1. What is the Income Tax Formula?

The income tax formula calculates your projected tax liability for Assessment Year 2024-25 based on your income, applicable tax rate, and eligible deductions.

2. How Does the Calculator Work?

The calculator uses the income tax equation:

Where:

• \( Income \) — Your total taxable income in INR
• \( Rate \) — Applicable tax rate as a decimal (e.g., 0.3 for 30%)
• \( Deductions \) — All eligible deductions in INR

Explanation: The equation multiplies your income by the tax rate and then subtracts any eligible deductions to arrive at your tax liability.

3. Importance of Tax Calculation

Details: Accurate tax projection helps in financial planning, ensuring you set aside appropriate funds for tax payments and take advantage of all eligible deductions.

4. Using the Calculator

Tips: Enter income in INR, rate as a decimal (e.g., 0.3 for 30%), and deductions in INR. All values must be valid (non-negative numbers).

5. Frequently Asked Questions (FAQ)

Q1: What income should I include?
A: Include all taxable income from salary, business, capital gains, house property, and other sources as per IT Act.

Q2: How do I determine my tax rate?
A: Check the latest income tax slabs for AY 2024-25 based on your income level and age.

Q3: What deductions can I claim?
A: Common deductions include 80C, 80D, HRA, standard deduction, and other chapter VI-A deductions.

Q4: Does this calculator account for cess and surcharge?
A: No, this provides a basic calculation. Add 4% health and education cess to the result for complete liability.

Q5: Is this applicable for all taxpayer categories?
A: This basic formula applies to individuals and HUFs. Companies and firms have different tax calculations.