# 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 %}