As per the new Union Budget 2023, you can file your tax under both old and new tax regimes. The guidelines have changed considerably, making the process even more detailed. Rather than hiring a professional tax consultant and increasing your financial burden, you may use an online income tax calculator to know your tax obligations. Since proper planning is essential to achieving your financial goals, this tool lets you understand your tax payments and saving options under both regimes. In this blog, we will explore more about the income tax calculator and the benefits of using an online tax calculator.
- What is the Income Tax Calculator?
- Benefits of Using an Online Income Tax Calculator
- Conclusion
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The Indian government imposes income tax on all salaried employees, self-employed professionals, and entrepreneurs. The revenue earned goes towards the benefit of citizens, funding public services, upgradation and maintenance of public properties, etc. Whether you are an individual or a business taxpayer, an income tax calculator gives a comprehensive overview of the tax obligations so you can plan accordingly.
What is the Income Tax Calculator?
An online tax calculator is a free-to-use tool that helps calculate the income tax you must pay to the government. To get the most accurate results, you must enter your age group, annual income from all sources, and tax-saving provisions under Section 80C of the Income Tax Act, 1961. Based on this information, the calculator gives brief information about your tax obligations to the government. The best time to use a calculator is at the beginning of a fiscal year to understand your tax liabilities for the upcoming year and make investments accordingly. With this information, you can invest in the right avenues and save money to minimise your tax deduction for the year.
Benefits of Using an Online Income Tax Calculator
Using an online tax calculator has numerous benefits. Most importantly, you can calculate your tax obligations without any chance of errors while considering the technicalities involved. Based on accurate information entered in the calculator, you can get a clear idea of your income tax details and plan your payment as and when required. Tax calculators on reputable platforms are automatically updated according to the latest norms, enabling the process completion successfully.
These are some of the major benefits you can enjoy:
Accuracy
The in-built features of an income tax calculator make the entire process nearly accurate. The conventional method of calculating the taxes on paper is error-prone. Online tax calculators have advanced features to highlight any discrepancies or errors automatically. The tool also gives a better idea of the entire process in general. To summarise, an online calculator can eliminate the chance of human error immediately.
Speed and Convenience
An online income tax calculator eliminates the need to decide on a particular place and time to calculate your taxes. You can check online from anywhere and anytime. It also allows calculating the taxes quickly as opposed to conventional, time-consuming methods.
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Online Receipt
Once you complete your income tax calculation online, you will receive a confirmation message on your registered email address. It is the best way to confirm the results and compare them afterwards.
Data Privacy
If you calculate your income tax on paper, there is a high chance that it may fall into the wrong hands, and a fraudster may misuse it. The question of confidentiality remains dominant regarding your financial information and documents. An online tax calculator eliminates the issue, as it keeps your financial data confidential without making it accessible to anyone. That means you can be 100% sure of your data security.
Ease of Use
An income tax calculator is a free, easy-to-use tool that helps compute your income tax obligations to the government. You just need to enter a few details like your personal, financial, and income details to get an accurate estimate.
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Improved Expense Management in Advance
After calculating your tax using an online calculator, you get an accurate estimate of your tax payments. Since the tool helps plan your income tax obligations in advance, you can concentrate on managing your other financial requirements and expenses effectively. You can also invest your money in the correct tax-saving instruments to minimise your tax amount and save money.
Better Financial Planning
Tax planning is complicated and involves a plethora of intricacies. There are several tax-saving instruments under the provisions of Section 80C that most Indians are not familiar with, such as mutual funds, fixed deposits, loans, ELSS, PPF, etc. By knowing your tax liabilities, you can better plan your finances and invest in these instruments to maximise the tax benefits. You can decide which instruments provide the maximum tax-saving opportunities.
Understanding the Factors Affecting Your Taxes
Apart from calculating the taxes, platforms offering online tax calculators also provide educational value you can use to minimise your tax obligations and maximise your financial benefit. After calculating your tax payments, you can identify the factors affecting your taxable income the most. Accordingly, you can plan your tax savings and approach the right way to save money.
Conclusion
Calculating your tax obligations for the current financial year sometimes becomes a hassle without proper knowledge and professional help. Even if you are aware of the calculation methods, manual calculations are error-prone and time-consuming. That is where the role of an online tax calculator comes in. It gives conclusive and accurate information about your tax payments in minutes with just a few clicks. However, double-check the information you enter and provide the correct details to get the exact results.
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