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Calculate Income Tax in Excel
Madhuri Thakur
Article by
Madhuri Thakur
Updated June 12, 2023
Calculate Income Tax in Excel 1
Introduction to Income Tax in Excel
Calculating income tax can be overwhelming as there are too many rules and formulas. There are calculators and other resources that you can use. You may also take CA’s help. But the best option is to use Excel to simplify this process. In this article, we will see tax regimes and explain how to calculate income tax in Excel. We will also provide practical examples using different tax slabs.
Moreover, for your convenience, we have also added a ready-to-use Excel template and given stepwise instructions on how to use it. This template will help you determine the exact tax amount you need to pay for the A.Y 2023-2024 as per the old and new tax regimes.
Here is the step-by-step method of calculating taxes using our ready-to-use template.
Add your income, deductions, and exemptions values to our ready-to-use template.
Our template will calculate your taxable income.
The template will automatically determine the tax slabs and rates for your taxable income.
Finally, Excel will calculate the total taxes as per both the old and new regimes.
You can choose the tax amount as per the tax regime that you follow.
Old and New Tax Regimes
There can be additions and omissions in the precious tax laws and regulations from time to time. It happens when the government provides regular amendments. Therefore, it is important to keep knowledge about the changes in the tax slabs.
The table below lists the tax slabs as per the old and new tax regimes. The information is from the income tax government website and the press release of the Indian budget.
Old and New Tax RegimesNote: The above table gives the income tax slab for individuals less than 60 years of age. As the Indian Government has different tax brackets for people of different age groups, please refer to the official site for more detailed information. Use Our Template to Calculate Income Tax in Excel
To help you calculate your income tax in Excel, we have added a downloadable, ready-for-use Excel template here. Go ahead and download the template.
You can download this Calculate Income Tax Excel Template here – Calculate Income Tax Excel Template
Here is how you can use the Template.
1. Enter your income from any/all income sources in cells B2 to B6.
use the template 1
2. Add the amount for deductions and exemptions in cells B7 & B8.
use the template 2
Don’t worry; our template will subtract them automatically.
3. We have provided the tax rates (old and new) and the surcharge rates in the same sheet.
use the template 3
4. You can find the calculations for a hypothetical salary figure in the below image.
(We have already inserted the formulas in the Excel sheet, so Excel will automatically use these rates & formulas and calculate your taxable income and tax amount.)
use the template 4Note: If the income is less than 50 Lacs, then the surcharge column will give the result as “0”.
How to Calculate Tax? Easy Steps for Beginners
Step #1: You must be familiar with the tax slabs and rates for the old or new regime.
Example: Here, the tax slabs and rates are for individuals under the old regime.
Up to 2.5 lacs: No tax
5 lacs to 5 lacs: 5% tax
5 lacs to 10 lacs: 20% tax
Above 10 lacs: 30% tax
Step #2: Find which tax slab your income falls into.
We do this so we can find how many tax brackets and rates we need to use. If your income falls in the 2nd bracket, you should use both first and second. If it falls into the third bracket, then use the first, second, and third brackets.
Here’s a simple table to remember this:
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