Paying income tax is mandatory in India if an individual has an annual earning that crosses a pre-set threshold. However, calculating income tax on a housing loan manually can be a challenging affair at the end of a fiscal year. Thus, opting for an income tax calculator 2022 can significantly ease this calculation and provide taxpayers with accurate results. Although the income tax calculator is a significantly easy tool to use, one should learn the process of utilising it to his/her benefit.
Steps to Use Income Tax Calculator
The steps to use an online income tax calculator 2022 are –
- Step 1: Visit the official website of the Income Tax Department of India
- Step 2: Navigate to the income tax calculator
- Step 3: Enter assessment year, and taxpayer’s name, gender, and whether he/she is a senior citizen
- Step 4: Enter the residential status
- Step 5: Enter income from salary and every other sources
- Step 6: Provide the deductions, including TDS, STCG, LTCG, and others
- Step 7: Click on the ‘calculate’ option and get the required information
Thus, before paying tax, it is beneficial to know the income tax categories in India. For the ease of taxpayers, the classes of income tax slabs are provided below.
Categories of Income Tax Slabs
The income tax slabs for salaried and self-employed citizens are categorised into 3 primary sections –
- Citizens below 60 years of age.
- Senior citizens below 60 and 80 years of age.
- Citizens above 80 years of age.
Irrespective of the tax slab one opts for; prospective homebuyers can get a deduction on income tax against their loan repayment.
Income Tax Saving on Home Loan
Borrowers can avail of a few home loan tax benefits under certain income tax acts. For example, under Section 80C, a beneficiary can claim a maximum tax deduction of Rs.1.5 lakh on the principal component of a housing loan.
Apart from it, under Section 24, borrowers can enjoy deductions of Rs.2 lakh on housing loan interest amount payable of a home loan for a self-occupied property.
Also, under Section 80EE, first-time buyers can enjoy tax saving on home loan of Rs.50000. But, borrowers must remember that this is above the Rs.2 lakh tax benefit under Section 24.
However, apart from tax benefits, there are additional reasons to opt for home loan. The details of the benefits of a housing loan are provided below.
- Ease of repayment
Beneficiaries of a home loan can opt for a loan for a longer tenor, usually up to 20 years; this fetches an affordable EMI for them. However, a counter argument to keep in mind here is that, a longer tenor will result in higher repayment burden. Borrowers can use a home loan calculators to get a better understanding.
Apart from it, borrowers can also prepay the loan amount and have the flexibility to foreclose it. This can help them to save on home loan repayment.
- Lower interest rate
The Reserve Bank of India fixes the current repo rate at 4%; as a result of this lowering of the current repo rate, financial institutions are offering much lower home loan interest rates. This made owning a house much more affordable than earlier.
Additionally, prospective borrowers can opt for a home loan with floating or fixed interest rates. With the current market condition, individuals can choose anyone as per their convenience for the home loan tenor.
- Fast credit appreciate
With the increasing demand for real estate in India, a property can turn highly lucrative in the long run. Also, the construction cost of a property increases every day; thus, it is better to opt for early as this is an investment that can only appreciate.
- Pre-approved offers
Best home loan providers extend pre-approved offers that simplify and expedite the loan application process. Such offers are available on a range of financial products like loans against property, home loans, etc. Intending borrowers can enter their name and contact number to check their pre-approved offers.
Thus, before filing for the income tax return, experts advise taking the assistance of an income tax calculator 2022 to get a swift and precise result. Also, check the income tax slabs and understand the tax exemption in detail for better savings.