How to Calculate the Amount of Income Tax to Pay For?

I am posting this How-To because I had previously gave inaccurate advice on income tax calculation. This post should clarify all doubts.

Suppose your taxable income after minus relief is $40,000, the amount of income tax to pay for is as follows:

Based on the above table, you will need to pay $350 + (5.5% * 10,000) = $900.

If you are eligible for the 20% one-time tax discount as announced during Budget 2009, your tax will be $720 instead.