Income Tax Calculator Financial Year 2019-20 Assessment Year 2020-21

     Income Tax Calculation FY 2019-20  AY 2020-21 The Free Software for Employees and Other Tax Payers-

The Union Budget Proposal for the Financial Year 2019-20, which was already announced by the Hon’ble Finance Minister in Lok Sabha, has put forward certain modifications in the existing Personal Income Tax Rate of the Indian Citizen. The main highlights of the proposal include:
RATES OF INCOME-TAX :

Income-tax is required to be deducted under Section 192 of the Act from income chargeable under the head "Salaries" for the financial year 2019-20 (i.e. Assessment Year 2020-21) at the following rates:

 

I. Normal Rates of tax:

1 Where the total income does not exceed Rs. 2,50,000/--- Nil

2 Where the total income exceeds Rs. 2,50,000/- but does not exceed Rs. 5,00,000/-. 5 per cent of the amount by which the total income exceeds Rs. 2,50,000/-

3 Where the total income exceeds Rs. 5,00,000/- but does not exceed Rs. 10,00,000/-. Rs. 12,500/- plus 20 per cent of the amount by which the total income exceeds Rs. 5,00,000/-.

 4 Where the total income exceeds Rs. 10,00,000/-. Rs. 1,12,500/- plus 30 per cent of the amount by which the total income exceeds Rs. 10,00,000/-

II. Tax at Special rate:

A.      Tax for every individual, resident in India, who is of the age of sixty years or more but less than eighty years at any time during the financial year:

1 Where the total income does not exceed Rs. 3,00,000/- --Nil

2 Where the total income exceeds Rs. 3,00,000 but does not exceed Rs. 5,00,000/- 5 per cent of the amount by which the total income exceeds Rs. 3,00,000/-

3 Where the total income exceeds Rs. 5,00,000/- but does not exceed Rs. 10,00,000/- Rs. 10,000/- plus 20 per cent of the amount by which the total income exceeds Rs. 5,00,000/-.

 4 Where the total income exceeds Rs. 10,00,000/- Rs. 1,10,000/- plus 30 per cent of the amount by which the total income exceeds Rs. 10,00,000/-
B. Tax for every individual, resident in India who is of the age of eighty years or more at any time during the financial year:

1 Where the total income does not exceed Rs. 5,00,000/- -- Nil

2 Where the total income exceeds Rs. 5,00,000 but does not exceed Rs. 10,00,000/- 20 per cent of the amount by which the total income exceeds Rs. 5,00,000/-

3 Where the total income exceeds Rs. 10,00,000/- Rs. 1,00,000/- plus 30 per cent of the amount by which the total income exceeds Rs. 10,00,000/-

Surcharge on Income tax:

The amount of income-tax computed in accordance with the preceding provisions of this Paragraph, or the provisions of section 111A or section 112 of the Income-tax Act, shall, in the case of every individual or Hindu undivided family or association of persons or body of individuals, whether incorporated or not, or every artificial juridical person referred to in sub-clause (vii) of clause (31) of section 2 of the Income-tax Act, having a total income exceeding one crore rupees, be increased by a surcharge for the purpose of the Union calculated at the rate of fifteen per cent of such income-tax:

                Provided that in the case of persons mentioned above having total income exceeding one crore rupees, the total amount payable as income-tax and surcharge on such income shall not exceed the total amount payable as income-tax on a total income of one crore rupees by more than the amount of income that exceeds one crore rupees.

Health and Education Cess on Income-tax:

An additional Health and Education Cess is chargeable at the rate of 4 percent of income-tax including the surcharge if any.

