For years, I’ve been running behind my friends to get my income tax calculation done. To be honest, I had never taken pains to cross-check whether my friend did it right or not. The main reason ,” I thought it is complicated!”
I didn’t even care to download an income tax calculator excel from the internet. I didn’t even know that this can be done in Excel.
How foolish it is to handover my financial calculation to someone else? Don’t ever do that.
Befor you start with the Income Tax calculations, it is most required to know your take home salary. This is the very first step that you need to take to do the maths.
The Income Tax Calculation Formula
Income Tax = 10% or 20% or 30% of your Total Taxable Income
Your Total Taxable Income = Total yearly income – Tax exemption on Salary Components – Tax exemption on Investments
The following calculator helps you to calculate your income tax in minutes.
Please note that this calculator best suits salaried individuals
Note: This income tax calculation sheet best suits for salaried individuals.
How to Use the Income Tax Calculator Excel?
Step 1: Keep your latest payslip handy!
Your payslip is the key thing for your Income Tax calculation. Grab your latest payslip, and keep it opened
Step 2: Keep all your investment details handy!
Rent receipts, Fixed deposits, Policy premiums, or whatever, save all of these in a folder or repository where you could easily access from anywhere. You would need to enter the data in the excel sheet that you are going to download in the next step
Step 3: Have all the medical bills for this year beside your computer!
Medical exemption is available upto INR 15000 for a year. If you fail to declare, this amount becomes taxable, and you might want to pay tax for INR 15000.
Step 4: Open the Excel Sheet, and start entering your details!
The Excel sheet is a IT calculator which calculates your income tax in minutes, all you need to do is just enter your salary details in the excel sheet.
TDS means Tax Deduction at Source — deducting income tax amount from your income source immediately.
Eg., My salary was 12 lakhs per year.
As per the income tax slabs, my salary is subject to income tax. Some companies will start to deduct income tax monthly based on my eligible tax slab. At a later point at the end of financial year, you should file the income tax based on your investments.
Income Tax is the actual amount you have to pay to the government. The TDS amount and the actual Income Tax amount may vary depending upon your investments.
Section 80C covers almost all the investments for individuals. You may use Section 80D to exempt the interest on your housing loan.
To be honest, it is our responsibility to pay income tax to our country. The country does a lot to us, come on.
This income tax calculation sheet is for all salaried individuals in India. Best suits IT professionals.
Sometimes the company would have deducted the maximum income tax amount you’re eligible for. But you would have investments in Section 80C and 80D, and you may have to pay less tax than what was deducted monthly. This is where income tax filing is very important.
ITR (Income Tax returns) should be filed for current financial year.
- ITR for 3 continuos years is the mandatory requirement for applying home loan. It quickens your loan process.
- ITR is required incase you want to file a divorce
- Any government procedure requires ITR.