Simple Guide to Calculate Income Tax for Salaried Individuals
Income tax slab rate applicable for the fiscal year 2020-21 are as mentioned under:
- Up to 2.5 lakhs - No tax
- Rs.2.5 lakhs to 5 lakhs - 5 per cent
- Rs.5 lakhs to 10 lakhs - 20 per cent
- Above Rs.10 lakhs - 30 per cent
You can invest under the Section 80C to a maximum of Rs.1,50,000. Or if you are in a higher tax bracket, you can save Rs.45,000 in tax. Alternately, investment in Provident Fund, Life Insurance Premium, Equity Linked Savings Scheme, Home Loan monthly installment, National Savings Certificate, Infrastructure Bond, Pension Funds, Tuition fees and Unit Linked Insurance Plan can be made. You must note that gross salary is the sum total of Basic pay + Dearness allowance + House Rent Allowance + transport allowance + special allowance + other allowance. The total taxable income is calculated after applicable deductions such as HRA, LTA etc are adjusted from the total income which comprises of gross salary and income from other sources. Then the income tax is calculated according to the slab under which the taxable income falls under +3% cess.
Once you have computed the tax payable, you need to note your tax liability. For this follow the mentioned steps:
- Your total income needs to be rounded off to the closest multiple of 10.
- Classify the total amount into four parts: long-term capital gains, short-term capital gains and the total amount that remains (that is ultimately rounded off).
- Add up the computed tax.
- Whatever the balance is, levy the surcharges.
- Add education, secondary and higher education cess to the total calculated tax (including surcharges).
- Check the rebates that are allowed after surcharges are added.
- The remaining balance will be your total payable tax which is then rounded off to the closest multiple of 10.
HDFC Life offers Save Tax Calculator, an online tool for calculating the amount of tax payable by you by taking into consideration various parameters like income, investments, gender, age etc. For checking, click on the mentioned link and follow the steps listed: Income Tax Calculator
Related Articles
- Income Tax Return - What do you need to know?
- Income Tax Slabs in India - FY 2019-20/AY 2020-21
- Benefits of E-Filing Your Tax Returns
- Latest Income Tax Slab Rates for FY 2018-19
- New Income Tax Slabs & Rates in India for FY 2020-21/AY 2021-22
- 5 Reasons Why You Should File Income Tax Returns
- How to save income tax this year with HDFC Life plans
Term Plan Articles
Investment Articles
Savings Articles
Life Insurance Articles
Tax Articles
Retirement Articles
ULIP Articles
Subscribe to get the latest articles directly in your inbox
Health Plans Articles
Child Plans Articles
Popular Calculators
Here's all you should know about life insurance.
We help you to make informed insurance decisions for a lifetime.
HDFC Life
Reviewed by Life Insurance Experts
HDFC LIFE IS A TRUSTED LIFE INSURANCE PARTNER
We at HDFC Life are committed to offer innovative products and services that enable individuals live a ‘Life of Pride’. For over two decades we have been providing life insurance plans - protection, pension, savings, investment, annuity and health.
Popular Searches
- Term Insurance Calculator
- Investment Plans
- Investment Calculator
- Investment for Beginners
- Best Short Term Investments
- Best Long Term Investments
- 5 year Investment Plan
- savings plan
- ulip plan
- retirement plans
- health plans
- child insurance plans
- group insurance plans
- income tax calculator
- bmi calculator
- compound interest calculator
- income tax slab
- Income Tax Return
- what is term insurance
- Ulip vs SIP
- tax planning for salaried employees
- HRA Calculator
- Annuity From NPS
- Retirement Calculator
- Pension Calculator
- nps vs ppf
- short term investment plans
- safest investment options
- one time investment plans
- types of investments
- best investment options
- best investment options in India
- Term Insurance for Housewife
- Money Back Policy
- 1 Crore Term Insurance
- life Insurance policy
- NPS Calculator
- Savings Calculator
- life Insurance
- Gratuity Calculator
- Zero Cost Term Insurance
- critical illness insurance
- itc claim
- deductions under 80C
- section 80d
- Whole Life Insurance
- benefits of term insurance
- types of life insurance
- types of term insurance
- Benefits of Life Insurance
- Endowment Policy
- Term Insurance for NRI
- Term Insurance for Women
- Term Insurance for Self Employed
- Benefits of Health Insurance
- Health Insurance for Senior Citizens
- Health Insurance for NRI
- Best Term Insurance Plan for 1 Crore
- personal accident insurance
- Annuity Calculator