                Rebate under Section 87(A)

                There shall be a rebate of Rs. 12500/-, if the Taxable Income does not exceed Rs. 500000/-

In Short:

Category	Ordinary Citizens Below  the Age of 60	Senior Citizens Between the Age of 60-80	Super Senior Citizens Above the  Age of 80
1	Upto Rs. 2,50,000 - Nil	Upto Rs. 3,00,000 - Nil	Upto Rs. 5,00,000-Nil
2	2,50,000 To 5,00,000 - 5%	3,00,000 To 5,00,000 - 5%
3	5,00,000 To 10,00,000 - 20%	5,00,000 To 10,00,000 - 20%	5 ,00,000 To 10,00,000 -20%
4	Above 10,00,000 - 30%	Above 10,00,000 - 30%	Above 10,00,000    30%

+ Cess and Surcharge- Rebate on applicable cases.

Now we can examine the relevant provisions of the Income Tax Act, by which we can claim various deductions on our annual personal income. Generally it can be split into the following sections. Beware, this note is NOT exhaustive. There are several other sections on Income Tax Act & Rules describing the allowable deductions on our annual personal income, which are not depicted now in this note. You may go through the Income Tax Act & Rules for understanding those sections.

Tax Saving Sections

INVESTMENT& PROVISIONS FOR FUTURE

Section 24: This section deals with the Interest payable on Housing Loan & Home modification Loan. You can make a deduction Up to Rs 200000/-for HomeLoan and Rs. 30,000 for Home Improvement Loan (conditions apply).
Section 80C : Almost all the taxpayers arewell versant with section 80 C deductions.As all we know, it includes, GIS Subscriptions, State Life Insurance Policy Premiums, Life Insurance Premium ,Tuition Fees, Housing Loan Principal Repayment, Provident Fund (EPF/GPF/VPF/PPF), Sukanya Samruddhi Account, National Saving Certificate (NSC), Senior Citizen’s Saving Scheme, Tax Saving Fixed Deposits, Pension Plans from Mutual Funds and  Insurance Companies, New Pension Scheme (NPS), Tax Saving Mutual Fund, Central Govt. Employees Pension Schemes under National Pension System-NPS), Stamp duty and registration cost of the House, Tuition Fee for 2 Children etc.

                Now, we may look into the schemes in detail:

What is the Sukanya Samruddhi Account?

Sukanya Samriddhi Account is a scheme by the Central Government to promote over all development of the Girl Child. It can only be opened for Girl child below the age of 10. A parent can opt this scheme for his/her maximum 2 girl child only. Deposit to the account to be made for 14 years and account matures at 21 years from date of opening. Maximum Investment allowed is Rs 15000/- per year per account. Minimum Investment of Rs 1,000 is required every year to keep the account active. Interest Rates paid are market linked and is reset every quarter.

What is  Public Provident Fund?

It is an investment that we can open at Post Offices, 24 Nationalized Banks and at one Private Banks. This include Andhra bank, Allahabad Bank, Canara Bank, Corporation Bank,Indian Bank, State Bank of Travancore, Bank of India, Central Bank of India, Dena Bank, IDBI Bank, Syndicate Bank, Bank of Baroda, Indian Overseas Bank, Punjab National Bank, Union Bank of India, State Bank of Hyderabad, State Bank of India, ICICI Bank Ltd., State Bank of Mysore, State Bank of Patiala, Vijaya Bank,Bank of Maharashtra, State Bank of Bikaner and Jaipur, United Bank of India andUCO Bank. Public Provident Fund has a mandatory locking of 15 Years and can further be extended for 5 years at a time. Maximum Investment allowed is Rs. 150000/- per Year and the minimum Investment of Rs 500 is required every year to keep the account active. Interest Rates paid on Public Provident Fund are market linked.

Why the NSC (National Saving Certificate)?

National Saving Certificate is available for 5 years (NSC VIII). The interest is market linked and changes every quarter. There is no maximum limit for investment in NSC but the deduction is only till maximum of Rs 150000/- u/s 80C. You can buy NSC in denominations of Rs 100, 500, 1000, 5000 and 10000.

What about other Savings Schemes?

Tax Saving Fixed Deposits from Banks and Post Offices

These are like normal Fixed Deposit with banks but is termed Tax Saving Fixed Deposits. It has minimum tenure of 5 Years.

