Method of Income Tax Calculation: Last date for filing ITR is 31st July, know how to calculate taxable income

The last date for filing Income Tax Return (ITR) is near. The last date for filing ITR for the financial year 2021-22 or assessment year 2022-23 for individual and salaried employees who do not require account audit is July 31, 2022. Filing ITR is quite easy. You can also fill it yourself by visiting the Income Tax website.

The calculation of total taxable income is required before filing income tax return so that the exact amount of tax to be paid can be estimated. Total taxable income is calculated on the basis of all sources of income of the individual. Under the tax law, it is divided into 5 parts including salary, house property, investment in shares and mutual funds:

  • income from salary
  • income from house property
  • income from capital gains
  • Income from business and profession
  • income from other sources

income from salary

The calculation of total taxable income from salary can be done easily through Form 16. All salaried individuals get Form 16, which is a certificate of their salary component and TDS deducted and deposited in the financial year.

If a salaried individual opts for the old tax regime, he can claim tax exemption by providing documentary proof. These exemptions and deductions include standard deduction of Rs 50,000, house rent allowance and leave travel concession.

Those who do not get Form 16 can also calculate their taxable salary income from their salary slips. The taxable income of the pensioner is calculated under the head ‘Income from salary’.

income from property

House properties are divided into three categories for the purpose of tax calculation. Self-occupied property (self-occupied property), rental property and let out property (deemed to be let out). Self Occupied Property means such property which you use for your living.

According to the rules, two properties are considered as self-occupied properties. The income from these is considered to be zero. If you have a third property, whether you have let it out or not, it will be considered deemed out. Then the income (rent) from this will be considered as your income.

capital gains

Short and long term capital gains tax is levied on the sale of capital assets such as houses, mutual funds or shares. It is calculated on the basis of the period for which the capital asset was held by the individual. There are different income tax rates for capital gains ranging from 10 to 20%.

business and profession

The income that a person earns from freelancing or any other business or profession like lawyer and CA, comes under this category. Here, the individual can claim profit/gain or loss.

income from other sources

Interest received from bank account, fixed deposit, post office savings scheme, dividend from company shares or family pension comes under income from other sources.

tax calculation

Calculation of income from all sources will give a gross taxable income to the individual. Those who are still following the old tax regime can claim deduction from gross taxable income under section 80C, 80D, 80CCD, 80GG etc. After deducting the deduction, net taxable income will be available on which the tax calculation will be done.

2.5 lakh – 5% tax on earning up to 5 lakh

Annual income in rupeesNew tax regimeOld tax regime
Rs 0.0 – Rs 2.5 lakh
NIL

NIL
Rs 2.5 lakh – Rs 5.00 lakh5%5%
Rs 5.00 lakh- Rs 7.5 lakh10%20%
Rs 7.5 lakh – Rs 10.00 lakh15%20%
Rs 10.00 lakhs – Rs 12.50 lakh20%30%
Rs 12.5 lakhs – Rs 15.00 lakh25%30%
> Rs 15 lakh30%30%

How can I file Income Tax Return?

  • First of all go to the official site of Income Tax Department https://eportal.incometax.gov.in/iec/foservices/#/login .
  • Enter your User ID and then click on Continue. Enter your password and login. If you do not remember the password, you can create a new password using Forgot Password.
  • After login, a page will open, where you click on e-file. After that select File Income Tax Return option.
  • Select the assessment year 2021-22 and then continue.
  • You will get the option for Online and Offline. In this you select Online and select ‘Personal’ option.
  • Now choose either ITR-1 or ITR-4 option and continue.
  • If you are salaried then select ITR-1. After that the form will be downloaded on your system. Then go to ‘Filling Type’ and select 139(1)- Original Return.
  • After this the selected form will open in front of you, in which fill all the requested information and keep saving. Fill in the bank account details correctly.
  • If you select offline mode above, then after filling all the information in the download form, you will see the option of Attach File, where to attach your form.
  • After attaching the file, the site will validate the file and click on “Proceed to Verification” after validation.
  • In this way your return will be filed within few minutes and now you can do E-Verification to verify your return.

Benefits of filing ITR

Method of Income Tax Calculation
Method of Income Tax Calculation

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