Income Tax

Income tax is levied by central government on income earned by individuals, businesses and artificial bodies during a financial year.

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.


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

Location-based Income Tax Applicability has been discontinued.

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