Anticipatory Income Tax Calculator Financial Year 2021-22

(Assessment Year 2022-23)

Anticipatory Income Tax Calculation FY 2021-22  AY 2022-23. The Free Software for Employees and Other Tax Payers- Please Click 

Old Tax Calculation System:

In last few years there were different tax slabs for three categories namely Ordinary Person, Senior Citizen and Super Senior Citizen. The taxable income is calculated after certain deductions from the gross income.

Tax was calculated vide: 

I. Normal Rates of tax:

(a) Where the total income does not exceed Rs. 2,50,000/--- Nil. (b) 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/-. (c) 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/(d)            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:

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:

(a)Where the total income does not exceed Rs. 3,00,000/- --Nil (b) 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/- (c)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/(d) 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/-

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

(a) Where the total income does not exceed Rs. 5,00,000/---Nil (b) 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/- (c) 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/- 

III. 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.

Surcharge is levied on the amount of income-tax at following rates if total income of an assessee exceeds specified limits:-

Range of Income	Rs. 50 Lakhs to Rs. 1 Crore	Rs. 1 Crore to Rs. 2 Crores	Rs. 2 Crores to Rs. 5 Crores	Rs. 5 crores to Rs. 10 Crores	Exceeding Rs. 10 Crores
Surcharge Rate	10%	15%	25%	37%	37%

Note 1: The enhanced surcharge of 25% & 37%, as the case may be, is not levied, from income chargeable to tax under sections 111A, 112A and 115AD. Hence, the maximum rate of surcharge on tax payable on such incomes shall be 15%. 

Note 2: Marginal relief is available from surcharge in following manner-

Net Income Range		Marginal Relief
Exceeds	Do not Exceed
50 Lakh	1 Crore	Amount payable as income tax and surcharge shall not exceed the total amount payable as income tax on total income of Rs 50 Lakh by more than the amount of income that exceeds Rs 50 Lakhs
1 Crore	2 Crore	Amount payable as income tax and surcharge shall not exceed the total amount payable as income-tax on total income of Rs. 1 crore by more than the amount of income that exceeds Rs. 1 crore
2 Crore	5 Crore	Amount payable as income tax and surcharge shall not exceed the total amount payable as income-tax on total income of Rs. 2 crore by more than the amount of income that exceeds Rs. 2 crore
5 Crore	–	Amount payable as income tax and surcharge shall not exceed the total amount payable as income-tax on total income of Rs. 5 crore by more than the amount of income that exceeds Rs. 5 crore

IV. 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%

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 2,00,000/-for Home Loan if the loan is availed on or after 01/04/1999  and the construction is completed within  3 years and Rs. 30,000 for Housing Loan & Home modification Loan is the same is availed before 01/04/1999.

Section 80 C : 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. The maximum allowed deduction u/s is Rs.150000/- only. 

Section 80 CCC : 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 80 CCD: 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, 80 C, 80 CCC, 80 CCD.

Section 80 CCD (1B):  Additional exemption of Rs 50,000 for investment  in NPS is allowed u/s 80CCD (1B). There is no 10% limitation of gross annual income here.

Section 80 CCG: 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. You can claim deduction under this Section only if the Gross Annual Income is Less than rupees 12 Lakhs. 

HEALTH AND MEDICAL TREATMENT

Section 80 D:  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 80 DD: 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 80 DDB: 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 80 E: 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 80 EE: This came into effect from the financial year 2013-14. It was available for only 2 years, FY 2013-14 and FY 2014-15 by which you can claim a deduction of up to Rs. 50,000, per financial year, over and above the Rs 2 lakh limit under Section 24 of the income tax act. You can continue to claim this deduction until you have fully repaid the loan. The deduction under this section is available only to individuals. This means, if you are a HUF, AOP, a company or any other kind of taxpayer, you cannot claim any benefit under this section.

