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Income Tax Calculator - Rules & Tax Slabs

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 2020-21.

Calculate Your Taxes

How to calculate income tax? (See example)


Income tax calculation for the Salaried

Income from salary is the sum of Basic salary + HRA + Special Allowance + Transport Allowance + any other allowance. Some components of your salary are exempt from tax, such as telephone bills reimbursement, leave travel allowance. If you receive HRA and live on rent, you can claim exemption on HRA. Calculate exempt portion of HRA, by using this HRA Calculator.

On top of these exemptions, a standard deduction of Rs 40,000 was introduced in budget 2018. This has been increased to Rs 50,000 in budget 2019.

In case you opt for the new tax regime, these exemptions will not be available to you.

Let's understand income tax calculation under the current tax slabs and new tax slabs (optional) by way of an example. Neha receives a Basic Salary of Rs 1,00,000 per month. HRA of Rs 50,000. Special Allowance of Rs 21,000 per month. LTA of Rs 20,000 annually. Neha pays a rent of Rs 40,000 and lives in Delhi.

NatureAmountExemption/DeductionTaxable(Old regime)Taxable(New regime)
Basic Salary12,00,000-12,00,00012,00,000
HRA6,00,0003,60,0002,40,0006,00,000
Special Allowance2,52,000-2,52,0002,52,000
LTA20,00012,000 (bills submitted)8,00020,000
Standard Deduction-50,00050,000-
Gross Total Income from Salary16,50,00020,72,000

To calculate Income tax, include income from all sources. Include:

  • Income from Salary (salary paid by your employer)
  • Income from house property (add any rental income, or include interest paid on home loan)
  • Income from capital gains (income from sale purchase of shares or house)
  • Income from business/profession (income from freelancing or a business or profession)
  • Income from other sources (saving account interest income, fixed deposit interest income, interest income from bonds)

Neha has income from interest from savings account of Rs 8,000 and a fixed deposit interest income of Rs 12,000 during the year. Neha has made some investments to save income tax. PPF investment of Rs 50,000. ELSS purchase of Rs 20,000 during the year. LIC premium of Rs 8,000. Medical insurance paid of Rs 12,000. Here are the deductions Neha can claim under the old tax regime.

NatureMaximum DeductionEligible investments/expensesAmount claimed by Neha
Section 80CRs.1,50,000PPF deposit Rs 50,000, ELSS investment Rs 20,000, LIC premium Rs 8,000. EPF deducted by employer(Neha’s contribution) = Rs 1,00,000 *12% *12 = 1,44,000Rs 1,50,000
Section 80DRs 25,000 for self Rs 50,000 for parentsMedical insurance premium Rs 12,000Rs 12,000
Section 80TTA10,000Savings account interest 8,000Rs. 8,000


Calculation of gross taxable income in India (Old regime)


NatureAmountTotal
Income from Salary16,50,000
Income from Other Sources20,000
Gross Total Income16,70,000
Deductions
80C1,50,000
80D12,000-
80TTA8,0001,70,000
Gross Taxable Income15,00,000
Total tax on above (including cess)2,73,000


Calculation of gross taxable income in India (New regime)

NatureAmountTotal
Income from Salary20,72,000
Income from Other Sources20,000
Gross Total Income20,92,000
Total tax on above (including cess)3,79,704



This is how income tax is calculated for Neha under new tax regime

Up to Rs 2,50,000Exempt from tax0
Rs 2,50,000 to Rs 5,00,0005% (5% of Rs 5,00,000 less Rs 2,50,000)12,500
Rs 5,00,000 to Rs 7,50,00010% (10% of Rs 7,50,000 less Rs 5,00,000)25,000
Rs 7,50,000 to Rs 10,00,00015% (15% of Rs 10,00,000 less Rs 7,50,000)37,500
Rs 10,00,000 to Rs 12,50,00020% (20% of Rs 12,50,000 less Rs 10,00,000)50,000
Rs 12,50,000 to Rs 15,00,00025% (25% of Rs 15,00,000 less Rs 12,50,000)62,500
More than Rs Rs 15,00,00030% (30% of Rs 20,92,000 less Rs 15,00,000)1,77,600
Cess4% of total tax (4% of Rs 12,500 + Rs 25,500+ Rs 37,500 + Rs 50,000 + Rs 62,500 + Rs 1,77,600)14,604
Total Income TaxRs 12,500 + Rs 25,500+ Rs 37,500 + Rs 50,000 + Rs 62,500 + Rs 1,77,600 + Rs 14,604Rs 3,79,704

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;

(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.

Frequently Asked Questions

  • How much tax should I pay on my salary?

    You will be required to pay a tax depending on the income slab you belong to.

    Income Tax Rates applicable for individuals under 60 years of age
    Income SlabApplicable Tax Rate
    Up to Rs 2.50 lakhNil
    Above Rs 2.50 lakh and up to Rs 5 lakh5%
    Above Rs 5 lakh and up to Rs 7.5 lakh10%
    Above Rs 7.5 lakh and up to Rs 10 lakh15%
    Above Rs 10 lakh and up to Rs 12.5 lakh20%
    Above Rs 12.5 lakh and up to Rs 15 lakh25%
    Above Rs 15 lakh30%

    Suppose you have a gross taxable income of Rs 7.50 lakh after all the deductions/exemptions, your tax will be calculated as follows:

    Income SlabApplicable Tax RateApplicable IncomeTax (in Rs)
    Up to Rs 2.50 lakhNo tax00
    Above Rs 2.50 lakh and up to Rs 5 lakh5%Rs 2.50 lakh12,500
    Above Rs 5 lakh and up to Rs 7.5 lakh10%Rs 2.50 lakh25,000
    Total Income Tax Payable37,500

    Hence, you will be required to pay a tax of Rs 37,500 (excluding cess) on your gross taxable income i.e. Rs 7.50 lakh.

  • What is the maximum non-taxable income limit?

    The maximum limit of non-taxable income for an individual is set at Rs 2.5 lakh. However, you can also get a rebate of Rs 2,500 under section 87A if you have a total income of less than Rs 3.5 lacs for FY 2018-19. From FY 2019-20 onwards, the rebate has been increased to Rs 12,500 for an income less than Rs 5 lakh. So, that means an individual earning less than 5 lakh will not be required to pay any income tax from FY 2019-20 onwards. If you have tax saving investments under section 80C of up to Rs 1.5 lakh then you will not have to pay any taxes till Rs 6.5 lakhs

  • Does everyone have to file their income tax returns?

    If the income of an individual is below the basic exemption limit then he is not required to file income tax returns. Though those who have income less than Rs 2.5L and want to claim an income tax refund can only claim the refund by filing an ITR. Otherwise, it is mandatory to file income tax returns in any other case. Read more here.

  • Does the income tax calculator calculate for TDS?

    No, the income tax calculator does not compute the Tax Deducted at Source (TDS). However, it calculates your tax liability for the assessment year.

  • What are the details you need when you're e-filing your income tax returns?

    1. Basic information such as PAN, Aadhar Card details, and current address.

    2. All the bank account details held in a financial year.

    3. Income proofs like current salary details, income from investments (like FDs, savings bank account) etc.

    4. All the deductions claimed under Section 80 or Chapter VI-A.

    5. Tax payment details such as TDS and advance tax payments.