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Income tax calculator. Here’s how you can calculate your taxes for FY 2021-22
Budget 2021: These exemptions will not be available to a person if they opt for the new tax regime.
Finance minister Nirmala Sitharaman on Monday presented the Union Budget 2021 and announced that there will be no changes in the income tax slabs in the financial statement. However, Sitharaman said that senior citizens above the age of 75 years who only have pension and interest as a source of income will be exempted from filing the tax returns. The finance minister also announced non-resident Indians (NRIs) will be spared from double taxation.
Here is how you can calculate your income tax based on your income after the Union Budget was presented.
How to calculate income tax?
For the salaried class, income is the sum of a person’s basic salary, house rent allowance (HRA), special allowance, transport allowance and any other allowance. Some components of the salary such as telephone bill reimbursement and leave travel allowance are exempt from tax. If a person receives HRA and lives on rent, they can claim an exemption on HRA. A standard deduction of ₹40,000 was introduced in Budget 2018 and which was increased to ₹50,000 in Budget 2019.
These exemptions will not be available to a person if they opt for the new tax regime.
They will have to include income from all sources to calculate their income tax, including salary paid by the employer, any rental income or interest paid on a home loan, income from sale purchase of shares or house, income from freelancing or a business or profession and income from other sources such as interest from a savings account and fixed deposit and bonds.
Here are the exemptions or deductions which are not allowed under the new tax regime:
(i) Leave travel concession as contained in clause (5) of section 10;
(ii) House rent allowance as contained in clause (13A) of section 10;
(iii) Some of the allowance as contained in clause (14) of section 10;
(iv) Allowances to MPs/MLAs as contained in clause (17) of section 10;
(v) Allowance for the income of minor as contained in clause (32) of section 10;
(vi) Exemption for SEZ unit contained in section 10AA;
(vii) Standard deduction, deduction for entertainment allowance and employment/professional tax as contained in section 16;
(viii) Interest under section 24 in respect of self-occupied or vacant property referred to in sub-section (2) of section 23. (Loss under the head income from house property for the rented house shall not be allowed to be set off under any other head and would be allowed to be carried forward as per extant law);
(ix) Additional deprecation under clause (ii a) of sub-section (1) of section 32;
(x) Deductions under section 32AD, 33AB, 33ABA;
(xi) Various deduction for donation for or expenditure on scientific research contained in sub-clause (ii) or sub-clause (iia) or sub-clause (iii) of sub-section (1) or sub-section (2AA) of section 35;
(xii) Deduction under section 35AD or section 35CCC;
(xiii) Deduction from family pension under clause (iia) of section 57;
(xiv) Any deduction under chapter VIA (like section 80C, 80CCC, 80CCD, 80D, 80DD, 80DDB, 80E, 80EE, 80EEA, 80EEB, 80G, 80GG, 80GGA, 80GGC, 80IA, 80-IAB, 80-IAC, 80-IB, 80-IBA, etc). However, deduction under sub-section (2) of section 80CCD (employer contribution on account of the employee in notified pension scheme) and section 80JJAA (for new employment) can be claimed.
List of allowances allowed as notified under section 10(14) of the act under the proposed section:
a) Transport Aallowance granted to a Divyang employee to meet the expenditure for the purpose of commuting between place of residence and place of duty
b) Conveyance allowance granted to meet the expenditure on conveyance in the performance of duties of an office
c) Any allowance granted to meet the cost of travel on tour or on transfer;
d) Daily allowance to meet the ordinary daily charges incurred by an employee on account of absence from his normal place of duty.
