Income Tax Calculation 2022-23 Excel Calculator [VIDEO]

Income Tax Calculation 2022-23 will be done in same way compared to 2021-22. There were no changes made in Budget 2022 as far as Income Tax Calculation FY 2022-23 is concerned. Many queries we will solve in this article such as how to calculate income Tax in FY 2022-23, what are the various Tax slabs and Rebate available, Old Tax regime vs New Tax regime, which one to choose between old slabs and new slab rates and how you can save income tax in FY 2022-23. Also you will find the income tax excel calculator at the bottom of this article.

Based on your income you will have to pay income tax in FY 2022-23. You will have to check in which slab rates you belong. You also have the option to choose between Old Tax regime and New Tax Regime. Old tax regime has higher slab rates with the option to claim investment deductions so that you can save income tax. New tax regime has reduced tax slab rates without the option to claim deduction options. Standard deduction of Rs. 50,000 is still applicable if you are a salaried employee or pensioner, but only while you choose Old tax regime (not available in new tax regime). Tax rebate u/s 87A is applicable when your taxable income is below Rs. 5 lacs in a financial year, in which case you don’t have to pay any taxes in both regimes.

Income Tax Calculation 2022-23 Excel Calculator Video

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Above video helps you to understand how you can use the excel calculator to calculate your income tax for FY 2022-23 (AY 2023-24) and see slab wise details. Also, it helps you choose between Old or New Tax regime in order to pay low taxes.

Overview

• In FY 2022-23, there are 2 tax regimes – Old and New
• When you have certain income, you have to pay income tax on your income you generate in a FY (Financial Year), which is between April month to March month of next year. April 2022 to March 2023 in this case
• During this period, you need to pay income tax on total income you earn in the FY
• Now, based on the 2 tax regimes, you will reach 2 figures of income tax. You can plan and decide which one you should choose to pay less income tax.
• Old Tax Regime – This regime has slab rates that are unchanged from a long time. It allows you to some investment options to help you save income tax by deducting the investment amounts under various sections
• New Tax Regime – This regime was introduced in Budget 2020 and has slightly reduced tax slab rates. This regime was introduced to help you lower the burden of income tax you were paying in previous years using Old tax regime. But new tax regime does not allow any deductions to be claimed if you make any investments, to save more income tax. You pay tax on entire amount you earn in FY.

Now since you have understood some basics about 2 tax regimes in India, let’s see the slab rates in both these regimes.

Old vs New Tax Slab Rates

Below is the table showing Old slab rates and new slab rates belonging to old and new tax regimes respectively:

As we can see in above table, if someone’s income is Rs. 8 Lakhs in a Financial Year, he/she falls under 15% Income Tax bracket based on New Tax Slabs whereas he/she falls under 20% Income Tax Bracket based on Old Tax Slabs.

Now, it depends on you which Tax Slab Rates you want to choose to calculate your Income Tax for FY 2021-22. The only point you need to remember is that you need to forgo all Investment options or Deductions in case you want to opt for New Tax Slab Rates. This means you cannot claim Deductions under any Section, if opting for New Tax Slab Rates.

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How to Calculate Income Tax Examples

Let’s take example of income = Rs. 8 Lacs in FY (April 2022-March 2023)

Tax Calculation with Old Slab Rates

Since income = Rs. 8 Lacs, based on old slab rates – you pay 0% tax on income between Rs. 0 to Rs. 2.5 Lacs, 5% tax on income between Rs. 2.5 Lacs to Rs. 5 Lacs and 20% tax on income between Rs. 5 Lacs to Rs. 8 Lacs. So below is the calculation:

0% Tax (Rs. 0 – Rs. 2.5 Lacs) = Rs. 0
5% Tax (Rs. 2.5 Lacs to Rs. 5 Lacs) = Rs. 12,500 (on Rs. 2.5 Lacs difference)
20% Tax (Rs. 5 Lacs to Rs. 8 Lacs) = Rs. 60,000 (on Rs. 3 Lacs difference)

