Income Tax: Why should you use a tax calculator before filing your return?

Income Tax: With fewer than 30 days remaining before the deadline to file the income tax return (ITR) ends on September 15, taxpayers are scurrying around to make arrangements for the necessary documents to be able to file their tax return in time.

Meanwhile, it is vital to note that the tax department has released the excel utility of ITR-7 as well. With this, all excel utilities of all tax return forms have been released.

Once you have arranged all the necessary documents, it is recommended to use an income tax calculator before filing your income tax return. Those who are not aware of this handy tool available, we share some key tips for them here.

What is an income tax calculator?

These are the set of customised tools which give you the tax liability that you owe based on the inputs that you enter.

Is there only one tax calculator on the IT-filing portal?

There are several such calculators for different purposes. These include the house rent allowance (HRA) calculator, children’s education and hostel allowance calculator, transport allowance calculator, medical facility calculator, and income and tax calculator. Besides, there is a tax calculator that gives you the output of tax liability based on your income.

Is there a calculator that tells us tax liability under both tax regimes: old vs new?

Yes, there is a tax calculator that serves exactly this purpose: ascertaining the tax component based under two different regimes. It calculates tax assuming you were following the old tax regime versus the new tax regime. After comparing the income tax component under these regimes, you can make a decision which regime to opt for.

Where can you find a link to the tax calculator?

You can get a link to tax calculators under the section ‘tax tools’ on Income Tax India’s website. You can also click here for the link.

Once you open this link, make sure to choose the right calculator, i.e., whether you want to compare the tax regimes or just ascertain the total tax liability, and so on.

Alternatively, you can click on the home page of the e-filing portal to get access to the income tax calculator, as shown in the image above.

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