The maximum amount of revenue which the Government earns from direct taxes comes from salaried individuals. In order to calculate the amount of tax liability, we need to memorize the slab rates which is not an easy task. Most of the time, we have to open up the books and manuals to check which rates to apply.

Thanks to the Micrsoft Excel formula which can be used to calculate the tax liability. All you have to do is to define certain figures and viola.

**Example**

Consider a tax regime of a country where salary income is taxable according to the following structure/ slab rate:

In order to create an Microsoft Excel formula to this task much easy, we will use If formula with conditions. You just need to input the amount of annual salary in one cell and the tax liability will come out without any user involvment.

**Formula**

=IF($B$8>7000000,(($B$8-7000000)*30% +1422000), IF($B$8>=4000000, (($B$8-4000000)*27.5% +597000), IF($B$8>=3500000, (($B$8-3500000)*25% +472000), IF( $B$8>=3000000, (($B$8-3000000)*22.5% +359500), IF($B$8>=2500000, (($B$8-2500000)*20% +259500), IF($B$8>=1800000, (($B$8-1800000)*17.5% +137000),IF($B$8>=1500000, (($B$8-1500000)*15% +92000),IF($B$16>=1400000, (($B$8-1400000)*12.5% +79500),IF($B$8>=750000, (($B$8-750000)*10% +14500),IF($B$8>=500000, (($B$8-500000)*5% +2000),IF($B$8>400000, (($B$8-400000)*2% ),"")))))))))))

This formula will calculate tax liability of the income from salary. You can see from the below image that whatever salary amount we write, the tax liability gets calculated in the B8 formula.

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