Every earning individual is liable to pay income tax in India whether they receive their income from salary, capital gain investments, house properties, business/ profession, or other sources. However, certain income types are exempt from tax in India. These include:

• Money received from a provident fund.
• Any educational scholarship or award funds received.
• Agricultural income provided it is lesser than ₹5,000 in a year.
• Any gratuities received by a government employee due to death or retirement.
• Up to ten months of leave salary for a government or private sector employee at the time of retirement.
• Other non-taxable income specified under the applicable provisions of the Income Tax Act, 1961.

The maximum non-taxable income limit is ₹2,50,000 per annum. The non-taxable income limit is the same in the new and old tax regime and is applicable for persons up to 60 years of age and Hindu Undivided Family (HUF).

The non-taxable income limit for senior citizens above 60 years and up to 80 years of age is ₹3,00,000, and for super senior citizens above 80 years of age is ₹5,00,000.

However, even individuals earning up to ₹5,00,000 in a year are eligible to claim tax rebates/ refunds after filing their income tax returns, ultimately making their tax liability also nil.

According to the Income Tax Act, 1961, every earning person has to pay income tax to the government. The term person includes salaried individuals, firms, businesses, companies, freelancers, self-employed professionals, and other bodies of persons.

The tax owed by different persons depends on the tax bracket they fall under and the tax slabs rolled out by the government. The tax rates differ for individuals below 60 years of age, between 60 and 80 years (senior citizens), and above 80 years (super senior citizens). To calculate how much tax you owe, you must assess various earnings, exemptions, deductions, and other factors.

In India, the fiscal year starts on the 1st of April and finishes on the 31st of March next year. However, the government and income tax department always extend the income tax filing dates to provide time and relief to the taxpayers. For example, in FY 2021, the tax filing deadline was extended to the 31st of December. You can keep up with the dates on the income tax portal.

A deduction is the reduction of an amount from the sum of gross total income under different income heads. On the other hand, income exemption means the entire income itself is exempt from tax. However, only some sources of income are exempt from tax, like agricultural income up to a certain amount, for instance. Income tax deductions are a specific percentage of money claimable on the gross total income.

The Union Budget 2022 did not bring any major changes in the income tax slabs for the financial year 2022-23. Accordingly, there is no direct lowering of tax rates for individual taxpayers, but there is a new provision that will enable taxpayers to update their past returns within two years from the end of an assessment year.

There are two core differences between the tax slabs of the new tax regime and the old tax regime. The first difference is in the reduction of income tax payable for different income limits. The second is the removal of up to 70 deductions in the new tax regime. Here is a comparison of the tax slabs for individuals below 60 years of age.

The new tax regime reduced the liability of tax payments and removed several deductions and exemptions that benefited taxpayers. It removed up to 70 deductions and exemptions. These include:

• House rent allowance
• Leave travel allowance
• Child education allowance
• Professional tax deduction
• Interest/ principal on a home loan
• Payment towards life insurance premiums
• Payment towards health insurance policy premiums

The new tax regime introduced in 2020 reduces the tax liability of individual taxpayers. The new tax slab rates have lowered the percentage of tax payable for different income limits, which can be beneficial. However, it has also removed up to 70 profitable tax deductions and exemptions in force under the old tax regime. There is no final judgement on which tax regime is better, and taxpayers will have to compare the two tax regimes and see which one works best for them.

Yes, investing in pension funds and insurance plans will be eligible for tax deductions under the relevant provisions of the Income Tax Act, 1961. However, they are not available under the new tax regime. But, on the other hand, you can get it under the old tax regime.

To use an income tax return calculator, you first need to choose the financial year for which you are filing the income tax returns. Then, pick your taxpayer category – male, female, or senior citizen as the tax slabs for individuals below and above 60 years of age differs. Add your income details, including any:

• Income you receive from salary
• Income you receive from house property
• Income you receive from short-term and long-term capital gains
• Any other income

Add any deductions you can claim (if you are using the income tax calculator old regime) and submit any other relevant details to calculate your tax liability.