Overview

The Income Tax Calculator is an online tool which enables the e-Filing useto calculate their tax as per the provisions of Income Tax Act, Income-tax rules, Notifications etc. by filling in the inputs with respect to income(s) earned during the financial year and deductions claimed as per the Act. The calculator provides an estimat of tax under both the tax regime with a comparison of tax  the old and new regime¹.

Generally, income tax laws are tweaked with every Union Budget. The algorithm of the online tax calculator is updated regularly to ensure that you get tax estimation and calculation as per the latest . To provide the income tax liability, the tax calculator requires certain information, such as the income earned in the financial year and investments made during the same financial year. With the number of income tax provisions , it is better to calculate the income tax outgo online before filing returns. The income tax calculator provides the exact information on the available deductions and exemptions. You can modify your investments as per the tax projection generated by the income tax calculator².

Income tax is a tax charged on the annual income of an individual or business earned in a financial year. The Income Tax system in India is governed by The Income Tax Act, 1961, which lays out the rules and regulations for income tax assessment, calculation, and collection.

The income tax collected from eligible individuals  one of the sources of government revenue The income tax charged depends on a host of factors like the amount of income, type of income, age and investments. Certain investments are eligible for tax deductions and exemptions and help in reducing the income tax liability. All businesses and individuals have to file an income tax return every year to know their tax liability or to get a tax refund, if any².

Tax planning has become a crucial component of overall financial strategy. It involves making smart investments to meet life goals while also minimising tax liability. Bajaj Allianz Life’s Income Tax Calculator is an efficient tool for effective tax planning. With the Bajaj Allianz Life income tax calculator, you do not have to worry about missing any of the tax deductions or exemptions. This online tax calculator is easy to use and has a simple user interface. Here are the simple steps to follow to use the Bajaj Allianz Life income tax calculator²:

1. Visit https://www.bajajallianzlife.com/ and look for the “Tools & Calculators” tab on the home page.

2. Select the "Income tax calculator" on the drop-down list of the "Tools & Calculators" tab.
3. The income tax calculator page will open. It consists of three sections: Personal & Income Details, Your Overall Deductions, and Your Tax Savings.

4. Next, fill in your Personal & Income Details, such as the type of city- metro or non-metro city- and your occupation, whether you are salaried or self-employed/business. Depending on the type of occupation chosen, the tax calculator will ask for different information. If you are a salaried person, you will have to provide all details such as Annual income (with all allowance details), HRA received (per annum), Basic salary (Per Annum), Income from other sources and Rent paid (Per Annum). On the other hand, if you opt for self-employed/business, you will have to provide an estimate of your annual income and income from other sources.
5. In the next step, you will have to provide the details of various investments made by you which are eligible for deductions in the financial year under Section 80C, 80D, 80CCD, 80E etc. of the Income Tax Act.

6. After providing all the details of deductions, click on “check your tax.” The income tax calculator will calculate your tax liability under the old regime as well as the new regime, stating your total taxable income, tax deductions and tax payable under both the regimes. You can easily compare which tax regime would be suitable for you to save on taxes. The calculator also provides suggestions based on your input. You can recalculate the tax payable estimates again with different inputs multiple times, all for free².

The government introduced a new tax regime in the Union Budget 2020³. The new tax regime presented different tax slabs than the existing old regime. However, the exemptions and deductions available in the old tax regime were done away with in the new regime³.

The new tax regime is optional, and individuals shifting to the new tax system will have to forego the various deductions and exemptions available under the tax regime. The new tax regime came into effect on April 1, 2020². The income tax slabs under both regimes are different. They are as follows⁵:

Calculation of gross taxable income (new regime)

The tax slab under the new regime for business ownersis as follows

The above tax calculated will be increased by a surcharge if applicable and Health and Education Cess @4%.

Under the old tax regime, the taxpayers were categorised into three broad groups, which included the following:

• Resident individuals: Individuals below the age of 60 years
• Senior Citizens: Individuals aged above 60 years but below 80 years
• Super Senior Citizens: Individuals above the age of 80 years²

The tax slabs for the three board groups under the Old Tax Regime are different. However, under the new tax regime, the tax slabs for individuals of all age groups are uniform. Here is the detailed table: 
 

Just like deductions under various sections of the Income Tax Act, you can also utilize exemptions to reduce your tax liabilities. Income tax exemptions are largely dealt by Section 10 of the . Here are some of the key tax exemptions available in India.

House Rent Allowance

One should understand the HRA calculation clearly to enjoy income tax exemption. The exemption received for HRA will be a minimum of

• Total HRA received from the employer
• 50% of the income of individuals living in Delhi, Mumbai, Kolkata or Chennai and
• 40% of those living in non-metro cities
• Rent less than 10% of income.
  

Child Education Allowance

A maximum of Rs 100 per month per child for a maximum of two children can be availed as exemption on child education allowance¹⁷.

Hostel Allowance

Subsidies on hostels are exempt up to Rs 300 per month for each child for a maximum of two children¹⁸.

Interest paid on housing loans

An income tax exemption of up to Rs 2 lakh on the interest paid for home loan can be availed on the condition that the house is constructed or acquired within 5 years from the end of financial year in which home loan is taken¹⁹.

Filing income tax returns is mandatory for people with income more than the limit allowed for exemption. It is also compulsory to file the returns online. However, there are certain exceptions.

