Build an Income Tax Calculator for Salaried Emp in Google Sheets or Excel, Easy Step

Calculating your income tax doesn’t have to be complicated. For developers, it might be simple, but for most taxpayers, figuring out taxes can be tricky. Many people hire Chartered Accountants (CAs) at the end of the financial year to file their returns.

But did you know you can create your own income tax calculator in Excel or Google Sheets? With just a few basic formulas or functions and custom formatting, you can set up a simple tool to estimate your taxes for the financial year 2024-25 (assessment year 2025-26).

In this guide, we’ll walk you through easy steps to build your own calculator. It will help you estimate your annual tax liability and make filing your tax return much easier—all on your own!

How to Access Google Sheets in Chrome Browser

To locate Google Sheets in Chrome browser go to Google apps (Click on the App Launcher (the nine-dot grid icon →▦) in the top-right corner of your browser) ↣ when you click on this icon, it opens a menu showing various Google services like Gmail, Drive, Docs, Sheets, and more. You can scroll through this menu to find and access Google Sheets or other apps and click on it. You can also access directly to sheets.google.com in any web browser.

Both methods will take you to Google Sheets, where you can start creating an income tax calculator for salaried employees and simplify their tax filing process.

How to Start a New Spreadsheet for Your Income Tax Calculator

• Open Google Sheets (from the nine-dot grid icon or sheets.google.com).
• Click on the “+” (Blank spreadsheet) option to create a new spreadsheet.
• A blank spreadsheet will open.
• Rename it to “Income Tax Calculator” by clicking on the default name (usually “Untitled spreadsheet”) in the top-left corner and typing the new name.

Now, you’re ready to start building your own calculator for calculating the income tax.

Setting Up Your Income Tax Calculator in Google Sheets

Select Range:

• Here we use the cell range A1:R28 for calculator area formatting. This keeps the sheet organized and easy to navigate. The range is divided into three main sections:
  • 1st section — New Tax Regime: Range D3:G26
  • 2nd section — Tax Slab or Rate: Range I3:J26
  • 3rd section — Old Tax Regime: Range L3:O26

The remaining space is reserved for formatting and improving the overall appearance.

Highlights and Format Cells:

• Highlight the specified ranges by clicking and dragging over the cells.
• Adjust font size, style, alignment, and colors as needed for clarity and a professional look.

Calculation Areas:

• For the New Regime, the calculation area is within range D13:G26.
• The tax rate table is placed separately in the range I13:J26.
• For the Old Regime, it’s within range L13:O26.

Add Borders and Design Elements:

• Use bold headers for key sections like income details, deduction, and tax calculations.
• Apply different colors to headers or sections to make the sheet visually appealing.
• adjust column widths and row heights for better readability.
• Leave one blank column on the left and right both sides to maintain balance and improve the visual impression.

By following these steps, your sheet will look clean, professional, and easy to use.
Now your spreadsheet is ready to start building the calculator within the defined range (A1:R28).

Here’s a simplified explanation based on the given setup for creating an income tax calculator in Google Sheets:

Step-by-Step Guide:

• Setting Up the “GROSS” Section or first section:
  • Merge Cells D3:G3 and label it as “GROSS”. This will define the section where the gross income is entered.
• Entering the Gross Amount:
  • Just below the “GROSS” section, merge cells D4:G6. Here, input the gross income.
  • Example: Enter ₹20,00,000 as the gross income for calculation of income tax.
• Calculating Amount After Standard Deduction:
  • Below the gross amount, merge cells D7:E7. showing the Amount After Deduction.
  • Subtract the standard deduction of ₹75,000 from the gross amount:
    =D4-75000 where D4 is represent the gross amount as ₹20,00,000.
    ₹20,00,000 – ₹75,000 = ₹19,25,000.
• Calculating Total Tax:
  • In the same row, merge cells F7:G7 to display the Total Tax Amount (excluding cess).
  • Use appropriate tax slabs for the calculation. For this example, the total tax comes to ₹2,67,500 (excluding cess).
• Taxable Income Calculation:
  • Merge cells D8:E10 for the Taxable Income Section.
  • Deduct the tax-free amount (₹3,00,000) from the amount after the standard deduction:
    =D7-3,00,000
    or result showing as ₹19,25,000 – ₹3,00,000 = ₹16,25,000.
  • Show ₹16,25,000 as the taxable income.

Summary of Calculations:

• Gross Income (₹20,00,000): Input in D4:G6.
• Standard Deduction (₹75,000): Automatically subtracted, showing ₹19,25,000 in D7:E7.
• Tax-Free Income (₹3,00,000): Deducted to get taxable income (₹16,25,000) in D8:E10.
• Total Tax (₹2,78,200): Displayed in F8:G10 after applying the tax slabs.

