Income Tax Calculator

Income tax planning is an important part of financial planning for everyone. Saving on income taxes is one method that can help you create an effective financial plan. Everyone nowadays is aware of income tax and their tax liability, and as a result, people are eager to calculate their income tax. Use our Income Tax Calculator to determine your tax liability/estimates as well as your tax refund.

What is a Paytm income tax calculator?

An income tax calculator is a web-based application that assists taxpayers with basic tax calculations. Individuals can calculate their income tax liability in a modern and convenient manner by using an income tax calculator. The Paytm income tax calculators are available for free and can be used to calculate one's income tax.

A Paytm income tax planning with an income tax calculator allows you to take full advantage of deductions, exemptions, reliefs, and rebates and thereby lowering your tax liability.

How to use the Paytm income tax calculator?

An income tax calculator is a tool that allows you to calculate your income tax and total tax liability. This is calculated using your annual income, applicable income tax slab, and the deductions available under Sections 80 C and 80D. The income tax calculator also suggests investment options based on your financial portfolio, its benefits, and its ability to reduce your tax liability.

Here is the step-by-step procedure to use Paytm Income Tax Calculator online:

Step 1: Enter Annual Income: Enter the details of your income earned under various income categories, such as salary, interest income from deposits, capital gain, house rent, and other taxable income.

Step 2: Enter Exemptions: Enter the details of the exemptions available against the income earned during the fiscal year. This exemption applies to salary, self-occupied and rented property.

Step 3: Tax Deductions: Describe the deductions available under Section 80C for investments and expenses, health insurance, NPS, education loans, and donations.

Step 4: Basic Information: Enter your age and the amount of taxes you paid during the fiscal year. Your age will help determine the amount of tax owed.

Step 5: Taxation In this step, the calculator computes the total tax under both the new and old schemes. It also determines how much more money must be invested in order to effectively save taxes. Furthermore, taxpayers can go back in time and change the values as necessary.

Deductions Involved in Income Tax Calculation

• Section 80C
• Section 80D Mediclaim
• Home Loan (Section 24B)
• House Rent Allowance

You must enter your investments that qualify for income tax deductions under the following categories after entering your annual income into the Income tax calculator:

Section 80C

Section 80C includes certain instruments in which you can invest and save up to Rs. 45,000 per year, depending on your tax bracket. These instruments include public provident funds (PPF), term insurance plans, unit-linked insurance plans (ULIPs), and National Saving Certificates, bank fixed deposits (FDs), equity-linked savings schemes (ELSS). If you invest in all of these instruments, you can deduct a maximum of Rs. 1.5 lakh from your gross total income or taxable income.

In addition, the section allows for an additional deduction of up to Rs. 50,000 against the amount invested in a new pension scheme (NPS). However, in order to make the best use of these instruments for claiming deductions under the Income Tax Act, it is necessary to understand them thoroughly.

Section 80D mediclaim

This income tax section allows you to deduct medical expenses for yourself or dependent family members. However, a maximum of Rs. 35,000 can be claimed as an income tax deduction under Section 80D. This includes a maximum of Rs. 25,000 for self and dependent family members, as well as Rs. 25,000 for parents. If your parents are over the age of 60, their maximum deduction is Rs. 30,000. The benefit under Section 80D is in addition to the Rs. 1.5 lakh deduction under Section 80C.

There are primarily four types of health insurance policies to choose from. Critical illness plans, hospitalisation plans, medical insurance plans, super top-up plans, and are among them.

Home loan (Section 24B)

According to this section, any amount paid as interest on a home loan up to Rs. 2,00,000 during that financial year can be claimed as an income tax deduction from your taxable income.

House rent allowance

According to the Income Tax Act of 1961, the amount you pay for house rent is also deductible from your taxable income. However, only the smallest of the three amounts listed below is eligible for the exemption:

1. Received actual house rent allowance (HRA)
2. Actual rent paid less than 10% of base salary
3. 50% of your basic salary if you live in Mumbai, Delhi, Chennai, or Kolkata, or 40% if you live elsewhere.

This amount is in addition to the exemptions and deductions allowed under Sections 80C, 80D, and 24B.