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The Income Tax Calculator -  The Tool That Helps You Calculate Your Tax
Tax

The Income Tax Calculator - The Tool That Helps You Calculate Your Tax

About Income Tax 

Income tax is defined as a tax imposed on individuals or entities (taxpayers) in respect of the income or profits earned by them (commonly called taxable income). Income tax generally is computed as the product of a tax rate times the taxable income. Taxation rates may vary by type or characteristics of the taxpayer and the type of income

You may also like to read about GST.

What is Income Tax Calculator?

The Income tax calculator is an easy-to-use online tool that helps you estimate your taxes based on your income after the Union Budget is presented. We have updated our tool in line with the income tax changes proposed in the Union Budget 2022-23.(Read the highlights here)

How to use the Income tax calculator for FY 2022-23 (AY 2023-24)?

Below are the steps to use the tax calculator:

1. Choose the financial year for which you want your taxes to be calculated.

2. Select your age accordingly. Tax liability in India differs based on the age groups.

3. Click on 'Go to Next Step'

4. Enter your taxable salary i.e. salary after deducting various exemptions such as HRA, LTA, standard deduction, and so on. (if you want to know your tax liability under the old tax slabs)

Or else, just enter your salary i.e salary without availing exemptions such as HRA, LTA, standard deduction, professional tax and so on. (if you want to know your tax liability under the new tax slabs)

5. Along with taxable salary, you must enter other details such as interest income, rental income, interest paid on home loan for rented, and interest paid on loan for self occupied property.

6. For Income from Digital Assets, enter the net income ( Sale consideration less Cost of Acquisition), such income is taxed at 30% Plus applicable surcharge and cess.

7. Click on 'Go to Next Step' again.

8. In case, you want to calculate your taxes under the old tax slabs,you will have to enter your tax saving investments under section 80C, 80D, 80G, 80E and 80TTA.

9. Click on 'Calculate' to get your tax liability. You will also be able to see a comparison of your pre-budget and post-budget tax liability (old tax slabs and new tax slabs).

Note: Whichever field is not applicable, you can enter "0".

What are the exemptions/ deductions that are disallowed under the new tax regime?

Individual or HUF opting for taxation under the newly inserted section 115BAC of the Act shall not be entitled to the following exemptions/deductions:

(i) Leave travel concession as contained in clause (5) of section 10;

(ii) House rent allowance as contained in clause (13A) of section 10;

(iii) Some of the allowance as contained in clause (14) of section 10;

(iv) Allowances to MPs/MLAs as contained in clause (17) of section 10;

(v) Allowance for the income of minor as contained in clause (32) of section 10;

(vi) Exemption for SEZ unit contained in section 10AA;

(vii) Standard deduction, deduction for entertainment allowance and employment/professional tax as contained in section 16;

You can also read about Form 16.

(viii) Interest under section 24 in respect of self-occupied or vacant property referred to in sub-section (2) of section 23. (Loss under the head income from house property for the rented house shall not be allowed to be set off under any other head and would be allowed tobe carried forward as per extant law);

(ix) Additional deprecation under clause (iia) of sub-section (1) of section 32;

(x) Deductions under section 32AD, 33AB, 33ABA;

(xi) Various deduction for donation for or expenditure on scientific research contained in sub-clause (ii) or sub-clause (iia) or sub-clause (iii) of sub-section (1) or sub-section (2AA) of section 35;

(xii) Deduction under section 35AD or section 35CCC;

(xiii) Deduction from family pension under clause (iia) of section 57;

(xiv) Any deduction under chapter VIA (like section 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, deduction under sub-section (2) of section 80CCD (employer contribution on account of the employee in notified pension scheme) and section 80JJAA (for new employment) can be claimed.

Following allowances shall be allowed as notified under section 10(14) of the Act to the Individual or HUF exercising option under the proposed section:

a) Transport Allowance granted to a divyang employee to meet the expenditure for the purpose of commuting between place of residence and place of duty

b) Conveyance Allowance granted to meet the expenditure on conveyance in performance of duties of an office;

c) Any Allowance granted to meet the cost of travel on tour or on transfer;

d) Daily Allowance to meet the ordinary daily charges incurred by an employee on account of absence from his normal place of duty.

You can even get your tax computation on your mail.

You can also read about Income Tax Verification.

Form 16 – Here Is About Tax Deducted At Source
Tax

Form 16 – Here Is About Tax Deducted At Source

Income tax law is an elaborate measure covering various aspects of tax that is procured from the people who are earning beyond a certain level. Income Tax can also be defined as price which tax payers have to pay to the government. The government in turn uses these funds for the development of the social infrastructure. 

Read about The Income Tax Calculator.

