Union Budget 2021 | Income tax calculator
Without making any changes to the personal income tax slab, the Union Budget 2021- 22 has provided relief to senior citizens in the filing of I-T returns; reduced the time limit for I-T proceedings; announced the setting-up of a Dispute Resolution Committee and faceless Income Tax Appellate Tribunal proceedings; provided relaxations for Non-Resident Indians (NRI); offered an increase in the exemption limit from audit; and accounted for relief for dividend income.
Last year, Ms. Sitharaman introduced a new personal income tax regime, where there is a possibility of paying lesser tax for those who forgo reliefs and exemptions. The new are, however, optional.
|
Income (per annum) |
Proposed Tax Rate |
Old Tax Rate |
|---|---|---|
|
Upto ₹2.5 lakh |
No tax |
No tax |
|
₹2.5 lakh-₹5 lakh |
No tax |
5% |
|
₹5 lakh to ₹7.5 lakh |
10% |
20% |
|
₹7.5 lakh to ₹10 lakh |
15% |
20% |
|
₹10 lakh to ₹12.5 lakh |
20% |
30% |
|
₹12.5 lakh to ₹15 lakh |
25% |
30% |
|
Above ₹15 lakh |
30% |
30% |
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Here we take a look at three scenarios of taxable income for salaried individuals.
Illustration 1 – Salaried Individual – Taxable income below ₹10 lakhs
| Particulars | Old Regime | Â | New Regime | Â |
| Income from Salary | Â | Â | Â | Â |
| Basic Salary | 450,000 | Â | 450,000 | Â |
| House Rent Allowance (HRA) | 180,000 | Â | 180,000 | Â |
| Leave Travel Assistance (LTA) | 75,000 | Â | 75,000 | Â |
| Special Allowance | 80,000 | Â | 80,000 | Â |
| Employer’s contribution to NPS | 45,000 | Â | 45,000 | Â |
| Additional Perquisite | – | Â | – | Â |
| Â | 830,000 | Â | 830,000 | Â |
| Exemptions | Â | Â | Â | Â |
| HRA | – | Â | – | Â |
| LTA | – | Â | – | Â |
| Â | Â | Â | Â | Â |
| Less: Standard deduction | (50,000) | Â | – | Â |
| Less: Professional tax | (2,400) | 777,600 | – | 830,000 |
| Â | Â | Â | Â | Â |
| Income from House Property | Â | Â | Â | – |
| Â | Â | Â | Â | Â |
| Income from Other Sources | Â | Â | Â | Â |
| Interest on Savings Bank Account | 10,000 | Â | 10,000 | Â |
| Interest on Fixed Deposits | 40,000 | 50,000 | 40,000 | 50,000 |
| Â | Â | Â | Â | Â |
| Â | Â | Â | Â | Â |
| Gross Total income | Â | 827,600 | Â | 880,000 |
| Â | Â | Â | Â | Â |
| Deductions under Chapter VIA | Â | Â | Â | Â |
| Section 80C | Â | (54,000) | Â | Â |
| Employee Contribution to Provident Fund | 54,000 | Â | – | Â |
| Contribution to Public Provident Fund | – | Â | – | Â |
| LIC Premium | Â | Â | Â | Â |
| Tuition fee | Â | Â | Â | Â |
| ELSS | Â | Â | Â | Â |
| Â | Â | Â | Â | Â |
| Section 80CCD | Â | (45,000) | Â | (45,000) |
| NPS- Employee Additional Contribution | Â | Â | – | Â |
| NPS- Employer Contribution | 45,000 | Â | 45,000 | Â |
| Â | Â | Â | Â | Â |
| Section 80D – Medical Insurance Premium | – | – | – | – |
| Â | Â | Â | Â | Â |
| Section 80TTA – Interest from savings bank | – | (10,000) | – | – |
| Pre Tax Income (Total Taxable income) | Â | 718,600 | Â | 835,000 |
| Â | Â | Â | Â | Â |
