Income tax Calculator 2021-22 Excel File

Income tax Calculator 2021-22 Excel File. Union Finance Minister Nirmala Sitharaman will present the 2022 Union Budget on Tuesday (February 1). One of the most keenly awaited announcements in the Union Budget every year is related to personal taxation. In every budget, income tax rates and slabs are reviewed. However, the income tax slabs have not been changed since 2014. Will the salaried class get relief on income tax this year? Here’s what the expected figures say.Also Read - Budget 2022: What Does Fintech Industry Expect From Upcoming Union Budget? Know What Experts Say

The basic personal tax exemption limit was last revised in 2014. Presenting the first budget of Prime Minister Narendra Modi-led government in 2014 the then Finance Minister Arun Jaitley raised the basic income tax exemption limit from Rs 2 lakh to Rs 2.5 lakh. For senior citizens, the exemption limit was increased from Rs 2.5 lakh to Rs 3 lakh. The basic exemption limits have not been changed since then. Also Read - Budget 2022: What Do Indian Railways Expect From Upcoming Budget?

Expected changes in income tax exemption slabs:

Some analysts feel that the finance minister may announce major relief to taxpayers.

Basic income tax exemption limit likely to be increased to Rs 3 lakh: The expected relief includes an increase in the basic exemption limit from Rs 2.5 lakh to Rs 3 lakh.

Tax slab for senior citizens likely to be increased to Rs 3.5 lakh: For senior citizens, it is likely to be increased to Rs 3.5 lakh from the present Rs 3 lakh.

Top income slab also expected to be increased: The top income slab is also likely to be revised upward from the existing Rs 15 lakh.

What do taxpayers want from Budget 2022?

According to a pre-budget survey conducted among different stakeholders by KPMG recently, the majority (64 per cent) of respondents expect an enhancement in the basic income tax exemption limit of Rs 2.5 lakh.

What are the current income tax rates, slabs?

Although FM Sitharaman has not changed tax slabs and rates, she introduced a new tax regime in 2020 Budget. Under the new tax regime, the tax rates are reduced for those willing to forego tax exemptions and deductions. The new tax regime remains optional for taxpayers. This means a taxpayer has the option to either stick to the old regime or choose the new one.

Income up to Rs 2.5 lakh exempt from taxation

Currently, income of up to Rs 2.5 lakh is exempt from taxation under both regimes.

5% income tax for Rs 2.5 to Rs 5 lakh

Income between Rs 2.5 to Rs 5 lakh is taxed at the rate of 5 per cent under the old as well as the new tax regime.

An individual with a net taxable income of up to Rs 5 lakh is allowed to avail tax rebate of up to Rs 12,500 under Section 87A in both the old as well as the new tax system. So effectively, the tax liability of individuals with income up to Rs 5 lakh is zero under both the tax regimes.

10% income tax for Rs 5 lakh to Rs 7.5 lakh

Personal income from Rs 5 lakh to Rs 7.5 lakh is taxed at a rate of 20 per cent under the old regime, while under the new regime the tax rate stands at 10 per cent.

20% income tax for Rs 7.5 lakh to Rs 10 lakh

Income between Rs 7.5 lakh to Rs 10 lakh is taxed at a rate of 20 per cent in the old regime, while in the new regime the tax rate stands at 15 per cent.

20% income tax for Rs 10 lakh and Rs 12.5 lakh

Under the old regime personal income above Rs 10 lakh is taxed at a rate of 30 per cent. However, under the new regime, there are three slabs above Rs 10 lakh. Personal income between Rs 10 lakh and Rs 12.5 lakh is taxed at a rate of 20 per cent under the new regime.

25% income tax for Rs 12.5 lakh to Rs 15 lakh

Income from Rs 12.5 lakh to Rs 15 lakh is taxed at 25 per cent.

30% income tax for above Rs 15 lakh

Income above Rs 15 lakh is taxed at a rate of 30 per cent.

The effective tax rate is much higher due to cess and surcharges.

The limit for deduction under Section 80C has also remained unchanged since 2014. In the 2014 budget, the 80C deduction limit was increased to Rs 1.5 lakh from Rs 1 lakh, while the deduction limits for interest on the home loan was increased to Rs 2 lakh from Rs 1.5 lakh.

Both these deductions remain unchanged since 2014. However, some additional deductions have been introduced in the subsequent budgets. In the 2015 budget, the government introduced an additional deduction of Rs 50,000 for contribution under the National Pension Scheme (NPS) under Section 80 CCD. The deduction limit on health insurance premiums was also increased from Rs 15,000 to Rs 25,000.

Major steps towards simplification and rationalisation of the income tax regime are also expected in this year’s budget.

Click here to download automatic excel file for year 2021-22

In the Budget 2020-21, around 70 exemptions and deductions of different nature were removed. The finance minister had announced that the “remaining exemptions and deductions will be reviewed and rationalised in the coming years with a view to further simplifying the tax system and lowering the tax rate.”

In the 2021-22 Budget the finance minister did not make any significant change in the income tax rates or slabs.