I am joining a new job, and my annual salary will be around 3.36LPA. How can I know if I have to pay taxes in this salary? And if yes, then, how to calculate my income tax and how to get the form and where to file it? Can I get this forms in any places where I have to visit physically or can I just fill them online? Also, I have some mutual fund investments via PayTM money as well as some international stocks via IND Money, how can I know if TDS is deducted from them or not? And if yes, then I would like to file form 12BAA to get tax benefits. Thank You!
How to calculate my income tax?
- Thread starter Amit420m
- Start date
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- income tax itr file
Narinder Kumar
KF Ace
Calculating income tax in India involves several steps, including determining your total income, applying eligible deductions, and computing tax based on the applicable tax slabs. Here's a structured guide to help you through the process:
1. Determine Your Gross Total Income:
Income from Salary: This includes your basic salary, allowances (such as House Rent Allowance [HRA], Leave Travel Allowance [LTA]), bonuses, and any other earnings from employment.
Income from House Property: Income earned from renting out property or deemed rent if the property is not self-occupied.
Income from Capital Gains: Profits from the sale of assets like stocks, bonds, or real estate.
Income from Business or Profession: Earnings from business activities or professional services.
Income from Other Sources: Includes interest from savings accounts, fixed deposits, dividends, etc.
2. Subtract Eligible Deductions:
Standard Deduction: A flat deduction of ₹50,000 is available to salaried individuals.
Section 80C Deductions: Up to ₹1.5 lakh can be claimed for investments in instruments like Public Provident Fund (PPF), Employee Provident Fund (EPF), Equity-Linked Savings Scheme (ELSS), National Savings Certificate (NSC), and life insurance premiums.
Section 80D Deductions: Deductions for health insurance premiums paid for self, family, and parents.
Other Deductions: Sections like 80E (interest on education loans), 80G (donations to specified funds), and others offer additional deductions.
3. Calculate Taxable Income:
Taxable Income = Gross Total Income – Total Deductions
4. Apply the Applicable Tax Slabs:
India offers two tax regimes: the Old Tax Regime and the New Tax Regime.
Old Tax Regime: Allows various exemptions and deductions but has higher tax rates.
New Tax Regime: Offers lower tax rates with limited exemptions and deductions.
For Financial Year 2024-25 (Assessment Year 2025-26):
Old Tax Regime Slabs:
New Tax Regime Slabs:
Note: The New Tax Regime offers a higher basic exemption limit and lower tax rates but restricts most deductions and exemptions.
5. Add Surcharge and Cess:
Surcharge: An additional charge on income tax for individuals with income exceeding ₹50 lakh, varying from 10% to 37% based on income levels.
Health and Education Cess: A 4% cess on the total tax and surcharge.
6. Compute Total Tax Liability:
Total Tax Liability = Income Tax + Surcharge (if applicable) + Health and Education Cess
Example Calculation:
Assume an individual aged 35 with a gross total income of ₹12,00,000 and eligible deductions under Section 80C amounting to ₹1,50,000.
Old Tax Regime:
Gross Total Income: ₹12,00,000
Less: Deductions (80C): ₹1,50,000
Taxable Income: ₹10,50,000
Tax Calculation:
Up to ₹2,50,000: Nil
₹2,50,001 – ₹5,00,000: 5% of ₹2,50,000 = ₹12,500
₹5,00,001 – ₹10,00,000: 20% of ₹5,00,000 = ₹1,00,000
Above ₹10,00,000: 30% of ₹50,000 = ₹15,000
Total Tax: ₹12,500 + ₹1,00,000 + ₹15,000 = ₹1,27,500
Add: Health and Education Cess (4%): ₹5,100
Total Tax Liability: ₹1,32,600
New Tax Regime:
Gross Total Income: ₹12,00,000
Less: Standard Deduction: ₹50,000
Taxable Income: ₹11,50,000
Tax Calculation:
Up to ₹3,00,000: Nil
₹3,00,001 – ₹6,00,000: 5% of ₹3,00,000 = ₹15,000
₹6,00,001 – ₹9,00,000: 10% of ₹3,00,000 = ₹30,000
₹9,00,001 – ₹12,00,000: 15% of ₹2,50,000 = ₹37,500
Total Tax: ₹15,000 + ₹30,000 + ₹37,500 = ₹82,500
Add: Health and Education Cess (4%): ₹3,300
Total Tax Liability: ₹85,800
1. Determine Your Gross Total Income:
Income from Salary: This includes your basic salary, allowances (such as House Rent Allowance [HRA], Leave Travel Allowance [LTA]), bonuses, and any other earnings from employment.
