Income Tax Calculation Formula In Excel Download This File
Income Tax Calculation Formula In Excel Professional Business Subjects

It does not address income taxed in other processes such as dividends and capital gains, or even disbursements that reduce the income tax liability.

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However, taxation calculations are most of the time tedious and if you need to make a small change you might have to punch millions of calculator keys again to get the tax liability calculated.

But we have a rescue pack for you in the name of Excel Many accountants have been using excel power to calculate income tax, sales tax or other different types of taxes very easily using excel in the blink of an eye.

And if taxation rules have not changed then you can use the old excel file for next period.

The basic idea is the get the instructions from relevant legislation and apply them using different excel formula and cell referencing and other techniques.

Many countries follow incremental taxation system i.e.

So for each range or slab of income or turnover different rates are provided as follows: S.No.

You can see it is basically a combination of IFs and ELSEs statements.

And believe it or not in Excel we have a function that works exactly the same way i.e.

IF function. Combination of IF functions is called Nested IF statement.

Using this function we can calculate the tax liability for a given taxable income.

Although there are several methods that we can use however, IF function is easiest to understand after the explanation given Lets tango Taxation Step 1: Punch in the slab information in excel.

This will act as the instruction data set for excel on which function will work.

Step 2: Mark a field in which you will enter the taxable income for which you require tax liability to be calculated.

In my case it is C10 Now in the cell you think best put in the following formula: IF(C10 Cell references are according to my own worksheet.

So you might have to change them if you have the data at a different location within worksheet.

If we achieve it then its very easy for subsequent calculations.

You can change the value of taxable income and your tax liability will be calculated for you on run time basis.

You can change taxable income value to calculate the tax accordingly.

Income Tax Calculation Formula In Excel Download This File

Happy Taxing Not to Forget You can download this file by clicking the excel button at the bottom of interactive window.

Income Tax Calculation Formula In Excel Professional Business Subjects

Facebook Twitter WhatsApp Pinterest Previous article Calculating number of days between two dates Excel Function Vs Common Sense Next article What is Audit around the computer Hasaan Fazal Teaching professional business subjects to the students of FIA, ACCA, CIMA, CA etc.

He also found ACCA LIVE which is Pakistans first portal to provide online classes and distance learning solutions to FIAACCA students.

At PakAccountants.com he is busy making study material for different qualifications.

Beside writing articles he answers questions asked using ASK TUTOR 3 COMMENTS jamies At Firstly, appreciating the posts, but could you please try to have the titles be less misleading The calculation shown appears to be basic INCOME TAX calculator.