How to Save Time and Money with an Income Tax Calculator?
Calculating your taxable income can often feel challenging, especially when the amount seems far from your expectations. If you are unsure of the possible deductions, exemptions, and other strategies to reduce your tax burden, you might end up overpaying. Solving the issue, the income tax calculator can be your rescue in the situation. It not only delivers accurate results but also gives you the time to reflect on your finances and develop effective strategies. Discover how you can maximise your savings right here.
Why Use an Income Tax Calculator?
There are numerous benefits and reasons to use an income tax calculator. Let us enlist them for you:
User-Friendly Experience
The income tax calculators are designed to allow easy usage for every age group. Hence, the interfaces are friendly and simple to understand. Typically, calculators require you to enter the values and, if applicable, the date of birth to receive accurate results for age-related tax brackets.
Get Reliable Results
Although you must ensure the calculator is updated with the latest income tax rates, deductions, and exemptions, the calculator offers reliable results based on current inputs. Further, they consider every relevant factor, ensuring the output aligns with current guidelines.
Time and Cost-Saving Approach
Using the income tax calculator saves time by eliminating the need to research everything. It also reduces the need to visit a finance professional for basic calculations, saving both time and money. Further, the easy-to-fill form allows you to simply input the details to get a resultant amount within a few seconds.
Helps in Planning
The income tax calculator can help clarify the factors affecting the deductions and taxes and aid in scenario analysis by trying different strategies. Hence, it contributes to logical and futuristic decisions on savings, financial planning, and expenditures.
Reduces Human Error
Lack of information on certain incomes, updated information, manual entry errors, and more are possible human errors that can lead to incorrect values. These errors may negatively impact financial decisions and strategies. An income tax calculator helps minimise these human errors, ensuring more accurate outcomes.
How to Use an Income Tax Calculator?
Using the income tax calculator is simple, with a few reasonable steps. Let us break them down:
- Fill in your date of birth to ensure the application of the accurate tax rates as per your age.
- Fill in the salary and other incomes you receive.
- Enter investment details, if any. It will include the investments to be exempted under Section 80C (up to ₹1.5 lakh) and 80CCD(1B) (up to ₹50,000).
- Fill out the medical insurance premium u/s 80D if you have.
- Also, enter the HRA and the rent amount to calculate the HRA exemption, based on your eligibility and salary structure.
- Do state the interest paid on the home or education loan amount, if you are currently paying it, to include it in tax benefits (Section 24(b) for home loans and Section 80E for education loans).
That’s it! Proceed further by clicking on ‘continue’ to get the applicable income tax.
Conclusion
Knowing the exact tax amount to be paid is essential to planning the finances accordingly. However, the task can be tedious if it needs to be done by oneself. Solving the issue with the user-friendly and easily accessible option, the income tax calculator can be your perfect aid.
Photo by Iryna Tysiak on Unsplash (Free for commercial use)
Image Published on January 17, 2018
