Income tax calculator. Here’s how you can calculate your taxes for fiscal year 2021-22
Finance Minister Nirmala Sitharaman presented the 2021 Union budget on Monday and announced that there would be no change in income tax brackets in the financial statement. However, Sitharaman said people over the age of 75 who only have a pension and interest as a source of income will be exempt from filing income tax returns. The Minister of Finance also announced that Non-Resident Indians (NRIs) will be spared from double taxation.
Here is how you can calculate your income tax based on your income after the presentation of the Union budget.
How to calculate income tax?
For the salaried class, income is the sum of a person’s basic salary, housing allowance (HRA), special allowance, transport allowance and any other allowance. Certain components of the salary such as reimbursement of telephone bills and travel allowances are exempt from tax. If a person receives HRA and lives on rent, they can apply for an exemption on HRA. A standard deduction of ??40,000 was introduced in the 2018 budget which was increased to ??50,000 in Budget 2019.
These exemptions will not be available to a person if they opt for the new tax regime.
They will have to include income from all sources to calculate their income tax, including salary paid by the employer, rental income or interest paid on a mortgage, income from the sale of shares or property. home, self-employed or business or professional income, and income from other sources such as interest from a savings account, term deposits and bonds.
Here are the exemptions or deductions that are not allowed under the new tax regime:
(i) Leave of travel concession as contained in clause (5) of article 10;
(ii) Rent allowance as contained in clause (13A) of article 10;
(iii) Part of the compensation as contained in clause (14) of article 10;
(iv) allowances to deputies / deputies as contained in clause (17) of article 10;
(v) Allowance for the income of a minor as contained in clause (32) of article 10;
(vi) Exemption for the SEZ unit contained in section 10AA;
(vii) Lump-sum deduction, deduction for representation allowance and professional / employment tax as provided for in article 16;
(viii) Interest under Article 24 in respect of the independent or vacant property referred to in subsection (2) of Article 23. under any other head and would be allowed to be carried over in accordance with the law in force);
(ix) Additional depreciation under paragraph (ii a) of subsection (1) of section 32;
(x) Deductions under Articles 32AD, 33AB, 33ABA;
(xi) Various deductions for donations or scientific research expenses set out in subparagraph (ii) or subparagraph (iia) or subparagraph (iii) of subsection (1) or subsection (2AA) of article 35;
(xii) Deduction under Article 35AD or Article 35CCC;
(xiii) Deduction of family pension under paragraph (iia) of Article 57;
(xiv) Any deduction under Chapter VIA (such as sections 80C, 80CCC, 80CCD, 80D, 80DD, 80DDB, 80E, 80EE, 80EEA, 80EEB, 80G, 80GG, 80GGA, 80GGC, 80IA, 80-IAB, 80- IAC, 80 -IB, 80-IBA, etc.). However, the deduction under subsection (2) of article 80CCD (employer contribution in respect of the employee in the notified pension scheme) and article 80JJAA (for a new job) can be requested.
List of allowances authorized as notified under article 10 (14) of the law under the proposed article:
a) Transportation allowance granted to a Divyang employee to meet expenses related to travel between the place of residence and the place of work
b) Transportation allowance granted to cover transportation expenses in the performance of the duties of an office
c) Any allowance granted to cover travel expenses on tour or transfer;
d) Daily allowance intended to cover ordinary daily expenses incurred by an employee due to his absence from his normal place of work.