How To Submit and Calculate Income Tax Return Online (with example)

Making the income tax calculation easier, simple, and to the purest, the new income tax regime has come into the effect from 1st of April, 2020. 

As the old income tax regime is still in the pavement, the taxpayer has the option to either continue with the existing one or switch to the new slab regime. 

his gives individual taxpayers two-fold advantages to pay their liability for tax through the preferred mode either with the existing tax regime (with tax-exemption and deductions) or with the new tax regime (without 70 tax-exemptions and deductions). 

Based on the recent research, it was found that more than half of individual taxpayers firmly welcome and adopt a new income tax scheme. On the other hand, sustained business using the old tax regime method. 

Below table consist the income tax slabs that are applicable in the new tax regime for single person from FY 2020-21:

[Important notice: Under the new tax calculator regime, individual is eligible for only one kind of deduction i.e. NPS (National Pension System) under section 80CCD(2)]
 

Now, let’s understand the concept of ‘how to calculate my income tax return’ or ‘how to calculate income tax return amount’.

Considering the applicability and adaptability of the latest income tax method is at a very high. We will elaborate by taking an example using the new income tax regime. 

Keep reading…!

Jhanvi has a total income of Rs. 16 lakh in FY 2020-21. Further, during the year, your employer has contributed Rs. 60,000 to your NPS account. Also, the Health and Education cess is application at the prescribed rate of 4 per cent.

What will be the net income tax amount that will be paid by the Jhanvi? 

Let's understand the breakdown and calculations of income tax amount step-by-step. 

1. The net taxable income amount is 15, 40,000 (Rs. 16, 00,000 minus Rs. 60,000). The calculation of liability tax in the new tax regime will be made on Rs. 15.40 lakh. 
2. Referring the point no. 1 (above table) there will be no tax on the first 2.5 lakh from Rs. 15.40 lakh. Subtracting from Rs. 15.40, you will leave with Rs. 12.90 lakh which is still chargeable to tax. 
3. According to point no. 2 (above table) the next Rs. 2.5 lakh (Rs. 5.0 lakh minus Rs. 2.5 Lakh) from Rs. 12.90 lakh will be taxed at 5 per cent. So, the tax amount will be Rs. 12,500. Now, the net income taxable amount will be Rs. 10.40 lakh which is left for chargeable. 
4. The income left for chargeable is Rs. 10, 40,000. Out of this, the next Rs. 2.5 lakh (Rs. 7.5 lakh minus Rs. 5.0 lakh) will be taxed at 10 per cent which will be around Rs. 25,000. 
5. Following the same proceeding, Rs. 37,500 equated to 15 percent of Rs. 2.5 lakh (Rs. 10.0 lakh minus Rs. 7.5 lakh) from Rs. 7.9 lakh will be charged. Another Rs. 50,000 will be charged at 20 percent equated to Rs. 2.5 lakh from Rs. 5.4 lakh. Again, Rs. 62,500 will be charged at 25 percent equated to Rs. 2.5 lakh from Rs. 2.9 lakh. 
6. At last, the income for taxable income is left with Rs. 40,000 (Rs. 2.9 lakh minus Rs. 2.5 lakh) will be taxed at 30 percent. The tax liability will be Rs. 12,000.  

Now summing up all the chargeable tax rate slabs the new tax regime comes out to be Rs. 1, 99,500 (0+12,500+25,000+37,500+50,000+62,500+12,000). Adding health and education rate of 4%. The cess amount will be Rs. 7,980.

Therefore, the net income tax payable amount that will be paid by Jhanvi is Rs. 2, 07,480.

To calculate income tax, include income from the sources i.e.

• Income from Salary (salary paid by your employer)
• Income from house property (add any rental income &  deduct interest paid on home loan)
• Income from capital gains (profits on sale of shares or house property or any other valuables)
• Income from business/profession (earning from freelancing or a business or profession)
• Income from other sources (saving account interest income, fixed deposit interest income, interest income from bonds)

How to Submit Income Tax Return Online?

Well, there is prioritizing practicing in making the process of filing or submitting ITR online easier. At some sort, the current process of ITR filing is very much effective and simpler. 

Here is the complete process to submit income tax return online:

1. Gather required archives, for example, Financial Statements, TDS testaments (Form16/16A), bank statements, LIP receipts, School fees receipts. 
2. Download and check Form 26AS. 
3. Compute gross total income from all the sources for the financial year. 
4. Make deductions from the gross total income in respect of deductions under section 80C, 80CCC, 80CCD, 80E, 80G, 80GGC etc. to compute net taxable income.
5. Compute tax payable on net taxable income after claiming TDS.
6. Login to Income Tax India E-filing portal.
7. File Income Tax Return and validate return through Aadhar OTP or EVC using bank account or demat account.
8. Download the copy of Income Tax Return so filed.
9. The IT office will process the Income Tax Return after validation and send intimation of return processed

Read Also: How to file income tax return online step by step

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