| Income-tax | Â | 56,220 | Â | 50,250 |
| Less: Rebate under section 87A | Â | – | Â | – |
| Total tax payable after Rebate | Â | 56,220 | Â | 50,250 |
| Â | Â | Â | Â | Â |
| Surcharge @10% / 15% / 25% / 37% | Â | – | Â | – |
| Total tax payable after surcharge | Â | 56,220 | Â | 50,250 |
| Health and Education Cess @ 4% | Â | 2,249 | Â | 2,010 |
| Â | Â | Â | Â | Â |
| Total tax, surcharge and education cess | Â | 58,470 | Â | 52,260 |
| Â | Â | Â | Â | Â |
| Impact in tax liability (in ₹) |  |  |  | 6,210 |
Â
Illustration 2 – Salaried Individual – Taxable income in the range of ₹10 Lakh to ₹15 Lakh
| Particulars | Old Regime | Â | New Regime | Â |
| Income from Salary | Â | Â | Â | Â |
| Basic Salary | 850,000 | Â | 850,000 | Â |
| House Rent Allowance (HRA) | 150,000 | Â | 150,000 | Â |
| Leave Travel Assistance (LTA) | 75,000 | Â | 75,000 | Â |
| Special Allowance | 500,000 | Â | 500,000 | Â |
| Employer’s contribution to NPS | 85,000 | Â | 85,000 | Â |
| Additional Perquisite | – | Â | – | Â |
| Â | 1,660,000 | Â | 1,660,000 | Â |
| Exemptions | Â | Â | Â | Â |
| HRA | (80,000) | Â | – | Â |
| LTA | (75,000) | Â | – | Â |
| Â | Â | Â | Â | Â |
| Less: Standard deduction | (50,000) | Â | – | Â |
| Less: Professional tax | (2,400) | 1,452,600 | – | 1,660,000 |
| Â | Â | Â | Â | Â |
| Income from House Property | Â | (200,000) | Â | – |
| Â | Â | Â | Â | Â |
| Income from Other Sources | Â | Â | Â | Â |
| Interest on Savings Bank Account | 30,000 | Â | 30,000 | Â |
| Interest on Fixed Deposits | 15,000 | 45,000 | 15,000 | 45,000 |
| Â | Â | Â | Â | Â |
| Â | Â | Â | Â | Â |
| Gross Total income | Â | 1,297,600 | Â | 1,705,000 |
| Â | Â | Â | Â | Â |
| Deductions under Chapter VIA | Â | Â | Â | Â |
| Section 80C | Â | (150,000) | Â | – |
| Employee Contribution to Provident Fund | 102,000 | Â | – | Â |
| Contribution to Public Provident Fund | 50,000 | Â | – | Â |
| LIC Premium | Â | Â | Â | Â |
| Tuition fee | Â | Â | Â | Â |
| ELSS | Â | Â | Â | Â |
| Â | Â | Â | Â | Â |
| Section 80CCD | Â | (135,000) | Â | (85,000) |
| NPS- Employee Additional Contribution | 100,000 | Â | – | Â |
| NPS- Employer Contribution | 85,000 | Â | 85,000 | Â |
| Â | Â | Â | Â | Â |
| Section 80D – Medical Insurance Premium | Â | (18,000) | Â | – |
| Â | Â | Â | Â | Â |
| Section 80TTA – Interest from savings bank | Â | (10,000) | Â | – |
| Pre Tax Income (Total Taxable income) | Â | 984,600 | Â | 1,620,000 |
| Â | Â | Â | Â | Â |
| Income-tax | Â | 109,420 | Â | 223,500 |
| Less: Rebate under section 87A | Â | – | Â | – |
| Total tax payable after Rebate | Â | 109,420 | Â | 223,500 |
| Â | Â | Â | Â | Â |
| Surcharge @10% / 15% / 25% / 37% | Â | – | Â | – |
| Total tax payable after surcharge | Â | 109,420 | Â | 223,500 |
| Health and Education Cess @ 4% | Â | 4,377 | Â | 8,940 |
| Â | Â | Â | Â | Â |
| Total tax, surcharge and education cess | Â | 113,800 | Â | 232,440 |
| Â | Â | Â | Â | Â |
| Impact in tax liability (in ₹) |  |  |  | (118,640) |
