While calculating various taxes can be a tedious and cumbersome task involving multiple calculations, they can be easily done through the various automatic tax calculators available online, free of cost.
Income tax is one of the major sources of revenue that the central government levies on Indian citizens and companies. It is the statutory obligation of every Indian firm and individual citizen to pay income tax for every financial year if their total income earned during that year comes under the purview of any of the income tax slabs.
The income tax is generally paid in advance through advance tax or TDS (Tax Deducted at Source). Let us find out more about these two types before discussing how to calculate these taxes.
Advance Tax
As the name suggests, advance tax is a type of income tax paid in advance. Income tax is usually calculated and charged after you earn the income, but in the case of advance tax, the taxpayer must estimate the income for the full year. Thereafter, the tax is paid at a regular interval based on this estimate.
It is also known as the ‘pay as you earn’ tax scheme.
Applicability of Advance Tax
Anyone who has a total tax liability of Rs 10,000 or more in a financial year has to pay advance tax. This includes salaried persons, professionals, freelancers and businesses.
However, individuals whose income solely depends on their salary generally don’t require to pay advance tax as their employer regularly deduct TDS from their salary.
Furthermore, business owners opting for the presumptive taxation scheme under section 44AD need to pay the entire advance tax in one lump sum instalment on or before March 15 every year.
Tax Deducted at Source (TDS)
TDS is deducted from the money paid to an individual or entity at the time of payment that can be in the form of salary, commission, rent, professional fees, etc. While it is the duty of the party making the payment to deduct TDS before making the payment and deposit the same to the income tax department, the tax credit is earned by the person who receives the payment after deduction.
The recipient can claim the amount from the income tax department while filing his/her ITR if the TDS deducted is more than the statutory requirement.
Individuals can save or reduce TDS deductions from their salary by submitting proof of tax-saving investments before their employer. Similarly, a person is required to submit Form 15G or 15H to his/her bank to prevent or reduce TDS on interest received on the bank account.
How to Calculate Income Tax, TDS or Advance Tax
1. Income Tax Calculator
You can find a lot of free online income tax calculators provided by different vendors. However, you should choose the one that has the most user-friendly interactive interface.
For instance, the income tax calculator provided at the official site of some reputed insurance firms in India can provide a very fast and convenient user interface that you can use to calculate your tax liabilities. You only need to fill up your personal and income details, followed by investment details, and the entire tax calculation is displayed in a tabular format.
2. Advance Tax and TDS Calculator
You can visit the following links of the income tax portal to calculate advance tax and TDS
3. Advance Tax Calculator
- Visit https://www.incometaxindia.gov.in/pages/tools/advance-tax-calculator.aspx
- Carefully select the type of taxpayer that you are.
- Select “Yes” for the option “Whether opting for taxation under Section 115BAC” only if you want to pay taxes under the new regime. Otherwise, select “No”.
- Fill up the rest of the form as per your income and click “calculate” to get your advance tax estimate.
4. TDS Calculator
- Visit https://www.incometaxindia.gov.in/pages/tools/tds-calculator.aspx
- Fill up the form as per your income and click “calculate”.
- Pay special attention to the field named Section/Description. This field contains the list of all such incomes that come under the purview of TDS.
Remember, if you have different types of income listed in the field, then you need to individually calculate TDS by selecting each income type, inputting income and calculating the TDS.
You have to repeat this process multiple times for different income types as the site does not have any option, for now, to input all types of income at a go.
While tax calculation has always been a forte of a select group of professionals like tax consultants and CAs, today, anyone can have an estimate of their tax liabilities through these online income tax calculators as long as they are inquisitive about taxes and like to have control over their tax payments.
The author, Dr. David K Simson is a trained radiation oncologist specializing in advanced radiation techniques such as intensity-modulated radiotherapy (IMRT), image-guided radiotherapy (IGRT), volumetric modulated arc therapy (VMAT) / Rapid Arc, stereotactic body radiotherapy (SBRT), stereotactic radiotherapy (SRT), stereotactic radiosurgery (SRS). He is also experienced in interstitial, intracavitary, and intraluminal brachytherapy.
