One such source is your income from salary.

The Income Tax Department of India lists 5 sources of income under which each person can designate their income. Generation of any kind of income will be taxable, provided you (the tax-assessee) categorises each income under the aforementioned sources. Interest earned from tax-free bonds and salary components like LTA are examples of exemptions.Īs per the rules and regulations stated by the Income Tax Department of India, an individual is allowed, at all points of time, to have 5 sources namely, salary income, capital gains, house property income, business income, and income from other sources. Exemptions are available under Sections 10 and 54.

Exemption: It is a specific amount that is excluded from the gross total income before calculating tax.

Specific kinds of spending such as investment in life insurance policies and payment of children’s tuition fee help you avail a tax deduction.

Deduction: It is a reduction in the total taxable income based on Section 80 and Chapter VI-A.

Your income for the current year is assessed in the next year (assessment year).

Previous Year: The financial year that acts as a precursor to the following assessment year.

This is the time period wherein you are required to collate all your documents and submit your investment proofs.

Financial Year: The period between the current year’s April 1st and the following year’s March 31st.

Assessment Year: When your income for a certain financial year is assessed in the coming financial year, it is referred to as an assessment year.

Important Terms and Definitions in Tax Calculation Your total tax liability will be displayed instantly on the screen.

Step 9: Click on the 'Calculate' button.Step 6: Enter the figures required in the fields under 'Deductions'.Step 5: Click on the 'Deductions' field.Step 4: Enter the figures required in the fields under 'Income'.Step 2: Select your gender and if you are a senior citizen or super-senior citizen.

Step 1: Select the assessment year for which you want to calculate your income tax.If you want to save time and still get an accurate calculation of your income tax, all you have to do is use BankBazaar's free online income tax calculator. How to Use BankBazaar's Income Tax Calculator You can use the following tax calculator to calculate income tax amount you will be required to pay. The calculator provides an approximate figure of your income tax liability by taking into account various data such as your income, deductions, HRA exemption, etc. An Income tax calculator is an online tool designed to calculate how much income tax you are liable to pay in any given financial year.

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