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TDS Calculator in Excel

Income tax is withheld monthly from your wage as part of Tax Deduction at Source, or TDS. Your employer determines your income tax, which is withheld each month throughout a fiscal year from April to March of the following year. The income tax amount cannot be paid in one single sum but is withdrawn monthly.

  • TDS on Salary refers to the monthly income tax deduction from your paycheck. Monthly TDS on Salary is computed based on the amount of investments you make to qualify for deductions that lower your taxable income.
  • The most popular tool for handling large datasets is Excel. Excel allows us to do a plethora of activities with various dimensions. I'll calculate a TDS salary charge in salary format in this tutorial.

THE Reason TDS IS DEDUCTIBLE FROM PAY

Your income tax is, therefore, computed based on your income. You must pay this income tax; the government cannot wait until the end of the fiscal year for you to file your income tax return, or ITR, and make the necessary payments.

According to Section 192 of the Income Tax Act, you must pay income tax determined by your income for the financial year. Six Simple Steps for Deducting TDS from Salary Calculations in Excel.

The amount deducted whenever a particular payment occurs, such as a salary, commission, rent, interest, fees from professionals, and so forth, is known as TDS and Tax Deducted at Source. Whereas the person receiving the income or payment must pay the Tax, the person providing the payment deducts it at the source. Tax fraud is decreased since taxes are gathered at the time of payment.

I'll review how TDS deduction works with Excel salary calculations in this section. I've broken the procedure into six simple phases to make things easier.

Please be aware that as allowances and deducted amounts differ from nation to nation, a complete breakdown is not provided here.

Step 1: Compute Your Annual Salary

Assume for the moment that a person makes Rs 60,000 per month. I'll now figure out the annual wage.

  • To begin, navigate to B5 and enter the following formula:
=B4*12

TDS Calculator in Excel
  • Once you have the output, press ENTER.
    TDS Calculator in Excel

Step 2: Calculate Your Total Taxable Income from Salary

  • NSalaryigure out how much of the Salary iSalaryble overall.
  • Suppose there is a 1000 rupee deduction and 12,000 rupees of other taxable income.
    TDS Calculator in Excel
  • At this point, navigate to B8 and enter the formula for the taxable income TDS tax on salary computation in Excel format:
=B5+B6-B7
  • Once you have the output, press ENTER.

Step 3: Compute Tax upon Taxable Income

Next, the Tax on the taxable income needs to be calculated. A variety of slabs are used to compute the Tax.

To get the calculation,

  • Place the following formula in B9 and write it down.

TDS Calculator in Excel

Formula explanation:

  • B3<60 is a TRUE first logical test.
  • So the appropriate output is IF(B8>1000000,(((B8-1000000)*0.3)+110000),IF(B8>500000,(((B8-500000)*0.2)+10000),IF(B8>300000,(B8-300000)*0.05,0))))) The value of this output is 58,600.
  • Once you have the output, press ENTER.
TDS Calculator in Excel

Step 4: Calculate Education Cess

Measuring the education cess is the next step. The education cess is assumed to equal two per cent of the total taxed income.

To compute it,

  • Proceed to B10 and jot out the following equation.
=B9*2%

TDS Calculator in Excel
  • To view the output, hit ENTER after that.
TDS Calculator in Excel

Step 5: Determine Your Year's Tax Liability

The annual tax liability must be determined next. I'm going to utilise the SUM function for this stage. To compute it

  • Proceed to B11 and note the equation
= SUM(B9:B10)

TDS Calculator in Excel
  • To view the output, press ENTER after that.

TDS Calculator in Excel

Step 6: Monthly TDS Measurement

Completing the monthly TDS calculation is the last step. To figure it out,

  • Proceed to B12 and record the following equation:
=B11/12

TDS Calculator in Excel
  • To view the output, press ENTER after that.
TDS Calculator in Excel

Things to Keep in Mind

  • Various slabs are used to calculate the Tax.
  • The way the deductions and allowances are broken out differs depending on the section.






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