Income Tax Calculator Excel (Step-By-Step Guide)

You are liable to pay income tax if you get an annual income above Rs.2.5Lakhs. You can file your Income Tax Returns through an online e-portal. You should file the returns within the due date to avoid penalties.

To calculate your income tax, you can use the Income Tax Calculator. An Income tax calculator is an online tool designed to estimate how much income tax you are liable to pay.

The calculator gives an approximate figure of your income tax liability by measuring various data such as your income, deductions, HRA exemption, etc.

Thus, income tax calculator excel comes to your rescue to calculate the tedious process of calculating your tax.

Table of Contents

How do I calculate tax on an Excel spreadsheet?

There are many online tax calculators present on the Internet.

You can use any of them for easy computation of your tax.

You can also use the Income Tax calculator available on the e-filing portal of the Income Tax Department.

Let us see how you can use income tax calculator excel

Step 1: Open MS Excel; and fill in your income details. Add your gross income, your total exemptions, and deductions.

Step 2: Create two rows to calculate your taxable income and tax.

Step 3: First, you need to calculate the taxable income. Subtract the exemptions and deductions from your gross income. It gives your taxable income.

Step 4: Now calculate the tax for your taxable income. If your taxable income is below 2.5 lakhs, your tax is 5% of your income. Now you can calculate 5% of the taxable income. Income tax excel template

Step 5: Taxable income *5/100. It gives the amount of tax you should pay.

Thus you can calculate your tax through an excel sheet.

Click Here to download the excel template.

How do I use Excel to calculate income tax?

You can use an income tax calculator excel sheet to calculate your income tax. The following are the three tips that may help you to calculate tax in excel.

1. Insert, Adjust And Calculate Your Tax Data In Spreadsheets

You first need to calculate your taxable income to calculate your income taxes. Convert your financial data into Excel so you can work on your applicable deductions, credits, and exclusions using Excel formulas and functions. You will get your taxable income. It can seem complex, but they are invaluable once you get the hang of them.

2. Use Separate Worksheets For Data Calculations

Every schedule/section requires special attention. So, use separate worksheets for different schedules or forms. A separate worksheet helps you to calculate each data with defined formulas separately.

It has a lot of benefits. You can fill in your updated numbers on the same worksheet every year.

3. Keep Data Formatting Consistent 

Have the same format throughout your excel spreadsheet. If you have a different format for decimals and other factors, it would be difficult to manipulate the data at the end.

You can use the Sort & Filter and Data Tools section in the Data tab or the Numbers and Editing sections in the Home tab, to fix your formatting. You can change the format in PDF before reaching the spreadsheet. You can use PDF to excel converter for this action.

Using these tips, you can calculate your tax through excel easily.

What is the formula to calculate tax?

The basic formula to calculate tax is, 

Your Total income – (Your exemptions and deductions).

It gives your taxable income. Based on your taxable income, you should pay tax appropriate to your tax slab.

Net taxable income New Tax Regime

Up to 2.5lakhs Exempt

2.5 – 5 lakhs 5%

5-7.5 lakhs 10%

7.5-10 lakhs 15%

10-12.5 lakhs 20%

12.5-15 lakhs 25%

15 lakhs and above 30%

Based on this tax regime, you can calculate your tax.

How do I Auto calculate expenses in Excel?

You can use Excel functions available for all types of calculations. 

If you need to sum a column or row of your expenses, you can use excel functions to do the math. Select a cell next to the expenses cell you want to sum, click AutoSum on the Home tab and press Enter. 

When you click AutoSum, Excel automatically enters a formula (that uses the SUM function) to sum your expenses.

AutoSum is in two locations: Home > AutoSum, and Formulas > AutoSum.

FAQ: Income tax calculator excel

1. How do I create a tax expense spreadsheet?

You can create a tax expense spreadsheet similar to the tax calculator.

Your bank sends you the details of your account nowadays. You can directly import them into excel to keep track of your expenses.

It gives your expenses, transactions, income, and every operation done in your account. You can track it.

2. How do I calculate personal income tax in Excel?

As said above, you can use this income tax calculation formula in excel. The formula for calculating your taxable income is Gross income- (Exemptions + deductions).

Fill in all your income details and calculate your taxable income.

Now, based on the income tax slab you are applying, you can calculate your tax.

3. Where can I find free Excel templates?

You can find free excel templates on Microsoft Excel itself.

Open MS Excel. On the right side of the Home tab, select More templates. You can fix the template that suits you from the list of templates.

If you cannot find one per your needs, you can use the Search for online templates text field to see if there is a template online for what you need.

You can also get many free excel templates online that you can download and use.

4. How do I use Excel to calculate expenses and income?

You can keep track of your expenses and income using an excel sheet. Excel formulas and functions help you keep track of your money.

Income and expense spreadsheets are required to help you see where your finances stand. You can create a worksheet with income in one column and expense in another. You can use excel SUM function to create a formula to add and total each column.

Bottom line

An Income tax calculator is an online tool designed to estimate how much income tax you are liable to pay.

The calculator gives an approximate figure of your income tax liability by measuring various data such as your income, deductions, HRA exemption, etc. Thus, you can use the income tax calculator excel to calculate the income tax you are liable to pay in an easy manner. You need to fill in your income details and the required tax is computed through excel.

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