1. What is ITR Tax?

The Income Tax Return (ITR) Tax in the Philippines is calculated by multiplying taxable income by the applicable tax rate. It represents the amount of tax an individual or entity owes to the government.

2. How Does the Calculator Work?

The calculator uses the basic ITR tax formula:

Where:

• \( \text{Taxable Income} \) — Income after all deductions and exemptions (PHP)
• \( \text{Rate} \) — Applicable tax rate (decimal form, e.g., 0.20 for 20%)

Explanation: The formula calculates the tax liability by applying the tax rate to the taxable income amount.

3. Importance of ITR Calculation

Details: Accurate ITR calculation ensures proper tax compliance, avoids underpayment penalties, and helps in financial planning. It's a legal requirement for all income-earning individuals and businesses in the Philippines.

4. Using the Calculator

Tips: Enter taxable income in PHP and the tax rate in decimal form (e.g., 0.25 for 25%). Ensure all values are valid (income > 0, rate between 0-1).

5. Frequently Asked Questions (FAQ)

Q1: What's the difference between gross income and taxable income?
A: Taxable income is gross income minus allowable deductions and exemptions. Only taxable income is subject to tax.

Q2: How do I determine the correct tax rate?
A: Tax rates vary based on income type (compensation, business, etc.) and amount. Refer to BIR tax tables for the current rates.

Q3: When is the ITR filing deadline?
A: For individuals, April 15 of each year. For corporations, 30 days after the fiscal year ends.

Q4: Are there penalties for late filing?
A: Yes, the BIR imposes penalties for late filing including surcharges, interest, and compromise penalties.

Q5: Can I file ITR online?
A: Yes, the BIR has an eFPS system for online filing available to registered taxpayers.