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FinanceEverything you Need to know about Income Tax Calculator for FY 2022-23

Everything you Need to know about Income Tax Calculator for FY 2022-23

Individuals can use an income tax calculator to determine the amount of tax they must pay yearly to the government. An income tax is a tax levied by the Government of India on individuals or businesses on their annual income. In India, the income tax is administered by the Central Board of Direct Taxes (CBDT) under the Ministry of Finance. 

What is an income tax calculator?

An income tax calculator is an online tool used to calculate income tax. Individuals and businesses can use an online income tax calculator to determine the total sum of the tax amount they need to pay. Factors like income, expenses, investments, age, and interest paid towards a home loan are some factors considered while using this income tax online calculator. Tax calculation is done per the budget proposed by the Union and relevant tax laws.  

How to use an online income tax calculator?

By following the six steps mentioned below, individuals can use an online income tax calculator:

  • Select the financial year for when you wish to calculate the tax.
  • Choose your age group.
  • Taxable income amount, excluding HTA, LTA, and others.
  • Enter details like rental income, interest income, and other relevant information.
  • Enter investments under Sections 80D, 80G, 80C, 80E, and 80TTA. 
  • Click the ‘Calculate’ button to get the total taxable amount. 
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How to calculate income tax benefits for FY 2022-23 on a home loan?

Borrowers of home loan can follow the below-mentioned steps to calculate amount of income tax deduction on home loan:

  • Choose the financial year during which you took the loan. 
  • Select your gender.
  •  Enter your annual income.
  • Enter the interest paid on a home loan.
  • Mention the principal repaid on a home loan.
  • Click on the submit button to get accurate results.

On completion of the above steps, borrowers will be able to get the amount of the total income tax benefit and income tax payable before and after the home loan. 

Most lenders or financial institutions offer pre-approved offers to their existing customers. These offers simplify and accelerate the overall loan application process. They are available on various products including home loans, loans against property, etc. Borrowers simply have to provide their name and contact details to check their pre-approved offers. 

Benefits of using an income tax calculator

Borrowers can experience the following benefits by using an income tax calculator:

  • Fast and accurate results

Individuals can get fast and accurate results using this online tool. An online income tax calculator works on algorithms that enable it to offer accurate and speedy results.

  • Unlimited and free usage

This online tool is available on every lender or financial institution’s website. Borrowers of housing loans can use them for free as often as they want.  

Income tax benefits on home loan

Potential borrowers seeking a housing loan can get the following home loan tax benefits:

  • Deduction on housing loan interest rate

Under Section 24, borrowers can get a maximum deduction of up to Rs. 2 Lakhs on the interest portion of the EMI. 

  • Deduction on home loan interest rate during the pre-construction period

As per the Income Tax Act, borrowers can get deductions on the home loan interest rate during the pre-construction period for an amount of up to Rs. 2 Lakhs. 

  • Deduction on principal repayment

Under Section 80C of the Income Tax Act, home loan borrowers can get a deduction on the principal repayment amount for up to Rs. 1.5 Lakhs.

  • Deduction on registration charges and stamp duty

Similarly, borrowers can get a deduction on stamp duty and registration charges under Section 80C, up to an amount of Rs. 1.5 lakhs.  

  • Deduction under Section 80EE

Considering certain factors under Section 80EE, borrowers can get an additional deduction of Rs.50,000. 

  • Deduction under Section 80EEA

Borrowers can also claim further deductions under Section 80EEA for a maximum amount of up to Rs. 1.5 Lakhs. 

  • Deduction on a joint home loan

For a joint home loan, each holder can take a loan of up to Rs. 2 Lakhs each. Moreover, under Section 80C, each borrower can even get a deduction of Rs. 1.5 Lakhs. However, both parties should be the property’s co-owners. 

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Home loan applicants can also get benefits apart from tax deduction. For instance, home loan borrowers can avail credit at low interest rates, and repay over a longer tenor. Borrowers can estimate the tax benefits on taking a home loan using an income tax calculator.

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