This makes your intermediate tax as Rs. 72,500. Now an additional 4% cess is applicable on this amount which is Rs. 2,900, which makes your total income tax based on Old Tax Regime = Rs. 75,400

Let us now see income tax calculation using New Tax Regime

Tax Calculation with New Slab Rates

With same example of income = Rs. 8 Lacs, based on new slab rates – you pay 0% tax on income between Rs. 0 to Rs. 2.5 Lacs, 5% tax on income between Rs. 2.5 Lacs to Rs. 5 Lacs, 10% tax on income between Rs. 5 Lacs to Rs. 7.5 Lacs and 15% tax on income between Rs. 7.5 Lacs to Rs. 8 Lacs. So below is the calculation:

0% Tax (Rs. 0 – Rs. 2.5 Lacs) = Rs. 0
5% Tax (Rs. 2.5 Lacs to Rs. 5 Lacs) = Rs. 12,500 (on Rs. 2.5 Lacs difference)
10% Tax (Rs. 5 Lacs to Rs. 7.5 Lacs) = Rs. 25,000 (on Rs. 3 Lacs difference)
15% Tax (Rs. 7.5 Lacs to Rs. 8 Lacs) = Rs. 7,500 (on Rs. 3 Lacs difference)

This makes your intermediate tax as Rs. 45,000. Now an additional 4% cess is applicable on this amount which is Rs. 1,800, which makes your total income tax based on New Tax Regime = Rs. 46,800.

In this case, you pay less income tax with new tax regime. We have not considered standard deduction of Rs. 50,000 in our example, which will be applicable on Old tax regime if you are salaried employee or pensioner.

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What is Standard Deduction

Standard Deduction is a flat deduction of Rs. 50,000 that is applicable if you are a salaried employee or pensioner. Remember that you will be allowed to use this deduction only when you choose Old Tax Regime and not with New Tax Regime.

So using above example, below is the income tax calculation if we mention standard deduction of Rs. 50,000 in investments section:

As seen above, standard deduction is only applied in old tax regime thus reducing the taxable income to Rs. 7.5 Lacs and accordingly income tax is reduced. This is one of the ways to save income tax when you opt for old tax regime.

How to Save Income Tax

As seen above, standard deduction helps you save income tax based on old tax regime. Do we have any other options to save more Income Tax? Yes, we do.

But remember that these options are applicable only when you choose old tax regime to calculate and save income tax. Below are some of the options you can use to save income tax:

Section 80C

We have below investment options to save income tax under Section 80C, maximum Rs. 1.5 Lacs can be claimed in this section:

• Employee Provident Fund
• Public Provident Fund
• Life Insurance Premiums
• 5 Year Fixed Deposits
• Equity Linked Saving Schemes, etc.

Section 80CCD(1B)

This includes NPS (National Pension Scheme) and allows maximum of Rs. 50,000 to be claimed in a financial year to save income tax.

Section 10(13A)

This includes HRA (House rent allowance) that you receive in your salary. This will be allowed to be claimed if you stay in rented accommodation. Know more about HRA Exemption calculation here.

Section 80D

This includes medical insurance for which maximum amount is Rs. 25,000 for non-senior citizens and Rs. 50,000 for senior citizens. It also allows to claim deduction for your parent’s medical insurance as well.

More options to save income tax in this video:

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How to Choose between Old or New Tax Regime

To answer this question, it depends on person to person. Every individual is having different incomes in a Financial Year.

As we saw in above Income Tax slab rates, if your income is in the range of Rs. 5 Lacs to Rs. 12 Lacs, you can opt for Old Income Tax Slab rate, make some Tax saving investments and Save Income Tax.

But if your income is above Rs. 12 Lacs, there is not much option to save maximum income tax. Even after making investments with maximum limits in different sections, you’ll still be paying more taxes with old tax regime compared to new tax regime.

Below is the graph showing the comparison of income vs income tax:

As seen above, green line depicts income tax with new tax regime, which is low when your income moves greater than 12 Lacs. Blue line (old regime with investments) is still above green line which shows that even after investments you’ll more more income tax with old slab rates compared to new slab rates.

