| Income Range | Tax Rate | Cess (4%) |
|---|---|---|
| Up to ₹2,50,000 | 0% | 0% |
| ₹2,50,001 - ₹5,00,000 | 5% | 4% |
| ₹5,00,001 - ₹10,00,000 | 20% | 4% |
| Above ₹10,00,000 | 30% | 4% |
Salary discussions often mention terms like CTC, gross salary, and take-home salary, but these are not the same. Understanding the difference helps you evaluate job offers correctly and avoid unpleasant surprises on payday.
| Salary Term | What It Includes |
|---|---|
| CTC (Cost to Company) | Gross salary + employer PF + bonuses + benefits |
| Gross Salary | Basic pay + allowances + bonuses |
| Take-Home Salary | Gross salary minus tax, PF, ESI, and other deductions |
Employers often highlight CTC, but what really matters for monthly expenses is your take-home salary, the amount credited to your bank account.
Your take-home salary is the actual money you receive in your bank account every month after all the cuts. Many people think their CTC or gross salary is what they'll get, but that's not true. From your gross salary, the company cuts several things - EPF contribution (you contribute 12%, company adds 12% but your 12% is deducted), ESI if your salary is below ₹21,000, professional tax (varies by state, usually ₹200-₹500), and most importantly, income tax based on your tax slab.
For FY 2025-26, understanding your take-home becomes even more important because of the old vs new tax regime choice. Under the new regime, you get less deductions but lower tax rates, so your take-home might be higher if you're not making investments. Under the old regime, you get deductions for EPF contributions, insurance, loans, etc., but the tax rates are higher. Many people are confused about which regime gives better take-home - our calculator helps you see both scenarios clearly.
One big component affecting take-home is HRA if you're staying on rent. If you get HRA and are paying rent, using our HRA calculator helps you understand how much you can claim as exemption. This exemption reduces your taxable income, which means less tax, which means more take-home salary. The HRA benefit is available only in old regime, so this is a major factor in regime selection for many people.
After calculating your take-home, if you want to see your complete tax picture including all other income and deductions, use our income tax calculator. This helps you verify if your employer is cutting tax correctly. If you discover they've cut more tax than needed, use our refund calculator to see how much you can claim back during ITR filing.
To understand salary components and how deductions work, you can also check Tax2Win's page at salary income TDS calculation guide which explains standard deduction, HRA rules, and how salary components are taxed.
Below is a simplified example to show how deductions impact your monthly take-home salary. Actual figures may vary based on tax regime, city, and investment declarations.
| Gross Monthly Salary | ₹1,00,000 |
| Employee PF (12%) | ₹6,000 |
| Professional Tax | ₹200 |
| Income Tax (TDS) | ₹8,500 |
| Monthly Take-Home | ₹85,300 |
This example highlights why two people with the same CTC can have very different take-home salaries depending on tax regime and deductions.
Your choice of tax regime directly affects how much salary you take home every month. The table below summarises how each regime impacts deductions and take-home pay.
| Criteria | Old Regime | New Regime |
|---|---|---|
| HRA Exemption | ✅ Available | ❌ Not Available |
| 80C / 80D Deductions | ✅ Available | ❌ Not Available |
| Tax Rates | Higher | Lower |
| Best For | High rent & investments | Low deductions |
The best way to decide is to calculate take-home salary under both regimes and choose the one that leaves more money in hand.
Gross salary is your total earnings before any deductions. Take-home salary is the amount you receive after deducting taxes, PF, ESI, and other deductions.
HRA exemption is the minimum of: (1) Actual HRA received, (2) Rent paid minus 10% of basic salary, (3) 50% of basic salary (metro) or 40% (non-metro).
Old regime allows various deductions (80C, 80D, etc.) but has higher tax rates. New regime has lower tax rates but limited deductions. Choose based on your deductions.
No, professional tax varies by state. It's typically ₹200-250 per month and is deducted from salary. Some states don't have professional tax.
Yes, through various deductions like 80C (₹1.5L), 80D (health insurance), 80E (education loan), HRA exemption, and other legitimate deductions.