Senior Citizens Savings Scheme

Senior Citizens Savings Scheme is for senior citizens who are 60 years or above on the date of opening of the account. Also people with 55 years of age who have retired by VRS can open Senior Citizens Savings Scheme after 3 months of retirement Minimum Investment required is Rs 1,000 while the maximum Investment allowed is Rs 1500000/-. The joint account can be opened only with your spouse and there is no age limit applicable for the joint account holder.

The interest is paid out quarterly. No partial withdrawal is permitted before 5 years.

Equity Linked Saving Scheme

Equity Linked Saving Scheme is popularly known as Tax Saving Mutual Fund. The minimum investment in the scheme is Rs 500/- There is no limit for maximum investment but the maximum deduction you get is Rs. 150000/- only.

Tuition Fee

The maximum deduction available is Rs 150000/- and it is available for full time courses only. It does not include, Development Fee, Transport charges, hostel fees, Mess charges, library fees, Late fee, Stationary Charges, Magazine Fees, etc- That is it is available ONLY FOR TUITION FEE! Also, the deduction is not available for tuition fee to coaching classes or for private tuitions. The educational institute should be located in India, though it may be affiliated to any foreign university. The expenses on tuition fees for maximum of two children is only. This deduction is not available for tuition fees for self or spouse.

Stamp Duty & Registration Fees

This benefit is available on purchase on new residential unit only. Stamp duty and registration charges up to Rs 150000/- can be claimed.The payment should have been made in the same financial year and the deduction cannot be carried forward to next year. The house should be in the name of assessee claiming deduction and the payment for stamp duty should have been made from his own funds.

Home Loan- Principal

Deduction u/s 80C up to Rs 150000/- is allowed on the principal repayment of the housing loan if the house is self occupied or kept vacant.The house should be registered in the name of assessee. (He should be one of the owners, in case of joint ownership).The loan should be taken from Banks from  employers concerned. Loans taken from friends/ relatives is not eligible.

The maximum allowed deduction u/s is Rs.150000/- only.

Section 80CCC : This include various Pension Schemes  from Insurance Companies.Please note that the  assured return of these type  of investment is very nominal @  1-2% per annum.

Section 80CCD: This include Central Government Pension Schemes including NPS.

National Pension Scheme (NPS)

It has two types of Accounts  Tier 1 and Tier 2. Tier 2 account is optional and only contribution to Tier 1 account is eligible for Tax Deduction u/s 80CCD.Tier- 1 account requires a minimum investment of Rs 6,000 annually and Rs 500 per transaction. Salaried employees can claim deduction up to 10% of his/her salary, which comprises basic + DA, while the  self employed can claim upto 10% of gross total annual income.

Note:- Maximum of Rs.150000/- deduction is allowed combining these 3 Sections, 80C, 80CCC, 80CCD.

Section 80CCD(1B):  Additional exemption of Rs 50,000 for investment  in NPS is allowed u/s 80CCD(1B)

HEALTH AND MEDICAL TREATMENT

Section 80D:  For Medical Insurance for family and parents deduction Up to Rs 60,000/- can be made. You can claim maximum deduction of Rs 25,000 in case you are below 60 years of age and Rs 30,000 above 60 years of age. An additional deduction of Rs 25,000 can be claimed for buying health insurance for your parents (Rs 30,000 in case of either parents being senior citizens)This deduction can be claimed irrespective of parents being dependent on you or not This is for Self, Spouse, Children and Parents and not available for buying health insurance for in-laws!

Section 80DD: For maintenance & medical treatment of disabled dependent Deduction Upto Rs. 125000/- can be made. You can claim up to Rs 75,000 or actual expenditure incurred, whichever is lesser. (The limit is Rs 1.25 Lakh for severe conditions). Dependent can be parents, spouse, children or siblings. (The dependent should not have claimed any deduction for self).The Persons with Disability Act-1995 defines that the persons with 40% disablity or more is a Differently abled person.A severe disability condition is 80% or more of the disabilities. Individuals should produce a  disability certificate issued by a Medical Board constituted by the State or Central Government to claim this deduction.

