Income Tax Calculator: New & old regime income tax slabs for AY 2021-22
Income Tax Calculator: New & old regime income tax slabs for AY 2021-22
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An income tax calculator is a digital tool you can use to calculate your tax payment for the relevant financial year. It factors in variables like your total income, age, deductions, and home loan payments, and assess your tax liability instantly. It is a powerful tool because tax calculations can be complex as there are many tax laws involved. Simply arriving at your taxable income can be challenging. Nevertheless, an income tax calculator generates error-free results in moments. To know how it works, learn about how income tax is calculated in India.

How is income tax calculated in India?

Income tax is calculated based on 2 major factors: your taxable income and the tax slab applicable. However, since Union Budget 2019-20 another factor to consider is the tax regime you choose. Your taxable income and tax slabs are subject to change based on which regime you pick.

Old regime

Under the old tax regime, you arrive at your taxable income by adding together your income salary, capital gains, house property, business/ profession, and other sources and subtracting deductions like Section 80C and 80D and exemptions like HRA and LTA. When you use an income tax calculator all of this is done behind the scenes.Next, your taxable income is taxed at the old tax slab rates. Depending on your age and taxable income, the relevant tax slab rate will apply.

New regime

Under the new tax regime, you forego most exemptions and deductions. In which case, you simply must add your income from salary, capital gains, house property, business/ profession, and other sources to obtain your taxable income. This is then taxed as per the applicable tax slab rate. The new tax slab rates are concessional, that is, they are often lower across various income categories.

What are the income tax slabs?

Under Old regime

For taxpayers below age 60

Income Tax Calculator: New & old regime income tax slabs for AY 2021-22

For senior citizen taxpayers – between 60 and 80 years

Income Tax Calculator: New & old regime income tax slabs for AY 2021-22

For super-senior citizen taxpayers – aged 80 and above

Income Tax Calculator: New & old regime income tax slabs for AY 2021-22

Under New regime

Income Tax Calculator: New & old regime income tax slabs for AY 2021-22

What is the non-taxable income limit?

As per the old regime, you are exempt from tax if your taxable income does not exceed Rs.2.5 lakh if you are a regular citizen, Rs.3 lakh if you are a senior citizen, and Rs.5 lakh if you are a super-senior citizen. In case of the new regime, irrespective of age, the non-taxable limit is Rs.2.5 lakh.

Nonetheless, there is a rebate of up to Rs.12,500 offered by Section 87A if your taxable income does not exceed Rs.5 lakh. So, under both regimes, zero income tax may be paid if your taxable income does not cross Rs. 5 lakh.

How to use an income tax calculator AY 2021-22?

Firstly, open an income tax calculator online. Then:

  1. Pick your age bracket

  2. Disclose your annual income (salary, other sources, etc.)

  3. Indicate eligible deductions/ exemptions, like:

● HRA and LTA

● 80E (Education loan interest)

● 80C (PPF, ELSS, home loan principal, etc.)

● 24B (Home loan interest)

*Enter ‘0’ for fields that are not applicable.

To claim home loan tax deductions, keep your home loan certificate ready. With offerings like the Bajaj Housing Finance Limited Home Loan, you can download your certificate from the digital customer portal. Here, you also enjoy ample finance with a flexible tenor and attractive interest rates.

Now that you know how an income tax calculator aids tax planning, pledge to be more tax-efficient in the years to come!

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