Income from House Property: Income earned from renting out property or deemed rent if the property is not self-occupied.
Income from Capital Gains: Profits from the sale of assets like stocks, bonds, or real estate.
Income from Business or Profession: Earnings from business activities or professional services.
Income from Other Sources: Includes interest from savings accounts, fixed deposits, dividends, etc.
2. Subtract Eligible Deductions:
Standard Deduction: A flat deduction of ₹50,000 is available to salaried individuals.
Section 80C Deductions: Up to ₹1.5 lakh can be claimed for investments in instruments like Public Provident Fund (PPF), Employee Provident Fund (EPF), Equity-Linked Savings Scheme (ELSS), National Savings Certificate (NSC), and life insurance premiums.
Section 80D Deductions: Deductions for health insurance premiums paid for self, family, and parents.
Other Deductions: Sections like 80E (interest on education loans), 80G (donations to specified funds), and others offer additional deductions.
3. Calculate Taxable Income:
Taxable Income = Gross Total Income – Total Deductions
4. Apply the Applicable Tax Slabs:
India offers two tax regimes: the Old Tax Regime and the New Tax Regime.
Old Tax Regime: Allows various exemptions and deductions but has higher tax rates.
New Tax Regime: Offers lower tax rates with limited exemptions and deductions.
For Financial Year 2024-25 (Assessment Year 2025-26):
Old Tax Regime Slabs:
New Tax Regime Slabs:
Note: The New Tax Regime offers a higher basic exemption limit and lower tax rates but restricts most deductions and exemptions.
5. Add Surcharge and Cess:
Surcharge: An additional charge on income tax for individuals with income exceeding ₹50 lakh, varying from 10% to 37% based on income levels.
Health and Education Cess: A 4% cess on the total tax and surcharge.
6. Compute Total Tax Liability:
Total Tax Liability = Income Tax + Surcharge (if applicable) + Health and Education Cess
Example Calculation:
Assume an individual aged 35 with a gross total income of ₹12,00,000 and eligible deductions under Section 80C amounting to ₹1,50,000.
Old Tax Regime:
Gross Total Income: ₹12,00,000
Less: Deductions (80C): ₹1,50,000
Taxable Income: ₹10,50,000
Tax Calculation:
Up to ₹2,50,000: Nil
₹2,50,001 – ₹5,00,000: 5% of ₹2,50,000 = ₹12,500
₹5,00,001 – ₹10,00,000: 20% of ₹5,00,000 = ₹1,00,000
Above ₹10,00,000: 30% of ₹50,000 = ₹15,000
Total Tax: ₹12,500 + ₹1,00,000 + ₹15,000 = ₹1,27,500
Add: Health and Education Cess (4%): ₹5,100
Total Tax Liability: ₹1,32,600
New Tax Regime:
Gross Total Income: ₹12,00,000
Less: Standard Deduction: ₹50,000
Taxable Income: ₹11,50,000
Tax Calculation:
Up to ₹3,00,000: Nil
₹3,00,001 – ₹6,00,000: 5% of ₹3,00,000 = ₹15,000
₹6,00,001 – ₹9,00,000: 10% of ₹3,00,000 = ₹30,000
₹9,00,001 – ₹12,00,000: 15% of ₹2,50,000 = ₹37,500
Total Tax: ₹15,000 + ₹30,000 + ₹37,500 = ₹82,500
Add: Health and Education Cess (4%): ₹3,300
Total Tax Liability: ₹85,800
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