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Illustration 3 – Salaried Individual – Taxable income in the range of ₹15 Lakh to ₹50 Lakh
| Particulars | Old Regime | Â | New Regime | Â |
| Income from Salary | Â | Â | Â | Â |
| Basic Salary | 1,150,000 | Â | 1,150,000 | Â |
| House Rent Allowance (HRA) | 500,000 | Â | 500,000 | Â |
| Leave Travel Assistance (LTA) | 150,000 | Â | 150,000 | Â |
| Special Allowance | 700,000 | Â | 700,000 | Â |
| Employer’s contribution to NPS | 115,000 | Â | 115,000 | Â |
| Additional Perquisite | – | Â | – | Â |
| Â | 2,615,000 | Â | 2,615,000 | Â |
| Exemptions | Â | Â | Â | Â |
| HRA | (305,000) | Â | – | Â |
| LTA | (75,000) | Â | – | Â |
| Â | Â | Â | Â | Â |
| Less: Standard deduction | (50,000) | Â | – | Â |
| Less: Professional tax | (2,400) | 2,182,600 | – | 2,615,000 |
| Â | Â | Â | Â | Â |
| Income from House Property | Â | (200,000) | Â | – |
| Â | Â | Â | Â | Â |
| Income from Other Sources | Â | Â | Â | Â |
| Interest on Savings Bank Account | 50,000 | Â | 50,000 | Â |
| Interest on Fixed Deposits | 25,000 | 75,000 | 25,000 | 75,000 |
| Â | Â | Â | Â | Â |
| Â | Â | Â | Â | Â |
| Gross Total income | Â | 2,057,600 | Â | 2,690,000 |
| Â | Â | Â | Â | Â |
| Deductions under Chapter VIA | Â | Â | Â | Â |
| Section 80C | Â | (150,000) | Â | – |
| Employee Contribution to Provident Fund | 138,000 | Â | – | Â |
| Contribution to Public Provident Fund | 50,000 | Â | – | Â |
| LIC Premium | Â | Â | Â | Â |
| Tuition fee | Â | Â | Â | Â |
| ELSS | Â | Â | Â | Â |
| Â | Â | Â | Â | Â |
| Section 80CCD | Â | (165,000) | Â | (115,000) |
| NPS- Employee Additional Contribution | 100,000 | Â | – | Â |
| NPS- Employer Contribution | 115,000 | Â | 115,000 | Â |
| Â | Â | Â | Â | Â |
| Section 80D – Medical Insurance Premium | Â | (18,000) | Â | – |
| Â | Â | Â | Â | Â |
| Section 80TTA – Interest from savings bank | Â | (10,000) | Â | – |
| Pre Tax Income (Total Taxable income) | Â | 1,714,600 | Â | 2,575,000 |
| Â | Â | Â | Â | Â |
| Income-tax | Â | 326,880 | Â | 510,000 |
| Less: Rebate under section 87A | Â | – | Â | – |
| Total tax payable after Rebate | Â | 326,880 | Â | 510,000 |
| Â | Â | Â | Â | Â |
| Surcharge @10% / 15% / 25% / 37% | Â | – | Â | – |
| Total tax payable after surcharge | Â | 326,880 | Â | 510,000 |
| Health and Education Cess @ 4% | Â | 13,075 | Â | 20,400 |
| Â | Â | Â | Â | Â |
| Total tax, surcharge and education cess | Â | 339,960 | Â | 530,400 |
| Â | Â | Â | Â | Â |
| Impact in tax liability (in ₹) |  |  |  | (190,440) |
Â
These calculations are based on E&Y calculations. To try out various scenarios, download Google Sheet at bit.ly/taxscenario
Disclaimer – This tax calculator works under certain assumptions to calculate estimated tax liability; and may not provide accurate results in all circumstances. Thus, your actual tax liability may be different. Readers are advised to seek appropriate professional tax advice and compute their tax based on applicable provisions of the Income-tax Act, 1961 and Income-tax Rules, 1962.
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