Section 80DDB: This Section states that for treatment of certain disease / ailment deduction up to Rs 80,000/- can be made. Cost incurred for treatment of certain disease for self and dependents can claim deduction. Dependent can be parents, spouse, children or siblings. But they should be wholly dependent on you.Diseases include:  AIDS , Chronic Renal failure, Hemophilia, Malignant Cancers , Neurological Diseases ,Parkinson’s Disease,Thalassaemia, etc.

A certificate from Specialist Doctor from Government Hospital should be produced. If the expenses have been reimbursed this deduction cannot be claimed (But if partial reimbursement is made, the balance amount can only be claimed)

                               

LOANS

Section 80E: The main attraction of this Section is that For the interest paid on Education Loan, whole amount can be deducted. The entire interest paid on education loan in a financial year is eligible for deduction. There is no deduction on principal paid for the Education Loan. The loan should be taken for pursuing full time courses only.The loan has to be taken from approved financial institution only. The loan should be for education of self, spouse or children only not for in -laws.

Section 80EE: Additional deduction up to Rs 50,000 for Interest Payable on Home Loan (For First time home buyers only).

DONATIONS

Section 80G: Donation to certain charitable funds, charitable institutions, etc. Deduction up to Rs 40,000/-*

Section 80GGA:                Donations for scientific research or rural development Deduction up to  Rs 100000/-*

Section 80GGC:                Donation to political parties-Deduction Up to Rs 60,000/-*

*Conditions apply.

Section 80GG: For paying the rent in case of no HRA, deduction up to Rs 24,000/- can be made.

Section 80CCG: This Section includes Rajiv Gandhi Equity Savings Scheme (RGESS). Deduction up to Rs 25,000/- is eligible. (50% of the amount invested). Rajiv Gandhi Equity Savings Scheme is a Tax Saving Scheme to encourage first time investors in stock market. Tax deduction on 50% of the amount invested The maximum amount eligible for investment in a year for RGESS is Rs. 50,000. You can invest for three consecutive years. The returns are dependent on stock market and it is Tax Free.

Section 80U:  Physically Disabled Assesse can claim deduction in case he suffers from certain disabilities or diseases. The deduction is Rs 75,000 in case of normal disability (40% or more disability).The deduction is Rs 125000/-for severe disability (80% or more disability).

Section 80TTA:  Interest received in Saving Bank Account-Deduction Up to Rs 10,000/-

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Since the income and expenditure are different from person to person, It is a herculean task to devise a single formula for developing a software for catering all the needs of every tax payers. Still it can be made for meeting the common needs, taking into the consideration of the identical parameters. Against this backdrop is, this software, The Anticipatory Income Tax Calculator 2019-20, is devised. Before using this software you are hereby advised to go through the forgoing lines, so that you should have an idea on various Sections of the Income Tax Act, pertaining to the Income Tax assessment.Then you can
 
Click here to Download The Income Tax Calculator!!

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Desclaimer: You are advised to calculate your income tax asper the provisions of the Income Tax Act and all other rules relevant, manually, apart from relying to this software. The software available in this blog is intended only for providing a help to the individual in calculating his/ her income tax. The same cannot be treated as foolproof or final word in this regard. It may also be kept in mind that this software cannot be used if your proposed income is coming under the purview of “Surcharge”. Therefore, the developer of this software never take the responsibility for any mistakes in calculations, errors omissions etc. whatsoever, inadvertently crept in this software. Hence you are hereby advised to verify the correctness of the figures calculated using this software, manually. By downloading and using this software you are agreeing to use this software at your own risk, completely absolving the developer of this software. In short, you are using this software at your own risk and responsibility alone.