• Individuals above the age of 
• Individuals with an income of less than Rs 5 lakh and not claiming a refund

Income tax return can be filed online in a few simple steps

• Visit the incometaxindiaefiling.com website and register on the website
• Use the permanent account number or PAN as the user ID
• To get an idea of the tax credit, view the Form 26AS, also known as the tax credit statement
• The amount in the TDS certificate must tally with the figures in Form 26AS
• Click on the income tax return form and choose the financial year
• Download the relevant ITR form
• After downloading, open the attached excel sheet and fill out all the details using the TDS certificate/Form 16
• Check the tax payable amount by clicking the ‘calculate tax’ tab
• Pay the applicable tax and fill in the challan details
• Confirm all the data by pressing the ‘validate’ button
•  Generate a XML file and save on your system
•  In the next step, go to the ‘upload return’ section in the portal’s panel and upload the saved XML file
• A pop-up will ask you to digitally sign the file for verification

If you have a digital signature press ‘yes’ and if not, then click ‘no’

• The acknowledgement form, ITR Verification (ITR-V) will be generated
• Take a print out of the form and sign it in blue ink
•  Send the form by ordinary speed post to the following the address within days of the online submission
• Income-Tax Department-CPC,
• Bangalore - 560 . Karnataka.

Follow the given steps to file ITR 1 online

•   The ITR 1 form can be submitted online by uploading XMS
• Login to e-filing application
• Go to ‘e-file’ and ‘Prepare and Submit ITR Online’
• Select the correct income tax return form and the assessment year
• Fill in the details and then click the submit button and select Digital Signature Certificate
• Click on ‘submit’
• After submission, acknowledgement detail is displayed
• Click on the link to generate the printout of the acknowledgement/ITR-V form

Here’s how life insurance plans help in saving tax liability –

• If you buy the policy on or after 1st April 2012 and the premium is not more than 10% of the sum assured, the premium will be allowed as a deduction under Section 80C up to ₹1.5 lakhs.¹⁰

   

• However, in case the plan is issued before this date, the premium should be within 20% of the death sum assured to claim the tax benefit¹⁰

   

• If the life insured has a disability mentioned under section 80U or suffers from a disease specified under Section 80DDB, and the plan is issued on or after 1st April 2013, the premiums should be up to 15% of the death sum assured to be eligible for deduction

   

• The death benefit is tax-free¹⁰

   

• For ULIPs bought on or after 1st February 2021, the total maturity benefit will be tax-free if the aggregate annual premium is up to an amount of Rs.2.5 lakhs¹¹. If the premium exceeds Rs.2.5 lakhs, the gain from such policy will be taxable as capital gain¹¹. It would be taxed as follows –

   

• In the case of equity funds, returns up to an amount of Rs.1.25 lakhs would be tax-free. If the returns exceed Rs.1.25 lakh, the excess would be taxed at 12.5%¹²
• In the case of debt funds, .

However, the taxation of policies wherein the annual premium exceeds Rs.2.5 lakhs is applicable only on policies issued on or after 1st February 2021. If you have bought the policy before this date, the maturity benefit would be exempted even if the premium is more than Rs.2.5 lakhs provided policy is satisfying the criteria mentioned in Section 10(10D) of the Act¹¹.

For traditional policies, the maturity benefit will be tax-free under Section 10(10D). However, for policies issued on or after 1^st April 2023, the maturity benefit will be tax-free if the aggregate premiums are up to ₹5 lakhs. If the premiums are higher, the excess returns would be taxable¹¹.

Understand the tax slabs and find the right tax regime which gives you the lowest tax liability. You can use the Bajaj Allianz income tax calculator to find your tax liability and plan your taxes efficiently. Stay updated on the changes in the tax slabs and rates with the latest budget updates so that you can plan your savings and investments in advance to save maximum tax. 

Sources:

1. https://www.incometax.gov.in/iec/foportal/income-tax-calculator
2. https://www.bajajallianzlife.com/life-insurance-calculator/income-tax-calculator.html
3. https://cleartax.in/s/old-tax-regime-vs-new-tax-regime
4. https://cleartax.in/s/income-tax-rebate-us-87a
5. https://cleartax.in/s/income-tax-slabs
6. https://www.businessinsider.in/pe₹onal-finance/news/opted-for-the-new-tax-regime-here-are-the-allowances-and-deductions-you-can-still-avail/articleshow/108704539.cms
7. https://www.financialexpress.com/budget/income-tax-slab-rates-fy-2024-2025-live-updates-new-income-tax-regime-income-tax-budget-for-salaried-pe₹on-senior-citizen-3561494/
8. https://cleartax.in/s/professional-tax
9. https://cleartax.in/s/income-tax-savings
10. https://cleartax.in/s/life-insurance-taxability
11. https://economictimes.indiatimes.com/wealth/tax/now-life-insurance-maturity-money-will-not-be-fully-tax-exempt-cbdt-issues-new-tax-rules/articleshow/102797642.cms?from=mdr
12. https://www.business-standard.com/budget/news/budget-2024-fm-hikes-taxes-on-equity-trading-stcg-ltcg-stt-raised-124072301237_1.html
13. https://cleartax.in/s/standard-deduction-salary
14. https://www.businesstoday.in/personal-finance/tax/story/budget-2024-national-pension-system-benefits-extended-here-are-details-on-taxation-deductions-under-both-tax-regimes-439014-2024-07-27#:~:text=Union%20Budget%3A%20The%20Union%20Budget,of%20the%20employees'%20basic%20salary.
15. https://cleartax.in/s/section-80ccc
16. https://cleartax.in/s/hra-house-rent-allowance
17. https://cleartax.in/s/tuition-fees-deduction-under-section-80c
18. https://www.outlookbusiness.com/personal-finance/tax/tax-exemption-for-employees-in-receipt-of-childrens-educationhostel-allowance#:~:text=It%20provides%20for%20an%20exemption,300%2F%2D%20for%20each%20child.
19. https://cleartax.in/s/home-loan-tax-benefits