Are you confused about your total tax liability? Do you want to calculate the exact sum of money you owe to the taxman? If yes, then the tax calculator is the best tool for you. Although the 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.
Tax calculation is not a simple task at all as we have to consider various elements for making the exact calculations to compute the taxes payable to the Income Tax Department. While filing the tax returns, it becomes quite essential to follow each step accurately so as to be sure that every component is considered. The tax calculator is one of the necessities for an individual assessee as it assists him / her in computing the absolute values. Do you know how you can make the most 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 fill in the specifications, and it generates the exact sum.
- Recommendations for Investments: – There are some tax calculators in India which provide the suggestions for better investments. As we know that Section 80C of the Income Tax Act provides tax deduction up to Rs.1.5 lakh, the tax planning tools recommend the plans through which one can avail such deduction.
- Tax Planning Made Easy: – Tax planning in India is a haphazard task as there are several parameters which are required to be kept in mind. These online tax calculators simplify such activities by providing the best solutions.
Different Elements for Tax Computation
The tax calculations are complicated due to the problems involved in the assessments. Thus, one needs to use the best tax calculators in India so that the exact values for return filing can be generated. The online tax planning calculator uses the following components to measure the exact values:
- Type of Assessee – The first thing that one needs to mention in the calculator is the type of person one is. Out of the different classes of assessees, viz., Individual, HUF, company, BOI, etc., it is a must to mention in which category one falls. Moreover, in the case of an individual, it is requested to specify his / her age group so that the calculations are made as per the correct slab rates.
- Residential Status – It is a further necessity for the assessee to specify the residential status. The reason being is that Income Tax Act has different rules and requirements for Resident, Non-Resident Individuals (NRIs), and Resident & Not Ordinarily Residents (RNOR).
- Gross Annual Income – Once the type of assessee and the residential status is decided, one is requested to specify the annual income on which payable taxes are computed. It is the gross annual income which is earned by the assessee in the particular financial year. It is that sum on which different adjustments are made, and one claims deductions to compute the net taxable income.
- Deductions Claimed – The online tax calculator also asks for the deductions which are claimed under different sections of the Act, say 80C, 80D, etc. This amount is deductible to compute the net taxable income after going through the appropriate adjustments to fetch the correct tax liability for the current financial year.
Hence, by evaluating the exact sum of the amount payable to the taxman, one can do the best tax planning in India for any financial year. The tax calculator is the best tool to be used online as one need not pay any amount for using it. If you too have concerns in calculating your taxes, then you must begin with the best tax calculator.