This post will be very helpful to you if this is your first time filing your income taxes. Your taxable income and the amount of tax due after the computation is finished will be determined today. Additionally, how to use the various section 80C schemes and other tax benefits in the computation.

Regardless of whether their income is taxable or not, everyone should file income taxes. The following method can be quite helpful if you are similarly confused about how income taxes are calculated.

How to calculate tax?

Add all income

First and foremost, you need to know how much money you make annually and where it comes from.

Include these in your income-

• Salary
• House Property
• being in business or profession
• Profit
• Capital Gains
• Income from other sources

In this way you will get GTI i.e. Gross Total Income.

All exemptions are deducted

GTI, or gross total income, must now be added. Take all of the deductions out of the income you have added for this. Reduce that amount whenever you are receiving tax benefits from these exemptions.

Like many of you, you may have applied for these schemes in order to receive section 80-C tax benefits. Sections 80G, 80D, 80TTA, and so forth are so covered. You can determine your taxable income by deducting all of these expenses.

Include surcharges

You must now determine where this taxable income is located inside the tax slab. You will also need to provide surcharges in addition to this. 

Deduct prepaid taxes

Lastly, prepayment taxes such as TDS, Advance Tax, and SAT must be subtracted. In this manner, the amount of your refund or taxable income will show up. This will make it simple for you to figure out your income tax.

Tell us now whatever papers you require in order to compute taxes. 

Which documents are necessary

• Get the paperwork listed below if you need to file an ITR.
• Form 16A or 26AS will be needed.
• In order to claim HRA, you will need a rent agreement if you pay rent.
• Additionally, you will need to provide documentation of your tax deduction.
• You will need to submit a foreign bank account statement if you get money from overseas.

• Additionally, documentation of any prior ITR filings will be needed.
• You will also need to submit a pay stub as proof of income.
• The income tax website’s auto tax calculation feature allows you to verify your taxes today.

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