Tax is a small word, but the value it holds is very high. It is not just an amount of money that you pay the government but is a contribution that you make in the development of the country. Now, tax calculation can be a hectic job and can consume a lot of time if someone doesn't have an idea about how the taxation system works. So, today, we are going to discuss a solution to this problem which is Tax Calculator. So, let's see what this tool is and how it is beneficial for you.
What Is a Tax Calculator?
Online Tax Calculator is a tool which helps an individual in calculating the tax returns he has to pay on his annual income. This tool takes into consideration different things like, which tax bracket you fall in, all the reliefs you get under section 87A, the education cess you have to pay, and after taking a look at all these aspects, it provides you with a final result. This tool also offers you with some recommended schemes that you can choose from to get tax exemption on your current income. Using this tool is a very simple and the whole process takes a maximum of 1 minute. Let's see how an individual can use this tool.
How to Use?
A tax calculator is a simple tool which anybody can use without facing any problem. All you have to do is follow the below 4 steps after which you will have the tax amount that you are liable to pay.
- When you open an online tax calculator, the first thing you will be asked is the age group you fall in, as the taxation criteria are different for people from different age groups.
- After the age, the next thing you have to enter is your residential status. There will be 3 options, resident, non-resident and not an ordinary resident. Choose one which best suits your current status.
- In the next step, you have to enter your annual income. Remember to enter your exact income, as the taxation criteria are different for different income slabs.
- In the final step, you will be asked if you are eligible for any tax reductions. If any, you have to state that what type of scheme it is and what is the amount that you have invested in that scheme (Max. Amount that you can get tax exemption on is Rs 150000). The calculator will automatically calculate the tax exemption you are liable to get.
So after entering the above data, you will be shown the final tax amount that you are liable to pay.
Benefits of Using a Tax Calculator
This tool provides an individual with a lot of benefits. Let's have a look at them.
Free-to-Use - This is the foremost advantage of this tool. It saves you a lot of money which you would have paid to the charted accountants or financial advisors for doing the same job.
Easy-to-Use - This tool is made in such a way that anyone can use it easily. So if you know how to use a phone then you already know how to use this online tax planner.
Time-Saving - This tool saves you a lot of time which you would have needed if you were to calculate these tax returns all by yourself using the complex formulas.
Up-to-Date - The criteria this tax calculator uses to find your returns are up to date with the government norms and it gets regularly updated if there are changes in the taxation criteria.
So, now you know that what Tax Calculator is and how can you use it for your benefits. This tool is free of cost and the results it provides are also accurate. Therefore, the next time you plan your tax, remember to use this tool for a smooth tax paying experience.