> For the complete documentation index, see [llms.txt](https://docs.runtimehrms.com/llms.txt). Markdown versions of documentation pages are available by appending `.md` to page URLs; this page is available as [Markdown](https://docs.runtimehrms.com/payroll-and-compliances/statutory-compliances/income-tax.md). # Income Tax Income tax is a tax imposed by the government on the income earned by individuals. It is typically calculated as a percentage of the taxable income of the taxpayer, with various deductions. To calculate the income tax, let's go to Setup > Statutory Options > **Income Tax.**

You will be directed to the **Income Tax Settings screen**, to configure Income Tax for tax deduction in payroll.

**Disable Income Tax** If you want to disable this feature, click the **'Disable Income Tax'** button on the top right corner of the screen. **Tabs** The Income Tax Settings screen displays **three** tabs including- * Salary Components * % Tax Rates * Locations Applicability **Salary Components** Salary components typically include various elements that make up an employee's total compensation package.

**% Tax Rates** Percentage tax rates vary depending on age categories, and new and old tax schemes.

**Locations Applicability** {% hint style="warning" %} Location-based Income Tax Applicability has been discontinued. {% endhint %} --- # Agent Instructions This documentation is published with GitBook. GitBook is the documentation platform designed so that both humans and AI agents can read, navigate, and reason over technical content effectively. Learn more at gitbook.com. ## Querying This Documentation If you need additional information that is not directly available in this page, you can query the documentation dynamically by asking a question. Perform an HTTP GET request on the current page URL with the `ask` query parameter, and the optional `goal` query parameter: ``` GET https://docs.runtimehrms.com/payroll-and-compliances/statutory-compliances/income-tax.md?ask=&goal= ``` `ask` is the immediate question: it should be specific, self-contained, and written in natural language. `goal` is optional and describes the broader end goal you are ultimately trying to accomplish on behalf of the user. GitBook uses it to tailor the answer towards what is most useful for that goal. The response will contain a direct answer to the question and relevant excerpts and sources from the documentation. Use this mechanism when the answer is not explicitly present in the current page, you need clarification or additional context, or you want to retrieve related documentation sections.