How To Calculate Income Tax | Year 2022-2023

How to calculate income tax

How to calculate income tax :-Hello happy readers, do you know how to calculate income tax on someone’s income!! (we are not specifically indicating your income because you may be a student or learner who is curious to know how do things work). Before knowing the calculation process let us understand what is income first.

How to calculate income tax
How to calculate income tax

What is income?

The term ‘income’ is generally referred to the amount of money and other transfers of value received over a set period of time in exchange for services or products.

Now, what is income tax?

Income tax basically means a tax imposed on entities or individuals in respect of the income or profits earned by them. It is a direct tax that a government Levies. It is used to fund public services, pay government obligations and provide goods for citizens.

After knowing income and income tax let us find how we will calculate income tax!!

How to calculate income tax ?

Income tax is imposed according to different income tax slabs (income slabs means different category of income, i.e, ₹2,50,000 to ₹5,00,000 or ₹5,00,000 to ₹10,00,000 etc). We are talking about only individual tax payers and they are divided in three categories:

A. Individuals (aged less than 60 years) which includes both residents and non-residents.

Total Income (Rs)Rate
Up to 2,50,000Nil
From 2,50,001 to 5,00,0005%
From 5,00,001 to 7,50,00010%
From 7,50,001 to 10,00,00015%
From 10,00,001 to 12,50,00020%
From 12,50,001 to 15,00,00025%
Above 15,00,00030%

B. Resident senior citizens (60 to 80 years)

Net Income RangeRate of Income-tax
Up to Rs. 3,00,000
Rs. 3,00,000 to Rs. 5,00,0005%
Rs. 5,00,000 to Rs. 10,00,00020%
Above Rs. 10,00,00030%

C. Resident super senior citizens (more than 80 years)

Net Income RangeRate of Income-tax
Up to Rs. 5,00,000
Rs. 5,00,000 to Rs. 10,00,000
Above Rs. 10,00,00030%
(who is 80 years or more at any time during the previous year)

These slabs are of new tax regime and we have an old one too. If someone wants to pay his/her tax in old regime then he/she can opt for that. The new tax regime is largely beneficial to middle class tax payers who have a taxable income upto ₹15,00,000 lacs. Old regime is a better option for high-income earners.

The difference between both tax regime also includes investments and allowance like house rent allowances, travel allowances. So before considering which resume should be chosen, one must consider these factors too.

Here’s the table which shows the difference between old and new tax regime:-

Click here to join our telegram channel where you will get more articles link like this – Click Here

Read Previous

5 Types of Bank Frauds In India & Safe Banking Tips

Read Next

National Symbols Of India – 15 National Symbols of India

One Comment

  • This is informative.How GDP is calculated??

Leave a Reply

%d bloggers like this: