1. What is the Income Tax Formula?

The income tax formula calculates projected tax liability for Assessment Year 2025-26 based on income, tax rate, and applicable deductions. This helps in financial planning and tax estimation.

2. How Does the Calculator Work?

The calculator uses the income tax equation:

Where:

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

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

3. Importance of Tax Calculation

Details: Accurate tax estimation is crucial for financial planning, budgeting, and ensuring compliance with tax regulations for Assessment Year 2025-26.

4. Using the Calculator

Tips: Enter income in INR, tax rate as 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 be included?
A: Include all taxable income from salary, business, capital gains, and other sources as per Income Tax Act provisions.

Q2: How to determine the correct tax rate?
A: Refer to the latest income tax slabs for AY 2025-26 published by the Income Tax Department.

Q3: What deductions can be included?
A: Include all eligible deductions under sections like 80C, 80D, HRA, and other applicable sections.

Q4: Does this calculator account for cess and surcharge?
A: No, this provides basic tax calculation. Additional cess and surcharges may apply based on income level.

Q5: Is this calculation final for tax filing?
A: This is for estimation only. Consult a tax professional for accurate tax computation and filing.