1. What is Income Tax Calculation?

The Income Tax calculation determines how much tax an individual owes to the government based on their taxable income, applicable tax slab rates, cess, and available rebates under the Indian tax system.

2. How Does the Calculator Work?

The calculator uses the income tax formula:

Where:

• \( \text{Taxable Income} \) — Total income after deductions (INR/year)
• \( \text{Slab Rate} \) — Applicable tax rate as decimal (e.g., 5% = 0.05)
• \( \text{Cess} \) — Health and education cess (typically 4% of tax)
• \( \text{Rebate} \) — Tax rebates like Section 87A (e.g., ₹60,000)

Explanation: The calculation first determines base tax, adds cess, then subtracts any applicable rebates.

3. Importance of Tax Calculation

Details: Accurate tax calculation helps in financial planning, ensures compliance with tax laws, and helps avoid penalties for underpayment.

4. Using the Calculator

Tips: Enter taxable income in INR, slab rate as percentage (e.g., 5 for 5%), cess percentage (default 4%), and rebate amount (default ₹60,000).

5. Frequently Asked Questions (FAQ)

Q1: What's the difference between old and new tax regimes?
A: The new regime offers lower rates but fewer deductions, while the old regime has higher rates but more deductions.

Q2: How is cess calculated?
A: Cess is calculated as a percentage (typically 4%) of the base tax amount.

Q3: Who is eligible for rebate under Section 87A?
A: Individuals with taxable income up to ₹5 lakh can claim rebate up to ₹12,500 (old regime) or ₹25,000 (new regime).

Q4: Are there different tax slabs for different age groups?
A: Yes, senior citizens (60-80 years) and super seniors (80+ years) have higher exemption limits.

Q5: When is advance tax payable?
A: Advance tax is payable in installments if tax liability exceeds ₹10,000 in a financial year.