An important part of Income Tax is TDS or Tax Deducted at Source, which is seen as form 16

About Form 16: 

Form 16 is essentially a certificate issued by employers to their employees. It provides a validation that TDS has been deducted and deposited with the government authorities on behalf of the employee. It gives a detailed summary of the salary paid to the employee and the TDS amount deducted on the same.

What is Form 16?- Basics

Form 16 contains the information needed to prepare and file your income tax return. It shows the breakup of salary income and the TDS amount deducted by the employer. It has two components – Part A and Part B (discussed in detail below).

Employers must issue it every year on or before 15th June of the following year, immediately after the financial year in which the tax is deducted. If you lose your Form 16, you can request a duplicate from your employer.

Part A of Form 16

Part A of Form 16 provides details of TDS deducted and deposited quarterly details of PAN and TAN of the employer and other information.

An employer can generate and download this part of Form 16 through the TRACES (https://www.tdscpc.gov.in/app/login.xhtml) portal. Before issuing the certificate, the employer should authenticate its contents.

It is important to note that if you change your job in one financial year, each employer will issue a separate Part A of Form 16 for the period of employment. Some of the components of Part A are:

Name and addre

TAN and PAN of emplss of the employeroyer

PAN of the employee

Summary of tax deducted and deposited quarterly, which is certified by the employer

Part B of Form 16

Part B of Form 16 is an Annexure to Part A. Part B is to be prepared by the employer for its employees and contains details of the breakup of salary and deductions approved under Chapter VI-A.

Deductions allowed under the Income Tax Act (under chapter VIA):

The list of deductions mentioned are as below:

Deduction for life insurance premium paid, contribution to PPF etc., under Section 80C

Deduction for contribution to pension funds under Section 80CCC

Deduction for employee’s contribution to a pension scheme under Section 80CCD(1)

Deduction for taxpayer’s self contribution to a notified pension scheme under Section 80CCD(1B)

Deduction for employer’s contribution to a pension scheme under Section 80CCD(2)

Deduction for health insurance premium paid under Section 80D

Deduction for interest paid on loan taken for higher education under Section 80E

Deduction for donations made under Section 80G

Deduction for interest income on savings account under Section 80TTA

You may also read about Income Tax Verification.

Relief under Section 89

Details required from Form 16 while filing your return

With reference to the image below, here is where you can locate certain information for filing your income tax return for FY 2020-21 (AY 2021-22).

Allowances exempt under Section 10

Break up of deductions under Section 16

Taxable salary

Income (or admissible loss) from house property reported by an employee and offered for TDS

Income under the head ‘Other Sources’ offered for TDS

Break up of Section 80C deductions

The aggregate of Section 80C deductions (gross and deductible amount)

Tax payable or refund due

What is the eligibility criteria for Form 16?

According to the regulations issued by the Finance Ministry of the Indian Government, every salaried individual whose income falls under the taxable bracket is eligible for Form 16.

If an employee’s income does not fall within the tax brackets set, they will not need to have Tax Deducted at Source (TDS). Hence, in these cases, the company is not obligated to provide Form 16 to the employee.

However, these days, as a good work practice, many organisations issue this certificate to the employee as it contains a consolidated picture of the individual’s earnings and has other additional uses.

Points to be noted while checking Form 16

Once an individual receives Form 16 from the employer, it is their responsibility to ensure that all the details are correct.

One should verify the details mentioned in Form 16, for example, details of the amount of income, TDS deducted, etc.

If any of the detail is mentioned incorrectly, one should immediately reach out to the organisation’s HR/Payroll/Finance department and get the same corrected.

The employer would then correct their end by filing a revised TDS return to credit the TDS amount against the correct PAN. Once the revised TDS return is processed, the employer will issue an updated Form 16 to their employee.

Income Tax Verification: The checking of your filed taxes
Tax

Income Tax Verification: The checking of your filed taxes

Income Tax Verification  

It is important that all the bonafide citizens of the country, who are earning their income above the taxable limit should file their income tax returns on time and in a proper manner. 

It is also important that they should know properly how to file their income tax returns. And filing their returns they should also verify whether they have filed the returns in a proper mode and manner. 

Verification of IT returns is important as any minor mistake in the filing of tax returns may cause serious problems and difficulties. 

Also read about TDS Returns.

Following are the means and methods to verify the filing of IT returns: 

1. Why should we e-Verify?

You need to verify your Income Tax Returns to complete the return filing process. Without verification within the stipulated time, an ITR is treated as invalid. e-Verification is the most convenient and instant way to verify your ITR.

You can also e-Verify other requests / responses / services to complete the respective processes successfully, including verification of:

Income Tax Forms (through online portal / offline utility)

e-Proceedings

Refund Reissue Requests

Rectification Requests

Condonation of Delay in filing ITR after due Date

Service Requests (submitted by ERIs)

Uploading ITR in bulk (by ERIs)

2. What are the different ways in which I can e-Verify my returns?

You can e-Verify your returns online using:

OTP on mobile number registered with Aadhaar, or

EVC generated through your pre-validated bank account, or

EVC generated through your pre-validated demat account, or

EVC through ATM (offline method), or

Net Banking, or

Digital Signature Certificate (DSC).

