The income tax is a tax imposed on individuals in respect of their income or profits. Frequently, you need to calculate the income tax on salary by yourself in some countries and pay it. In this tutorial, you will learn how to calculate income tax on salary with **Old Regime** in Excel.

**Table of Contents**Expand

## How to Calculate Income Tax on Salary with Old Regime in Excel: 4 Easy Methods

For the examples, we will use the following dataset. The dataset shows the tax rates both for the **Old Regime** and the **New Regime**. Clearly, the tax rates for both regimes are different. We will calculate the income tax on salary with** Old Regime** in this article.

### 1. Calculate Income Tax on Salary with Old Regime with Different Tax Slabs

Sometimes government defines Income slabs for different ranges of income. According to these slabs, tax percentage varies with income range like the following table. Now we will see how to calculate **Taxable Income** and **Income Tax** on salary with different **Tax Slabs** defined by the government with **Old Regime** in Excel.

**Steps:**

- Firstly, click the
**C9**cell and type the following formula to calculate the taxable income like the previous method:

`=C5-C6-C7`

- Now press
**Enter**to calculate the**Taxable Income**.

- After that, create a new column named
**Differential**next to the column**Tax Rate**and input**10%**manually in the**E13**. - Then click
**E14**cell, and type the following formula:

`=D14-D13`

- Next, press
**Enter**and drag the**Fill Handle**to the entire column**Differential**.

- Now create a new column named
**Amount**next to the column. - Then click on cell
**F13**and type the following formula:

`=$C$9-B13`

- Furthermore, press
**Enter**and drag the**Fill Handle**to the entire column**Amount**.

- Furthermore, create a new column named
**Tax**next to the column**Amount**. - Now, select the
**G13**cell and type the following formula:

`=F13*E13`

- After that, press
**Enter**and drag down the**Fill Handle**to the**G15**cell (to the cell till the**Amount**column entries are positive).

- Next, click the
**C10**cell and sum the cells from**G13**to**G15**by typing the following formula:

`=SUM(G13:G15)`

- Finally, press
**Enter**and It will calculate the income tax on your salary.

### 2. Apply SUMPRODUCT Function to Calculate Income Tax on Salary with Old Regime In Excel

**The SUMPRODUCT function** can also be used to calculate income tax on salary in Excel. It is quite easy to calculate the income tax by using only a single function. Now we will see how to calculate income tax on salary with **Old Regime** using the **SUMPRODUCT** Function in Excel.

**Steps:**

- At first, we need to insert a new row above row
**5**. For that, select row**5**and**right-click**on your mouse. It will open a new window like the following image. - Then click the
**InsertÂ**tab.

- After that, click the
**Entire Row**option, then**OK**and It will create a new row above row**5**.

- Now suppose the
**Taxable Income**is**$940000**of an individual. We want to calculate the Income Tax of the individual. For that, click the**C14**cell and type the following formula:

`=SUMPRODUCT(D6:D11-D5:D10,C13-B6:B11,N(C13>B6:B11))`

- Finally, press
**Enter**and it will calculate the income tax of the individual.

**Read More:**Â How to Calculate Social Security Tax in Excel

### 3. Calculate Income Tax on Salary with Old Regime with Excel VLOOKUP Function

**The VLOOKUP function** can be used to calculate income tax on salary with **Old Regime** in Excel. It is an easy way to calculate the income tax by using only a single **VLOOKUP **Function. Now we will see an example to calculate income tax on salary using **VLOOKUP **Function from the following data set.

**Steps:**

- First of all, create a new column named
**Cumulative**next to the column**Tax Rate**. - Now, select the
**E5**cell and insert**$0**. - After that, select the
**E6**cell and type the following formula:

`=(C5-B5)*D5`

- Now press
**Enter**.

** **

- Subsequently, select the
**E7**cell and type the following formula:

`=(C6-B6)*D6+E6`

- Now press
**Enter**and drag down the**Fill Handle**to the entire column of**Cumulative**from the**E7**.

- Now suppose the
**Taxable Income**is**$940000**of an individual and we want to calculate the**Income Tax**of the individual. For that, click the**C13**cell and type the following formula:

`=VLOOKUP(C12,B4:E10,4,TRUE)+(C12-VLOOKUP(C12,B4:E10,1,TRUE))*VLOOKUP(C12,B4:E10,3,TRUE)`

- Lastly, press
**Enter**and it will calculate the income tax of the individual.

**ðŸ”Ž**** How Does the Formula Work?**

**VLOOKUP(C12,B4:E10,4,TRUE):**Firstly, this part of the formula looks for**C12**in the range (**B4:E10**). Then, returns the rate from column**4**.**(C12-VLOOKUP(C12,B4:E10,1,TRUE)):**The**VLOOKUP**function looks for**C12**in the range**B4:E10**. Returns the value from the**1st column**. Next, deducts the output from**C12**.**VLOOKUP(C12,B4:E10,4,TRUE)+(C12-VLOOKUP(C12,B4:E10,1,TRUE))*VLOOKUP(C12,B4:E10,3,TRUE):**At last, it multiplies the outputs of**VLOOKUP(C12,B4:E10,3,TRUE)**and**(C12-VLOOKUP(C12,B4:E10,1,TRUE))**. After that, add**VLOOKUP(C12,B4:E10,4,TRUE)**output to it.

### 4. Apply IF or Nested IF Function to Calculate Income Tax on Salary with Old Regime In Excel

**The IF function** or **Nested IF function** is a very useful function if we want to calculate income tax on the salary of different persons with a single function. Now we will see an example of calculating income tax using the **IF **or **Nested IF function**. For that, we need a data set like below where the income tax slabs are given and the salary of four individuals (**John**, **Mathew**, **Rachael, **and **Jim**) are given. We will calculate income tax on their salary.

**Steps:**

- At first, select cell
**D14**and type the following formula:

`=IF(C14>=$B$11,C14*$D$11,IF(C14>=$B$10,C14*$D$10,IF(C14>=$B$9,C14*$D$9,IF(C14>=$B$8,C14*$D$8,IF(C14>=$B$7,C14*$D$7,IF(C14>=$B$6,C14*$D$6))))))`

- After that, press
**Enter**and It will calculate income tax on**Johnâ€™s**Salary.

- Now select cell
**D14**and drag down the**Fill Handle**to the entire column**Income Tax**. - Finally, it will calculate the income taxes of the
**4**individuals using the**IF**or**Nested IF Function.**

**ðŸ”Ž How Does the Formula Work?**

- Here, if
**C14**is greater than or equal to**B11**, itâ€™ll give**C14*$D$11**. - If
**C14**is greater than or equal to**B10**, it returns**C14*$D$10**. - However, when
**C14**is greater than or equal to**B9**, it returns the output of**C14*$D$9**. - Again, when
**C14**is greater than or equal to**B8**, it returns**C14*$D$8**. - Furthermore, when
**C14**is greater than or equal to**B7,**it returns the value**C14*$D$7**. - Lastly, If
**C14**is greater than or equal to**B6**, it returns**C14*$D$6**.

**Read More:** How to Calculate Income Tax in Excel Using IF Function

## Things to Remember

**IF**or**Nested IF Function**is the quickest method if you want to calculate Income Tax on salary for more than one person in Excel.- For calculating income tax for one person,
**SUMPRODUCT**and**VLOOKUP**functions can be useful.

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## Conclusion

Hence, follow the above-described methods. Thus, you can easily learn how to calculate income tax on salary with **Old Regime** in Excel. Hope this will be helpful.Â Donâ€™t forget to drop your comments, suggestions, or queries in the comment section below.

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