Excel based Income Tax Calculator for FY 2020-21–AY 2021-22
Budget 2020, bring two tax regimes, somehow benefit certain income taxpayers and drag additional tax from certain taxpayers. From the middle-class taxpayers, the choice is yours. This excel-based Income tax calculator can be used for computing income tax on income from salary, pension, gifts, fixed deposit, and bank interest and you will get the result accordingly to your tax regime selection.
Highlights of Changes in FY 2020-21 in Income Tax
- A new direct tax dispute settlement under ‘Vivad se Vishwaas Scheme’ is introduced from FY2020-21. No penalty will be charged if taxpayers pay by March 31, 2020. Here, only the disputed tax amount has to be paid.
- Under Section 80EEA additional period of 1 year is extended for taking benefit of an additional INR 1.5 Lakhs deduction. This benefit is not permitted if you opt for the new tax regime.
- Dividend Distribution Tax (DDT) is withdrawn.
- If you opt for New Tax regime LTA, HRA, conveyance, Other special allowances [Section 10(14)], Standard deduction, Interest on housing loan (Section 24), Chapter VI-A deduction (80C,80D, 80E and so on) (Except Section 80CCD(2) and 80JJA) are not permitted.
Income Tax Slabs for AY – (2021-22) FY – (2020-21)
Tax slab for Men up to 60 years of age.
Tax slab for Women up to 60 years of age.
Tax slab for Senior Citizen aged above 60 years.
Old Tax Regime vs New Tax Regime
The question is whether the old tax regime is better than a new tax regime for the common man, any change in tax slab directly or indirectly impact the common man, so it is very important to understand the advantages and disadvantage of your choice.
whether a taxpayer can pick and choose between the two tax regimes every financial year as per his/her convenience and income for that year. The answer to this question is, yes you can.
Which Tax Regime is better?
Some of the case studies at the different scenario’s for the salaried individual at different salary levels under the current tax regime and the new proposed tax regime.
Scenario A – What If a salaried employee not claiming any deduction.
Looking at the above case New Tax regime looks attractive but “If the salaried individual claim deductions under section 80C, 80D, HRA exemption, LTA exemption and deduction of interest paid on housing loan taken for self-occupied property up to permissible limits, The selection criteria will change”.
Scenario B -In case Salaried individuals claiming most commonly deduction/exemptions, considering INR 1.5 Lakhs u/s 80C and INR 25,000 u/s 80D.
It is very clear in case all kinds of deduction/exemption change the complete scenario of the tax system for the individual. Only in the case above INR 15 Lakhs + the taxpayer will get benefited from the new regime.
Advantages & Disadvantage If you opt for Old regime
- You can take all the exemption and deductions benefits as usual.
- If you are under higher tax slab Old regime is FAR better option. It will allow you to deduct all exemption.
- Old not only save Tax but also enhance your wealth corpus
- Income above INR 5 Lakhs bound you to pay tax in New regime, but under Old regime, all deductions and exemptions filter your taxable income and drag you out from tax.
- Old Regime conditionally force to use exemptions to save tax, otherwise, you have to pay Tax.
- There are lots of sections which required additional tax knowledge which is bit difficult for other stream people.
This article is based on limited available information, if required, the content will be edited/updated.
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Click Here ITR-1 Calculator FY-2020-21 [AY-2021-22] (income tax calculator AY 2021-22 excel) and download income tax calculation excel sheet for salaried individuals.