3. I have filed my return more than 120 days ago. Can I still verify my returns online?

Yes. You need to submit request for condonation of delay (refer to the Service Request user manual) by providing an appropriate reason for the delay. But the return will be taken as verified only after approval of the condonation request by the Income Tax Department.

You may also read Profession Is The Link Between An Individual And The Larger Society

4. Can an Authorized Signatory / Representative Assessee e-Verify the return on my behalf?

Yes. The Authorized Signatory / Representative Assessee can e-Verify the return on behalf of the assessee using any of the following methods:

Aadhaar OTP: OTP will be sent to the Authorized Signatory's / Representative Assessee's mobile number registered with Aadhaar.

Net Banking: EVC generated through net banking will be sent to the Authorized Signatory's / Representative Assessee's mobile number and email ID registered with the e-Filing portal.

Bank Account / Demat Account EVC: EVC generated through the pre-validated and EVC-enabled bank account / demat account will be sent to the Authorized Signatory's / Representative Assessee's mobile number and email ID registered with the e-Filing portal.

5. How will I know that my e-Verification is complete?

In case you are e-Verifying your return:

A success message will be displayed along with a Transaction ID

An email will be sent to your email ID registered with the e-Filing portal

In case you are an Authorized Signatory / Representative Assessee:

A success message will be displayed along with a Transaction ID

After successful verification, an email confirmation will be sent to the primary email ID of both Authorized Signatory's / Representative Assessee's and your email ID registered with e-Filing portal

6. When am I required to file / apply for condonation of delay?

It is suggested to file a condonation request as soon as you notice that you have not verified your return even after 120 days of filing.

7. My registered mobile number is not updated with Aadhaar, can I still e-Verify my return using Aadhaar OTP?

No. You need to update your mobile number with Aadhaar to e-Verify your return using Aadhaar OTP.

8. My demat account / bank account is inactive, can I e-Verify my return with this account?

No. You need to have an active demat account / bank account which needs to be pre-validated and EVC-enabled on e-Filing portal to e-Verify your return using your demat account / bank account.

9. Will delay in e-Verification attract any penalty?

If you do not verify in time, your return is treated as not filed and it will attract all the consequences of not filing ITR under the Income Tax Act, 1961. However, you may request condonation of delay in verification by giving appropriate reason. Only after submission of such a request, you will be able to e-Verify your return. However, the return will be treated valid only once the condonation request has been approved by the competent Income Tax Authority.

10. What is EVC?

An Electronic Verification Code (EVC) is a 10-digit alpha-numeric code which is sent to your mobile number and email ID registered with the e-Filing portal / bank account / demat account (as the case may be) during the process of e-Verification. It has a 72-hour validity from the time of its generation.

11. What to do in case ITR-V is rejected?

You can see the reason for rejection on your e-Filing Dashboard. You may send another ITR-V or choose to e-Verify the ITR online.

12. What are the benefits of e-Verification?

You do not need to send a physical copy of your ITR-V to CPC, Bangalore.

Verification of your ITR happens instantly, which saves you from the delay in transit of ITR-V.

You can e-Verify using any of the various methods - Aadhaar OTP / EVC (using pre-validated bank / demat account) / Net Banking / Digital Signature Certificate (DSC).

13. Is it mandatory to e-Verify your return?

No. e-Verification is just one method of verifying your filed ITR. You can choose either of the two methods to verify your filed ITR:

e-Verify returns online, or

Send a physical copy of your duly signed ITR-V to CPC, Bangalore.

14. I have filed ITR and sent the physical copy of ITR-V to CPC.

However, I received a notification from CPC that they have not received the ITR-V and 120 days have lapsed since the date of filing. What can I do?

You can e-Verify your ITR online after submitting a condonation request. 

15. What is the difference between pre-login e-Verification and post-login e-Verification?

You can choose to e-Verify your filed ITR before or after logging in to e-Filing portal. The only difference is that while using the pre-login service, you will be required to provide the details of your filed ITR (PAN, Assessment Year and Acknowledgment Number) before e-Verifying the ITR. If you choose to use the post-login service, you will be able to choose the respective record of ITR filed rather than provide any such details before e-Verifying the ITR.

16. Can I e-Verify my ITR using Digital Signature Certificate?

Yes. DSC is one of the ways to e-Verify. However, you will be able to e-Verify using Digital Signature Certificate (DSC) immediately after filing your ITR.

You will not be able to choose DSC as a preferred option to e-Verify in case you have selected the e-Verify Later option while submitting Income Tax Returns.

You may also read about The Income Tax Calculator.

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