While calculating the gross income of a person or firm, the deductible incomes must be excluded from it such as some savings/investments, education fees of children, any charity or LIC premium, etc. It is not an easy task for everyone to extract his/her exact gross income for the calculation of income tax.
For this purpose of calculation, the income tax calculator is invented. It is an uncomplicated method to calculate the income assessable for tax, also it does present you the amount you have to pay as tax or refund if any, according to the tax authorities.
The income tax calculator is provided by IRC, which is a table in which you have to fill your income details accordingly. You have to fill details of your income, savings, fixed deposits, interest received, charity, etc. The income tax return calculator will automatically calculate the taxable income by adding the incomes and savings and deducting the rebates and allowances.
The income tax calculator will further show you the tax liability payable and refund receivable if any. The income tax calculator keeps itself updated thus it is enabled in calculating your income with an accurate percentage of tax. With the help of this calculator, you will easily come to know if you have overpaid the tax or there is any pending liability due from your side.
How much tax return calculator is reliable?
The tax return calculators are reliable to use for your tax calculation, all you need to check upon is your input figures. The only reason you will get an incorrect result is if you insert the wrong figures into it. Otherwise, there is no chance of mistake by the tax calculator. The result may also be incorrect if you mistakenly put the figures into the wrong columns. So all you got to do is put the numbers accurately into the chart to get the best result from the tax calculator.
How to use Income tax calculator for tax and tax refund?
It is quite simple to use as the government wants everyone to use it with ease so that everyone could link with the income tax authorities. In the beginning, you will be asked a simple question such as you are individual or firm, single or married, your age, for which year you want to calculate tax, etc. Then there will be different slabs for each income type such as salaried, income from interest, rental income, interest paid on loan, etc.
Then there will be a window that allows you to fill deductions such as donations, interest on the educational loan, basic deductions, etc. After filling all these columns carefully, you have to select the calculate tab to get the results, and here you go. The process is hardly 5 minutes long if you keep your income and other relatable details along with you. It doesn’t cost you anything but keep it in your mind that you must have the basic knowledge regarding income tax slabs and deductions granted.