Deductions: ₹1,75,000
Total Tax Payable After Deductions = ₹2,62,000 - ₹1,75,000 = ₹86,000
So, the final tax payable by Mr. Rahul is ₹86,000.
Conclusion
The income tax calculation process for salaried individuals is straightforward if you follow the steps
outlined
above. Using an online income tax calculator can further simplify your calculations and help you understand
your
tax liability better. Always keep abreast of the current tax slabs and any changes introduced in the annual
budget to ensure accurate calculations.
