An income tax calculator is an online tool that computes your taxable liability effortlessly on entering the annual income, expenses, deductions, investments, taxes paid, etc of a taxpayer. The tax calculator estimates the tax liability under the old and new regimes and helps you to make a wise decision in opting for the suitable tax regime. With the help of the online income tax calculator, the tax payers will be able to file their accurate and beneficial income tax returns with the minimal tax liability.  

We have listed below some of the benefits of using the income tax calculator for filing your income tax returns. 

1. Convenience

The income tax calculators provide the tax payers with the functionality and accessibility to fill the income tax return at the taxpayer’s convenience. The return can be filled in from anywhere and at any given point of time.

2. Accurate filing

The income tax calculators guide the tax payers on which of the tax saving investment options, deductions, allowances etc are applicable on your expenses. The income tax calculator also guides on under which head your various incomes are to be disclosed.

3. Financial planning

The income tax calculators guide the tax payers on how to invest to save taxes and which of the investment options will be beneficial to you. The calculators will guide you on how to grow your wealth by minimizing your tax liability.

4. Ease of usage

The online calculators offer smooth and easily navigable user interface. The tool can be accessed by everyone, even by those who do not have any knowledge of income tax returns. With the ease of usage offered, the income tax return filing process becomes easy for all the taxpayers. 

5. Quick results

The calculator only requires the input of the basic general and financial information. Details such as annual income, expenses, deductions, investments, taxes paid, etc of the taxpayer are required for estimating your tax liability. The tax calculator can quickly generate your tax liability and the available deductions/exceptions available for you.

How to Use the Income Tax Calculators

1. Choose the relevant financial year for which you wish to file your income tax return and want to compute your tax liability.
2. Enter the basic information such as age and income level  for accurate tax liability estimation. The tax slab applicable is determined by the age of the taxpayer.
3. Enter your taxable salary, various available exemptions such as House Rent allowance (HRA), Leave travel allowance (LTA), tax saving investments which are available as deductions under section 80 of income tax act and various incomes earned under various heads. The details are required to be entered in correct fields for accurate computation. All the requisite information can be obtained from the form 16 provided by your organization.
4. After entering all the requisite information, click on “Calculate”. The results will provide your tax computation under your old and new tax regime.
5. It is advised to peruse the beneficial tax computation under your regime of preference.

Essentials of Using Income Tax Calculator

It is essential that all the taxpayers having income exceeding the basic exemption limit file their returns timely and accurately to fulfil their duty as a responsible citizen. It is essential to collate and disclose all your requisite information correctly. Do browse through our above steps to guide you to use the income tax calculator efficiently!