So you should make your investments according to your total income and based on the calculations of income tax in both regimes. Choose the one that helps you pay less income tax.

Tax Rebate u/s 87A

Another important point is, your Tax Liability (Income Tax) becomes Rs. 0 if your Net Taxable Income is below Rs. 5 Lacs.

Many should take advantage of this Rebate that we get under Section 87A which helps us in reducing our Tax Liability. In case your Net Taxable Income is below Rs. 5 Lacs, you need not have to pay any Income Tax.

Example

Let’s say your Net Taxable Income equals Rs. 5 Lacs in FY 2021-22

Based on Old and New Tax Slab Rates, you are liable to pay Rs. 12,500 as Income Tax based on your Net Taxable Income.

But we also have Tax Rebate u/s 87A which provides us a maximum rebate of Rs. 12,500, thus making our Income Tax = Rs. 0.

Note: This Rebate is applicable with both Old and New Tax Slab Rates

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Income Tax Calculator Android App

I have made a Free Android App “FinCalC” that will help you to calculate income tax and see slab wise details. You can easily calculate your income tax on your mobile device and plan your investments accordingly. Below are some of the features of Android App:

• Calculate Income Tax for new FY 2022-23 and previous FY 2021-22
• Enter estimated Investments to check income tax with Old and New Tax Regime
• Save income tax details and track regularly
• Know how much to invest more to save income tax
• More calculators including PPF, SIP returns, Savings account interest and lot more

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Check out More online Calculators here including Income Tax, PPF, SIP, Home Loan Calculator and many more..

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Frequently Asked Questions

1. How do I calculate my Income Tax in FY 2022-23?

Ans. You have the option of choosing between Old Slab Rates and New Slab Rates in order to calculate your Income Tax in FY 2022-23. You can choose based on your income and investments you make to accordingly calculate income tax in FY 2022-23

2. Where can I get Income Tax Calculator for FY 2022-23?

Ans. You can download the Income Tax Calculator Android App to calculate and compare your Income Tax from here – Click Here to download Income Tax Calculator App

3. How to Save Income Tax in FY 2022-23?

Ans. You can save income tax in FY 2022-23 by opting for Old Income Tax Slab Rates and making required Tax saving investments. You can watch this video to know what are the Tax Saving instruments you can use to Save Income Tax – CLICK HERE

4. Can I save Income Tax using New Income Tax Slab Rates?

Ans. No, you cannot claim any deductions for your investments you make using New Income Tax Slab Rates for FY 2022-23. So your gross income becomes your Net Taxable Income to calculate your Income Tax.

5. Why Income Tax is Rs. 0 on Income up to Rs. 5 Lacs?

Ans. In case your Net Taxable Income is up to Rs. 5 Lacs, you get Tax Rebate of maximum Rs. 12,500 under Section 87a which cancels your income tax of Rs. 12,500 on income of Rs. 5 Lacs, thus making your Total Income Tax = Rs. 0. This Tax Rebate u/s 87a is applicable to both Old and New Slab Rates.

6. Is Tax Rebate u/s 87a applicable to both old and new slab rates?

Ans. Yes.

7. What is the standard deduction amount for FY 2022-23?

Ans. Standard Deduction applicable for FY 2022-23 is Rs. 50,000. But this is applicable only when you choose Old Income Tax Slab Rates to calculate your Income Tax. Not on New Income Tax Slab Rates.

8. Is interest earned in Savings Account Taxable?

Ans. Yes. But you can claim maximum of Rs. 10,000 in FY 2022-23 under Section 80TTA for interest earned in your savings account using old tax slab rates. Again, this is not applicable in New Tax Slab Rates. Any amount above Rs. 10,000 as interest in your savings account will be taxable even using old tax slab rates.

9. What are the new Tax Slab Rates in FY 2022-23?

Ans. There were no changes made in Budget 2022 regarding the Income Tax Slab Rates. So the old and new slab rates that were applicable in FY 2021-22 are still applicable in FY 2022-23 and you have the option of choosing between these slab rates to calculate and pay your Income Tax. To check your Income Tax Download my Income Tax Calculator App.

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