Senior Citizens: How to Calculate Income Tax FY 2021-22 [VIDEO]

If you want to know how to calculate income tax for senior citizens between age 60 to 79 years than you are at the right place.

Calculating Income tax for senior citizens is very simple with the help of Excel calculator, the link to which I have provided at the bottom of this article. But before calculating income tax, you should know various factors like Income tax slab rates for FY 2021-22, Tax rebate limit, Investment options available, Section 80TTB limit, select between old or new Slab Rates, etc. Let's see all of those one by one.

Watch this video to see how to calculate income tax FY 2021-22 for senior citizens in hindi:

WATCH: All Excel Calculators Videos

In this video I have shown you examples of Income Tax calculation for Senior citizens for FY 2021-22 with the help of examples.

Income Tax Slab Rates FY 2021-22:

• In Budget 2020, new Income Tax Slab Rates were introduced which are reduced Tax Slab Rates compared to Old Income Tax Slab Rates
• You will have the option to choose between old tax regime (higher tax rates) or new tax regime (lower rates)
• But with lower rates in new tax regime, there is a condition. You will not be able to claim any deduction against your investments in any of the Tax saving schemes
• You will also NOT have the option of Standard Deduction to help reduce your Income Tax if you choose new tax regime
• All the deduction options are still applicable if you choose old tax regime to calculate your income tax, but with higher rates compared to new tax regime

Old Tax Regime vs New Tax Regime for Senior Citizens FY 2021-22

As we can see above, Old tax regime have high tax rates (except for Income between Rs. 0 Lacs to Rs. 5 Lacs) compared to New tax regime.

The only thing you should remember while you select new tax regime is, you won't be able to claim any deductions from your investments.

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How to Calculate Income Tax:

Now, how do we calculate Income Tax using above slab rates? It depends on your Income

Using the Income Tax Excel Calculator, you can easily calculate your Income tax with the help of 3 inputs - Income, Investments & TDS

Income Tax Excel Calculator

Based on the Income Tax Slab Rates, your Income Tax will be calculated and you can easily choose between Old and New Tax Regime to lower your Income Tax.

Also Read: Senior Citizen Saving Scheme Interest Calculation

Deductions available to Senior Citizens:

• Important: You can claim Deductions only under Old Tax Regime. So you need to choose Old Tax Regime to calculate your Income Tax while claiming deductions. You can clearly identify this in our Income Tax Excel Calculator
• Section 80C: You can claim maximum of Rs. 1.5 Lacs in a FY to save your Income Tax under Old Tax Regime
• Section 80D: This belongs to Medical Insurance premiums that you pay in a FY which can be claimed under this section
• Section 80TTB: Savings Account interest that you get in a FY can b claimed under this section so you don't pay income tax on savings account interest, maximum Rs. 50,000 can be claimed in FY 2021-22

Other Investment Options include:

• House Rent Allowance: If you are still working and receive HRA from employer, you can claim HRA in case you pay rent, to reduce your taxable income
• Home Loan Interest: Home Loan Interest paid by you can be claimed under Section 24 to save your Income Tax
• Charity: You can also donate to identified charitable organizations to save your income tax

Watch this video to see how to save income tax:

Choose between Old and New Slab Rates:

When your income is below Rs. 5 Lacs, you need not have to pay any income tax due to the benefit of Tax Rebate u/s 87A. As your income increases above Rs. 5 Lacs in a FY, you need to make required investments and reduce your taxable income to below Rs. 5 Lacs to save your income tax.

When your income increases more and reaches at a point where investment options won't help much, you need to analyze your financial data and choose between Old & New Tax regime to pay less income tax.

The ideal way is the specify Investments that you are eligible for and compare the Income Tax that you have to pay with Old or New Tax Regime and choose the one that makes you pay less Income Tax.

This can be easily done using the Income Tax Excel Calculator or our Free Android App Calculator

Conclusion:

It is very easy to calculate Income Tax using the excel calculator or our Free Android App Calculator.

It's just a matter of providing 3 inputs - Income, Investments & TDS, that will help you calculate your Income Tax with Old and New Tax Regimes and help you decide between them.

You can watch more personal finance videos on YouTube Channel

Some more Videos:

DOWNLOAD INCOME TAX EXCEL CALCULATOR

Frequently Asked Questions (FAQ):

1. How do I calculate my Income Tax in FY 2021-22?

Ans. You have the option of choosing between Old Slab Rates and New Slab Rates in order to calculate your Income Tax in FY 2021-22. You can choose based on your income and investments you make to accordingly calculate income tax in FY 2021-22

2. Where can I get Income Tax Calculator for FY 2021-22?

Ans. You can download the Income Tax Calculator Android App to calculate and compare your Income Tax

3. How to Save Income Tax in FY 2021-22?

Ans. You can save income tax in FY 2021-22 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 2021-22. 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 Lakhs?

Ans. In case your Net Taxable Income is up to Rs. 5 Lakhs, 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 Lakhs, 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 2020-21?

Ans. Standard Deduction applicable for FY 2021-22 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 2021-22 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 2021-22?

Ans. There were no changes made in Budget 2021 regarding the Income Tax Slab Rates. So the old and new slab rates that were applicable in FY 2020-21 are still applicable in FY 2021-22 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. LINK GIVEN BELOW.

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