Income Tax calculation in BizCentric
- During the payroll period setup, establish the income tax slabs in accordance with government regulations. Additionally, include any standard deductions mandated by the government within this setup.
- For employees who have made investments or provided tax declarations, such as PPF, insurance, mutual funds, HRA, etc., input these details in the “Employee Tax Exemption Declaration” section.
- When configuring the salary component for Income Tax, ensure to select the “Variable Based On Taxable Salary” checkbox. Enabling this option means that income tax calculations will be automatically computed, considering the Payroll Period and Tax declarations.
- Subsequently, create a salary structure and include Income Tax in the deduction section, leaving the amount field blank. Additionally, incorporate Education Cess, which will be based on a formulated calculation.
- Proceed to create a payroll entry and generate salary slips. The system will automatically calculate the income tax, along with the Education cess, based on the provided information and declarations.