Ticker

6/recent/ticker-posts

Income Tax Calculation Explained for 2021 – 2022

 


According to Government reports, around 1.5 crore Indians pay income tax, which accounts for just over 1% of the country’s total population. Even though the emergence of advanced technology and transparent filing procedure has improved the system, individuals often find it challenging to understand the ever-changing tax laws, tax rebates, etc. 

In order to simplify the process of calculating tax liabilities, online tools like income tax calculator 2021 have been introduced. Taxpayers can provide certain information to estimate their taxes, even compare their liabilities for both old and new tax slabs, introduced in the Union Budget 2020-21.

However, before delving further into understanding the online tax calculator’s mechanism, it is necessary to have a complete idea regarding the current tax regime and how it influences the tax liabilities. It is advisable to start with understanding different income tax slabs before switching to the new tax regime from the existing one.

Tax slabs as per FY 2020-21

The income tax slab system refers to different tax rates depending on different ranges of income. This means the tax rates will inevitably increase in case the taxpayer’s monthly income increases. In order to draw a comparison between the old income tax slab for AY 2020-21 and for AY 2021-22, here are a few pointers individuals should take note of:

       Annual income up to Rs.2.5 lakh: Nil income tax.

       Individuals with yearly income between Rs.2.5 lakh to Rs.5 lakh: 5% (Also, tax rebate under Section 87A will be available)

       Between Rs.5 lakh and Rs.7.5 lakh: 10%

       Annual income range from Rs.7.5 lakh to Rs.10 lakh: 15%

       Income range between Rs.10 lakh and Rs.12.5 lakh: 20%

       Between Rs.12.5 lakh to Rs.15 lakh: 25%

       Individuals having an annual income of more than Rs.15 lakh: 30%

Having a clear understanding of your tax liabilities is important, especially if you are planning to avail home loans to invest in housing properties. In this regard, there are certain home loan tax exemptions and benefits every new and existing borrower should have at their fingertips. Apart from the aforementioned aspects, there are certain other tax exemptions available under the new tax regime. For instance -

       For NRIs, irrespective of age, the tax exemption limit will be Rs.2.5 lakh.

       As a part of your income tax liability, 4% of additional health and education cess will be added where the rate has been increased from the previous FY. With such changes, it is necessary to keep track of your tax liabilities and keep calculating them using an income tax calculator 2021.

Understanding these basic changes and relevant aspects of the income tax regime is required to plan out other expenses as well. Additionally, tax-related documents like ITR are extremely important while availing home loans. Nonetheless, if you are deemed creditworthy by financial institutions, you can also enjoy the benefits of pre-approved others and do away with undertaking the complicated documentation process.

Apart from home loans, these offers are also available on other financial products, including loan against property, and help expedite the home loan application process. In order to make the most of its benefits, make sure to check your pre-approved offer by submitting your name and contact number.

While calculating your tax liabilities using the income tax calculator 2021, make sure to provide exemption details by way of interest paid on loans, interest income, taxable salary, etc. Also, take note of home loan tax benefits for under-construction property work, to ensure you can maximise your benefits on tax payments.

Post a Comment

2 Comments

  1. Its very interesting while reading it,thank you for posting such a good article.
    Insurance Companies in Bangalore .We provide a wide range of the most unique and most secure insurance schemes for your loved ones.

    ReplyDelete