The total tax liability of an Individual is calculated as per Income tax 5 major heads of Salaries, House Property, Business Income, Capital Gains and Other Sources. Deductions under Section 80 C and D are only taken into account.Though effort has been made to incorporate as many points as possible, keeping in view the vastness of the subject, results may vary in certain cases.
Note
The total tax liability of person is found out by adding his income from all the sources, giving him exemptions as per tax laws and finding out his total tax liability on net total income. As per Income Tax Act, there are five major heads of Income:
The total tax liability of person is found out by adding his income from all the sources, giving him exemptions as per tax laws and finding out his total tax liability on net total income. As per Income Tax Act, there are five major heads of Income:
- SalaryIncome : Salary Income constitutes income earned as an employee from his employer. Salary consists of Basic pay plus various allowances and perks. Income Tax Act gives numerous exemptions from salary Income which help reduce the tax burden and are taken into account by this calculator.
- Income from House Property : Income from House Property constitutes rental income earned by giving property on rent. Flat deduction of 30% is given from Rental income earned for repairs etc irrespective of actual expenditure. Besides this Municipal taxes paid by the owner are also allowed as an expense. Income tax Act gives relief for the interest on housing loan paid from the rental income earned under Section 24(b). In case there is no rental income and the house is self occupied, interest on housing loan paid is still an allowable expense up to a maximum amount of Rs.150,000 and can be set off from other income in the same year.
- Income from Business and Profession : Various expenses directly relatable to the business are allowed as an expense and only net profit is chargeable to tax.
- Capital Gains : When you sell any asset you own (house, land, shares, mutual fund units, gold, debentures, bonds) and you make a profit on the sale, it is known as capital gain. The tax you pay on this profit is called the capital gains tax (long term or short term depending on the period of holding). For details refer Capital Gains Calculator.
- Income From Other Sources : Income from bank fixed deposits, savings bank interest, monthly income schemes, post office interest, KVP, NSC interest, PPF, PPF Interest, Dividend from shares and Mutual funds, Interest from Bonds etc all of them come under the head of Income from other sources.
Gross Total Income is computed by adding income from all these sources and from this amount deductions are given under Section 80. In this calculator main savings deductions under Section 80 C and 80 D are only taken into account. Income Tax is a very vast subject and considering that it is not possible to incorporate all the points. Though effort has been made to incorporate as many points as possible, keeping in view the vastness of the subject, results may vary in certain cases.
