It may seem daunting for individuals to calculate their tax liability in the new financial year manually. The confusion mainly arises because a separate tax rate is applicable for the different income slabs. However, with the online income tax calculator, they can easily understand their tax obligations for this financial year, 2022-23. So, Individuals must know how to calculate the income tax for FY 2022-23 using this virtual tool.
Procedures to calculate the income tax for FY 2022-23
Following are the easy stepwise guideline to use this online calculator for measuring the tax liabilities in the present financial year:
- Access the online income tax calculator available online
- Enter details of your income. Mention all the sources of your earnings, which may be salary, rent, capital gains, interest on deposits, etc.
- Mention your applicable exemptions, which may be against your rented/self-occupied property, or salary.
- Provide details of your tax deductions
- Enter your age
- Click on ‘calculate’
Upon completing these steps, individuals can calculate income tax for FY 2022-23. In addition to the tax liability of the present regime, these calculators can also help them know the tax obligations of the past regime.
Besides knowing how to use this income tax calculator, individuals also need to know about tax exemptions and deductions.
Tax exemptions are applied to earnings excluded from tax liabilities. Individuals do not need to pay any tax on those incomes. Following are some examples of tax exemptions:
- Leave Travel Allowance (LTA)
- House Rent Allowance (HRA)
- Company accommodations
- Pensions, gratuity, and VRS
Guide to a tax deduction
Tax deductions are the amounts that individuals can reduce from their annual gross income in a financial year. Under sections 80C, 80D, 80E and 80G of the Income Tax of India, citizens get this benefit up to a certain limit against investments, purchasing health insurance policies, donations to trusts, taking home loans etc.
While calculating the taxable income, individuals need to deduct their deductions and exemptions from their gross income in a particular financial year. In fact, individuals need to fill in information about their applicable deductions and exemptions on the online income tax calculator. This way, they can calculate income tax online and be aware of their obligations. Knowing beforehand, they can file their income tax returns (ITR) form properly.
After knowing how to measure the income tax obligations, individuals also need to know how they can file their ITR forms.
Steps to file ITR online
In order to file ITR online, individuals must register themselves and create a user account in the portal of the Income Tax Department of India. After this, they have to follow the steps mentioned below:
- Log in to the portal
- Select the concerned financial year
- Fill in the form properly with all the required information, including details of your income, TDS, etc.
- Click on ‘Preview and Submit’
- Submit the form and validate your request by filling in your Electronic Verification Code (EVC) or Aadhaar number
After these, individuals will complete their ITR filing process.
In this regard, individuals need to know that the ITR form is one of the important documents for proving the annual income of a person in a financial year. They must keep this record in a secured storage system for future reference. In fact, it is one of the essential documents that individuals need to submit for taking a long-term home loan without hassle. It will help them meet the eligibility criteria for a home loan.
Individuals also need to be aware of various aspects of a home loan before applying for it. This will help them secure the lump sum easily, without the risk of getting rejected from the lenders’ end.
While applying for a home loan, individuals need to know that several reputed lending institutions in India provide pre-approved offers to their customers. It is a personalised credit offer extended on their financial products, including home loans and loans against property. By obtaining these offers, customers can substantially expedite the loan application process. They only need to mention their names and contact details to check their pre-approved offers.
In conclusion, individuals can now easily calculate the income tax for FY 2022-23 with the help of virtual calculators made for this purpose. This way, they can be informed about their liabilities to the Indian Government.