Other Conditions:

(1) Value of the house should be Rs 50 lakhs or less. (2) Loan taken for the house must be Rs 35 lakhs or less. (3) The loan must be sanctioned by a Financial Institution or a Housing Finance Company. (4) The loan must be sanctioned between 01.04.2016 to 31.03.2017. (5) As on the date of the sanction of loan, no other house property must be owned by you.

Section 80 EEA: The deduction under this section is available only to individuals. This deduction is not available to any other taxpayer. Thus, if you are a HUF, AOP, Partnership firms, a company, or any other kind of taxpayer, you cannot claim any benefit under this section. A deduction for interest payments up to Rs 1,50,000 is available under Section 80EEA. This deduction, under Section 80EEA, is over and above the deduction of Rs 2 lakh for interest payments available under Section 24 of the Income Tax Act. Therefore, taxpayers can claim a total deduction of Rs 3.5L for interest on home loan, if they meet the following conditions of section 80EEA.

(1) You should not own any other house property on the date of the sanction of a loan. (2) Housing loan must be taken from a financial institution or a housing finance company. (3) Stamp duty value of the house property should be Rs 45 lakhs or less. (4) The individual taxpayer should not be eligible to claim deduction under the existing Section 80EE. (5)The loan must be sanctioned between 01.04.2019 to 31.03.2020. (6) The taxpayer should be a first-time home buyer.

Section 80EEB: If An individual taxpayer may have an electric vehicle for personal use or for business use he can claim a deduction for interest payments up to Rs 1,50,000 if the vehicle is for personal use and any interest payments above Rs 1,50,000 can be claimed as a business expense, if the vehicle is for business use. To claim as a business expense, it is necessary that the vehicle should be registered in the name of the owner or the business enterprise. The deduction under this section is available only to individuals. This deduction is not available to any other taxpayer. Thus, if you are a HUF, AOP, Partnership firms, a company, or any other kind of taxpayer, you cannot claim any benefit under this section. 

Other Conditions:

(1) The loan must be taken from a financial institution or a non-banking financial company for buying an electric vehicle. (2) The loan must be sanctioned anytime during the period starting from 1 April 2019 till 31 March 2023.

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 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/- can be made by the Tax Payers. If you are a Senior Citizen you can claim a maximum deduction of Rs. 50,000/- both from the Savings Bank Account and Fixed Deposit Account.

New Tax Calculation System:

According to the new tax system, the income limit is calculated in 7 slabs. The tax is levied here at intervals of Rs 2.5 lakh and at a relatively low rate. The difference here is that no deductions of any kind are allowed from the total income. Professional Tax, Entertainment Allowance, HRA, Standard Deduction, NPS Contribution, Housing Loan Deductions, 80C, Chapter VI-A and other deductions are not allowed. In short, Gross Income itself is considered as taxable income.

However, if the taxable income is less than Rs. 5 lakhs, a rebate of Rs.12500/- is allowed here also.

In the new calculation system, there is no distinction between ordinary person, senior citizen and super senior citizen. There is only one tax slab that treats all individuals equally.

Special Income Rates for Individual & HUF u/s. 115 BAC for FY 2020-21 & FY 2021-22

The Finance Act, 2020, has provided an option to Individuals and HUF for payment of taxes at the following reduced rates from Assessment Year 2021-22 and onwards:

Total Income (Rs)	Rate
Up to 2,50,000	Nil
From 2,50,001 to 5,00,000	5%
From 5,00,001 to 7,50,000	10%
From 7,50,001 to 10,00,000	15%
From 10,00,001 to 12,50,000	20%
From 12,50,001 to 15,00,000	25%
Above 15,00,000	30%

Note 1: Surcharge and Health & Education Cess as well as Rebate u/s.87A: Same as Rates applicable to Individuals given above

Note 2: The option to pay tax at lower rates shall be available only if the total income of assessee is computed without claiming specified exemptions or deductions.

 

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.