How to Use Income Tax Calculator AY 2024-25?

An online income tax calculator is a smart tool that aims to help taxpayers calculate their tax liability for a given year. This smart tool is easily available online and can be accessed for free. Typically, tax calculators online need details such as the user’s income, age, and deduction details, to determine their tax liability within a few seconds. This insight allows users to find their liabilities, ascertain their deductions, and file taxes and returns accordingly. However, to use the tax calculator AY 2024-25A users need to be clear about a few details such as their total income, investments, and deductibles. Subsequently, they can use the tool and its features for efficient tax planning.

A Brief of Income Tax Calculator AY 2024-25 

Income tax calculator AY 2024-25 is available online for taxpayers’ convenience so that they can determine their annual tax liability for the assessment year 2024-25 within a few steps. This financial tool uses age, income, tax credits, tax slabs, deductions, and exemptions to determine how much a taxpayer would pay. 

This financial tool can be used for free and allows multiple adjustments. This feature helps users to access it and redo their calculations in case of any input error. The simple design and user-friendly interface also allow users to easily compute tax liabilities without getting distracted by the complex nature of tax calculation. These features make the tool a reliable means to plan taxes.

Easy Steps to Use Income Tax Calculator AY 2024-25

Taxpayers can use an income tax calculator in these simple steps – 

Step 1:  Enter the assessment year for which you wish to compute taxes

Step 2: Enter your age or select the suitable age group

Step 3: Tap on the  ‘Go to Next Step’ button

Step 4: Enter salary after deducting exemptions available under HRA, LTA, etc. (It is applicable for users who want to find their annual tax burden under old income tax slabs) Alternatively, users may provide details of salary without deducting the applicable exemptions (to know the income tax liability under the new tax slab)

Step 5: Feed details like interest income, interest paid on loans for rented-out property, rent, and interest paid on loans for self-occupied houses.

On the other hand, net income from digital assets is taxed at the rate of 30% along with surcharge and cess.

Step 6: Click on the ‘Go to Next Step’ button. 

Step 7:  To compute taxes under the older tax slab, provide details of all tax-saving investments you invested in a year that come under the purview of Sections 80C, 80E, 80TTA, 80D, and 80G

Step 8: Tap on the ‘Calculate’ button to find out tax liability. The tax tool will display a brief comparison of old and new liability.

Since the entire calculation process depends on users’ knowledge about their income and applicable exemptions, individuals must note them before using the tool. This way they can make informed use of the tool and facilitate accurate planning.

Key Exemptions to Note Under Old and New Income Tax Regime

Taxpayers with investments in tax savings instruments, life insurance, or savings savings are deemed eligible to claim deductions. To understand one’s tax liability taxpayers need to deduct the applicable investment sum from the gross income to obtain the taxable amount. However, this involves several steps and calculations. Individuals can consciously eliminate several steps and make the process quick by using a tax calculator. Also, the exemptions and deductions under the old tax regime differ from those under the new tax regime.

For instance,

Old income tax regime

The following cases are applicable for deductions –

  • A tax deduction is capped at Rs. 50000 for the salaried taxpayers.
  • Education loans are allowed as a deduction under Section 80E.
  • Charitable donations can be claimed as deductions under Section 80G.
  • Interest earned on savings accounts can be claimed as a deduction but only up to Rs. 10,000.
  • LTA exemptions are made available for travel purposes.
  • HUFs and individual taxpayers can claim a tax deduction of a maximum of Rs. 1.5 lakhs in a year under Section 80C of the Indian Income Tax Act.
  • Medical expenses are eligible for deductions as per the clauses of Section 80D.
  • Interest on a loan for self-occupied housing property is eligible for a deduction of up to Rs. 2 lakh.

New income tax regime

The following cases can be claimed as deductions –

  • Housing loan interest payout on rented-out property is eligible under Section 24(b)
  • The contribution made towards the National Pension Scheme can be claimed as deductions under Section 80CCD (1B) 
  • Interest earned and maturity proceeds received from Sukanya Samriddhi Yojana and PPF schemes are exempted. However, it should be noted that the new income tax regime does not allow contributions made towards these schemes to be claimed as deductions.
  • Transport allowances for disabled taxpayers can be claimed as a deduction.
  • Conveyance allowances that had to be used to  meet daily work-related expenses can also be claimed
  • Remunerations used to cover the cost of transfer or tour are eligible 
  • Indemnity paid to settle daily expenses in the absence of normal or regular duty site.
  • Salaried employees can claim Rs. 50000 as a deduction under the new regime. However, his tax provision was earlier not available under the old tax regime. 
  • Corpus fund  can be claimed as deductions under  Section 80CCH is eligible 

Section 57(iia) was recently formed under the new tax regime to allow earnings generated from family pensions to be claimed as deductions. Individuals can now claim one-third of the amount or nearly Rs.15000, whichever is less, as a deduction.

These details are crucial and must be filled in accurately to ascertain the income tax burden and applicable tax returns with the help of the income tax calculator AY 2024-25. Subsequently, they may file their taxes and claim returns without any discrepancies or gaps. Since the tool is readily available individuals can use it to streamline their tax planning.