Setting Up the “NEW Regime” Section

• Merge cells D12:G12 and label them as “NEW Regime”. This section will calculate tax as per the new regime tax slabs.
• Below this header, create a row to indicate the tax-free amount:
  • Label it as “upto 3,00,000 – Nil” since this amount is exempt from tax.

Dividing Taxable Income into Slabs and Calculation for Each

• Below the tax-free slab, divide the remaining taxable income (₹16,25,000) into slabs according to the new regime rates (showing range I6:J11).
• These represent the income portions taxed at various rates under the new regime.
• Allocate the amounts as follows:

Suppose your total gross income is ₹20,00,000. To calculate the taxable amount and allocate it as per the New Regime income tax slab chart, follow these steps:

• Standard Deduction and Nil Taxable Amount:
  • A standard deduction of ₹75,000 is applicable.
  • Additionally, the first ₹3,00,000 of your income is tax-free (not taxable).

• Deduct from Gross Income:
  • Subtract the standard deduction (₹75,000) and the nil taxable amount (₹3,00,000) from the gross income:
  • ₹20,00,000 – ₹3,00,000 – ₹75,000 = ₹16,25,000

• Taxable Income:
  • The remaining amount of ₹16,25,000 is your taxable income.

To divide ₹16,25,000 according to the given income tax slabs, we calculate the amounts falling within each slab:

1. ₹3,00,000 to ₹7,00,000 (difference = ₹4,00,000):
   The first ₹4,00,000 of ₹16,25,000 falls into this slab.
2. ₹7,00,000 to ₹10,00,000 (difference = ₹3,00,000):
   The next ₹3,00,000 of ₹16,25,000 falls into this slab.
3. ₹10,00,000 to ₹12,00,000 (difference = ₹2,00,000):
   The next ₹2,00,000 of ₹16,25,000 falls into this slab.
4. ₹12,00,000 to ₹15,00,000 (difference = ₹3,00,000):
   The next ₹3,00,000 of ₹16,25,000 falls into this slab.
5. Above ₹15,00,000:
   The remaining ₹4,25,000 of ₹16,25,000 falls into this slab.

New v/s Old Regime — Income Tax Slab, FY 2024-25 (AY 2025-26)

Step-by-Step Tax Calculation:

1. ₹3,00,000 to ₹7,00,000 (₹4,00,000 at 5%)
   Tax: ₹4,00,000 × 5% = ₹20,000
2. ₹7,00,000 to ₹10,00,000 (₹3,00,000 at 10%)
   Tax: ₹3,00,000 × 10% = ₹30,000
3. ₹10,00,000 to ₹12,00,000 (₹2,00,000 at 15%)
   Tax: ₹2,00,000 × 15% = ₹30,000
4. ₹12,00,000 to ₹15,00,000 (₹3,00,000 at 20%)
   Tax: ₹3,00,000 × 20% = ₹60,000
5. Above ₹15,00,000 (₹4,25,000 at 30%)
   Tax: ₹4,25,000 × 30% = ₹1,27,500

Total Tax:

Add up the taxes from each slab:
₹20,000 + ₹30,000 + ₹30,000 + ₹60,000 + ₹1,27,500 = ₹2,67,500

Final Calculation:

• Total Taxable Income: ₹16,25,000
• Tax Before Cess: ₹2,67,500
• 4% Cess: ₹10,700
• Total Tax Payable: ₹2,78,200

The below👇formulas calculate the allocated amounts for each tax slab, specific formulas are applied in cells D16, D18, D20, D22, and D24. These formulas output the allocate taxable income as ₹4,00,000, ₹3,00,000, ₹2,00,000, ₹3,00,000, and ₹4,25,000 respectively, by deducting exempt portions and prior slab limits. This ensures accurate tax calculations, with results displayed in corresponding cells for a clear breakdown.

Step-by-Step Breakdown with Formulas

Step 1: Deductions

• IF Gross Income: ₹20,00,000
• Less Nil-Tax Amount: ₹3,00,000
• Less Standard Deduction: ₹75,000
• Total Taxable Income: ₹16,25,000

₹16,25,000 is the amount to be allocated across the tax slabs.

Step 2: Taxable Income Allocation (Using Formulas)

