Next determine the total exemptions availed by the individual. Health and education cess will be added to this at the rate of 4 per cent. How to Calculate Withholding Tax.
To calculate total income tax based on multiple tax brackets you can use VLOOKUP and a rate table structured as shown in the example.
This is the sale price minus any commissions or fees paid. In order to come up with an accurate reporting of financial status it is important for businesses and organizations to know how to compute income tax payable on the balance sheet. Further the income tax is arrived at by adding deferred tax liability and income tax payable. The formula to account for multiple marginal tax rates requires multiplying the total amount of money earned in each successive bracket by the tax rate and adding the values together.