A look into the income tax calculation for the FY 2022-23 for income earned above 5 lakhs as per the New Tax Regime, and how it is better over the Old Tax Regime.
As the name inevitably suggests, income tax refers to the specific tax that is computed on your total taxable income according to the specific tax slab that it falls under. When you add your income earned from various sources, such as rent, annual salary, capital gains, and the like, you derive your gross total income.
It is a simple, fast and convenient-to-use online tool that helps you calculate the total amount of tax that you need to pay in seconds!
Step 1: Choose your age from the age range given
Step 2: Enter your income earned per annum
Step 3: Enter all your investments made as well as the various deductions you are eligible for under different sections of the Income Tax Act, such as –
– Section 24B (Interest payable on repayment of home loan)
– Section 80G (donations made as charity)
– Section 80C (investments made in PPF, ELSS funds, and the like)
– Section 80E (Interest payable on repayment of educational loan)
– Section 80CCD(1B) [earnings under the National Pension System)
Step 4: Enter the various tax exemptions that you are eligible for under HRA, LTA, and the like
Now let us look at the tax slab under which the income tax above 5 Lakh of a salaried person falls under:
Up to Rs. 2.5 Lac - None
Rs. 2.5 Lac – Rs. 5 Lac - 5% of income over Rs. 2,50,000 + 4% surcharge
Rs. 5 Lac – Rs. 7.5 Lac - Rs. 12,500 + 10% total income earned over Rs. 5,00,000 + 4% surcharge
Rs. 7.5 Lac – Rs. 10 Lac -Rs. 37,500 + 15% total income earned over Rs. 7,50,000 + 4% surcharge
Rs. 10 Lac– Rs. 12.5 Lac - Rs. 75,000 + 20% total income earned over Rs. 10,00,000 + 4% surcharge
Rs. 12.5 Lac– Rs. 15 Lac - Rs. 75,000 + 20% total income earned over Rs. 10,00,000 + 4% surcharge
Over Rs. 15,00,000 - Rs. 1,87,500 + 30% of the total income earned over Rs. 15,00,000 + 4% surcharge
Under the New Tax Regime, the tax rates calculated for all the categories of individuals, such as salaried individuals below 60 years old, senior citizens over 60, as well as super senior citizens above 80, is the same.
1. Conveyance allowance incurred on travel to work
2. Transport allowance for specially-abled people is deducted
3. Deductions for new employees under Section 80JJAA
4. Investment made in the Notified Pension Scheme (NPS) deducted under Section 80CCD (2)
5. Under Section 32, depreciation of assets, such as machinery, not including the extra depreciation expenses incurred by the employee traveling for work reasons or being transferred, is considered for deduction