Throughout our life, we search for things that can either save our time or our money. This one thought is the reason behind most of the advancements that we see today. One such tool that you can use to not only save your time but also money is the online tax calculator. This masterpiece was created with the objective to simplify the tax liability calculation for people who either don’t have the knowledge or the time to calculate them on their own. So, let’s see how you can use this tool to save your time and money.
How Tax Calculator Can Save Your Time?
Do you know the maximum time you will require to calculate the taxes with online tax calculator? Well, you will be amazed to know that it is just 2 minutes. Yes, you read that right. The time which your Maggie will take to get cooked, you will be ready with your tax calculations. Have a look at the whole procedure for calculations of taxes.
Step 1: Find a good tax calculator and open it in your browser.
Step 2: You will see four bars. In the first bar, enter your age bracket. There will be four options, so select the one that best defines you as different age groups have different taxation rates.
Step 3: In the 2nd bar enter your residential status. Here, you will see three options, which are resident, non resident, and non-ordinary resident. Select the one that best fits your status.
Step 4: In the third bar, you will have to type down your annual income. It is Age Calculator suggested that you input the exact amount, as the taxation rates for each income slab is different.
Step 5: In the fourth bar, you have to specify that if you are liable for any tax deduction. Here, you have to input the amount that you have invested in any tax saving instruments (ELSS, PPF, FD, LIC, etc.,). If you don’t have any, then leave it blank.
Now, as soon as you hit enter, you will be provided with the taxes that you have to pay in that year. The best thing about the online tax planner is that it is updated with the latest taxation trends and the results it provides are super accurate.
How to Save Money with a Tax Calculator?
As we’ve discussed above that this tool has a feature which allows you to calculate the reductions you will get by investing in the tax saving instruments. But, this feature can also be used to find the investment amount to save the most from your tax saving instruments. Let’s see how!
First of all, the most important thing you should know is tax saving instruments especially u/s 80C allows investors to enjoy tax reductions on investments up to Rs. 1.5 lakhs. Now, the tax calculator can help you find the right amount that you will require to get the best benefits from these instruments. Say, you have a salary of Rs. 5.5 lakhs and you want to invest in a tax saving instrument to get benefits. So, in the 4th bracket which is for tax reductions, put different investment values and keep on this process until you reach the desired tax saving amount.