• Cell D16 (₹3,00,000 to ₹7,00,000 – Max ₹4,00,000):
  =IF(D8>400000,400000,D8)
  • If the taxable income (D8) is greater than ₹4,00,000, allocate the maximum ₹4,00,000 to this slab.
  • Otherwise, allocate the entire taxable income (D8).
  • Output: ₹4,00,000 (if total taxable income is ₹16,25,000).
• Cell D18 (₹7,00,000 to ₹10,00,000 – Max ₹3,00,000):
  =IF(D8-D16>300000,300000,D8-D16)
  • ₹16,25,000 – ₹4,00,000 = ₹12,25,000 (remaining taxable income).
  • ₹3,00,000 is allocated (maximum allowed in this slab).
  • Output: ₹3,00,000.
• Cell D20 (₹10,00,000 to ₹12,00,000 – Max ₹2,00,000):
  =IF(D8-D16-D18>200000,200000,D8-D16-D18)
  • Subtract the amounts allocated to previous slabs (D16 and D18) from the taxable income (D8).
  • If the remaining income is greater than ₹2,00,000, allocate ₹2,00,000 to this slab.
  • Otherwise, allocate the remaining income.
  • Output: ₹2,00,000.
• Cell D22 (₹12,00,000 to ₹15,00,000 – Max ₹3,00,000):
  =IF(D8-D16-D18-D20>300000,300000,D8-D16-D18-D20)
  • ₹9,25,000 – ₹2,00,000 = ₹7,25,000 (remaining taxable income).
  • ₹3,00,000 is allocated (maximum allowed in this slab).
  • Output: ₹3,00,000.
• Cell D24 (Above ₹15,00,000 – Remaining Amount):
  =IF(D22<300000,0,D8-D16-D18-D20-D22)
  • ₹7,25,000 – ₹3,00,000 = ₹4,25,000 (remaining taxable income).
  • Output: ₹4,25,000 (remaining portion of ₹16,25,000).

Step 3: Allocations Summary:

• ₹3,00,000 to ₹7,00,000 (5%): ₹4,00,000 (Formula in D16)
• ₹7,00,000 to ₹10,00,000 (10%): ₹3,00,000 (Formula in D18)
• ₹10,00,000 to ₹12,00,000 (15%): ₹2,00,000 (Formula in D20)
• ₹12,00,000 to ₹15,00,000 (20%): ₹3,00,000 (Formula in D22)
• Above ₹15,00,000 (30%): ₹4,25,000 (Formula in D24)

Other example where Gross amount = ₹10,00,000

Step 1: Taxable Income Breakdown:

• Standard Deduction: ₹75,000
• Tax-Free Income (Nil Tax): ₹3,00,000

Taxable Income = Gross Income – Standard Deduction – Tax-Free Amount:
₹10,00,000 – ₹75,000 – ₹3,00,000 = ₹6,25,000 (Taxable Income)

Step 2: Divide ₹6,25,000 Into allocate amount

1. ₹3,00,000 to ₹7,00,000 (taxable income first ₹4,00,000 at 5%)
   The first ₹4,00,000 falls into the 5% tax slab.
2. ₹7,00,000 to ₹10,00,000 (remaining ₹2,25,000 at 10%)
   The next ₹2,25,000 falls into the 10% tax slab.

Step 3: Calculate Tax for Each Slab

1. Tax for ₹4,00,000 at 5%:
   ₹4,00,000 × 5% = ₹20,000
2. Tax for ₹2,25,000 at 10%:
   ₹2,25,000 × 10% = ₹22,500

Step 4: Total Tax Before Cess

• ₹20,000 + ₹22,500 = ₹42,500

Step 5: Add 4% Cess

• Cess: ₹42,500 × 4% = ₹1,700

Total Tax Payable: ₹42,500 + ₹1,700 = ₹44,200

Final Tax Summary:

• Taxable Income: ₹6,25,000
• Tax (5% Slab): ₹20,000
• Tax (10% Slab): ₹22,500
• Cess (4%): ₹1,700
• Total Tax Payable: ₹44,200

The income tax calculator for the New Regime is now fully operational. To use it, enter the gross income in the designated field (cell D4, as shown in the reference image). The calculator will automatically generate the results, offering a clear and precise view of your tax liabilities under the New Regime.

For the Old Regime Tax Calculation, replicate the structure used for the New Regime section, utilizing merged cells, defined ranges, and formatting to maintain consistency or align with your custom design as shown in the reference image above. If you require assistance with setting up the Old Regime Calculator, feel free to reach out by leaving a comment in the designated section.

After completing both the New Regime and Old Regime sections, you can compare the final tax amounts under the New Regime and the Old Regime to choose the one with the lower tax liability.

This setup provides a clear and detailed step-by-step calculation of income tax under each regime, enabling you to choose the option with the lower tax liability, ensuring tax efficiency and clarity in decision-making.

In conclusion, creating separate sections for tax calculations under the New Regime and Old Regime in a structured and visually clear format enables taxpayers to easily compute and compare their tax liabilities using their own calculator.

This simplifies the process, reducing dependency on hired professionals like Chartered Accountants for basic tax computations. By systematically breaking down taxable income into slabs, applying the respective tax rates, and incorporating the applicable cess, the final payable tax under each regime can be calculated with precision.

This step-by-step method ensures clarity, accuracy, and transparency while helping taxpayers identify the most tax-efficient option. Ultimately, this approach empowers individuals to make well-informed decisions about their income tax, ensuring compliance with tax regulations and minimizing their overall tax liability.