India’s Union Budget has left most people in a dilemma with the choice of the tax regimes. Both old and new regimes need a thorough assessment before a tax payer picks one. With the new income tax calculator FY 2023-24, you will be able to gauge the impact of both tax structures on your income and tax liability. The unique calculator will help estimate tax benefits on your income.

What is a Tax Calculator India?

A tax calculator India is a tool that helps calculate taxes you are required to pay under the old or the new tax regime. The calculator uses basic information, such as salary, rent, tuition fees, interest on education loans, and other savings to calculate the tax liability.

It gives the amount of total tax payable under the old and new schemes. Also, it recommends investment opportunities for the individual based on their tax liability. The tax calculator India is a convenient tool and is free to use. It is easy to understand and can be used by anyone to calculate their tax liability and enjoy home loan tax benefits.

How to Use Income Tax Calculator 2024?

Any standard income tax calculator is the best tool to calculate your tax online. It helps users determine their tax outflow for the ongoing financial year. The income tax calculator AY 2023-24, however, requires some data on the user’s income, expenses, and investments for the taxpayer to calculate the tax online. Let us now see the step-by-step process of how one can make use of an income tax calculator online.

Step 1: Enter the annual income – Insert the details on income earned under different heads, including salary, interest income from deposits, rent from properties, capital gains, and other taxable incomes.

Step 2: Enter the tax exemptions – Input the details of tax exemptions available against the income earned during the current financial year. Such exemptions can be against your salary, self-occupied properties, and also let-out ones.

Step 3: Tax deductions – Share details of deductions available per section 80C expenses and investments, NPS, health insurance, education loan, and other donations.

Step 4: Basic details – The user may be prompted to insert their age and taxes paid during the financial year. A person’s age helps determine the payable tax amount.

Step 4: Tax breakdown – In this particular step, the income tax calculator calculates the tax per the new scheme and also the old. Besides, it determines how much more is required to be invested to make optimum tax savings. Taxpayers can choose to go back at any step and change values as needed. The calculator also suggests the appropriate investment options to make additional tax saving.

4 Steps to Claiming Interest on Home Loan Deduction Using the Tax Calculator India

Step 1: Documents you’ll need

• Ownership details of the property – You must be an owner of the property to claim this deduction. In case, if you are a co-owner of the property, the first and foremost step would be to chalk out your share. The amount of deduction you can claim is based on your share in the property for which the home loan has been availed of.

• Completion of construction or date of purchase of the property – The deduction on home loan interest can be claimed from the year in which the construction of the property is completed. You can also claim home loan pre-construction interest. Pre-construction interest can also be claimed in five equal instalments beginning from the year of a home purchase or the year of completion of construction.

• Borrower Details – Just like property ownership, a home loan in India must be in your name if you need to claim the tax deduction. You may also be a co-borrower in a housing loan to enjoy the benefits.

• A certificate – A certificate from the lender which has your home loan interest and principal details is crucial.

• Municipal taxes paid – Municipal taxes can be subtracted from house property income only when paid during the year.

Step 2: Submit the Documents to Your Employer

• If you claim interest on home loan deductions, you must inform your employer so they can adjust the TDS accordingly. Therefore, you’ll not have to wait until the end of the financial year to figure out tax liability and adjust the tax. So, make it a point to let your employer know.

• If you are a freelancer or you’re self-employed – If you are a self-employed or freelancer, you do not need to submit the documents anywhere. But, you’ll need the documents to estimate the advance tax liabilities for every quarter.

• You’re not required to submit the documents to the income tax department.

Step 3: Calculation of Income from House Property

In the case of a self-occupied house, the amount of tax deduction is restricted to Rs.2,00,000. However, for let-out houses, there is no limit on the amount of interest you can claim as part of your tax deduction. From the financial year 2017-18 onward, the deduction for home loan interest on the let-out property is limited to the extent to which the loss of such house property does not exceed Rs.2 lakh.

Here are the steps to calculate your income from House Property with an income tax calculator:

Gross Value of the property (nil in the case of self-occupied properties and rental value in case it is rented) – Municipal Taxes paid – Standard Deduction (30% of the net yearly value = Gross Value less municipal taxes) – Deductions for interest on housing loan = Income from your property.

Do note that when you file your return with Income Tax Calculator AY 2023-24, you do not have to do these calculations. You need to enter the details and the tool will automatically calculate the amount, which is the income from the house property.

Step 4: Claim Interest on Housing Loan Deduction and Home Principal Repayment per Section 80C

In case there is a home loan principal repayment during the year, principal repayments are eligible for home loan deduction per section 80 C. However, the total amount allowed to be claimed under section 80C is capped at Rs.1,50,000.  

Now that you have a fair idea what are you waiting for, start planning and checking the tax implications today.