Are you confused about your total tax liability? Do you want to calculate the exact amount of money you owe the tax collector? If yes, then the tax calculator is the best tool for you. Although financial advisors and tax consultants claim to provide the perfect solution for tax savings in a particular year, the online tax calculator has left them behind.
The calculation of taxes is not a simple task at all since we have to consider several elements to make the exact calculations to compute the taxes to be paid to the Income Tax Department. When filing tax returns, it becomes very essential to follow each step accurately to make sure that all components are considered. The tax calculator is one of the needs of an individual assessor, as it helps him to calculate the absolute values. Do you know how you can get the most out of such an amazing tool? Let’s evaluate.
Reasons to opt for tax calculators
- Simple calculations:- The tax planning calculator available online in India is easy to use even for a layman. One is required to complete the specifications, and it generates the exact sum.
- Recommendations for investments:- There are some tax calculators in India that give suggestions for better investments. As we know that Section 80C of the Income Tax Act provides a tax deduction up to Rs.1.5 lakh, the tax planning tools recommend the plans through which such deduction can be availed.
- Simplified Tax Planning:- Tax planning in India is a random task as there are several parameters that need to be taken into account. These online tax calculators simplify such activities by providing the best solutions.
Different Elements for Tax Computation
Tax calculations are complicated due to the issues involved in assessments. Therefore, it is necessary to use the best tax calculators in India so that the exact values can be generated for the filing of returns. The online tax planning calculator uses the following components to measure exact values:
- Assessment Type – The first thing one needs to mention in the calculator is the type of person you are. Of the different classes of evaluated, namely, individual, HUF, company, BOI, etc., it is essential to mention in which category they are. In addition, in the case of a natural person, it is requested to specify their age group so that the calculations are made according to the correct slab rates.
- residential status – It is an additional necessity for the evaluated to specify the residential state. The reason is that the Income Tax Law has different rules and requirements for Residents, Non-Resident Individuals (NRI) and Residents and Ordinary Non-Residents (RNOR).
- annual gross income – Once the type of assignee and resident status have been decided, it is requested to specify the annual income on which the taxes to be paid are computed. It is the gross annual income earned by the beneficiary in the particular tax year. It is that sum on which different adjustments are made, and deductions are claimed to compute the net taxable income.
- Deductions Claimed – The online tax calculator also requests the deductions that are claimed under different sections of the Act, say 80C, 80D, etc. This amount is deductible to calculate the net taxable income after going through the corresponding adjustments to obtain the correct tax liability for the current year.
Thus, by assessing the exact sum of the amount payable to the tax collector, one can do the best tax planning in India for any tax year. Tax calculator is the best tool to use online as you don’t need to pay any amount for using it. If you are also concerned about calculating your taxes, you should start with the best tax calculator.