Why is my ₹12 LPA only ₹78K a month? Let's fix that.

The income tax calculator that starts where your offer letter ends

Almost every income tax calculator in India asks for one number — your taxable income — and hands back a tax figure. That is the easy half, and it is the half nobody is confused about. The hard question is the one people actually ask: my CTC is ₹12 lakh, so why does ₹78,000 land in my bank?

This salary calculator answers that question instead. You give it the number on your offer letter. It splits that CTC the way an Indian payroll actually splits it — basic, HRA, employer PF, gratuity, employer NPS, LTA, flexible benefits, special allowance — then runs the old regime vs new regime comparison on the result, finds the exact deduction level at which the old regime starts winning for your salary, and shows what restructuring the package would save you.

It is built for one country and one financial year: India, FY 2026-27 (AY 2027-28). No generic slabs, no US-style deductions, no currency conversion. Rupees, Indian slabs, Indian payroll conventions, Indian rules.

New regime income tax slabs for FY 2026-27

These are the slabs the calculator applies under the default (new) regime. They are marginal rates: income inside each band is taxed at that band's rate, not the whole income at the top rate. This single misunderstanding is behind most "will a raise push me into a higher bracket and cost me money?" worries — it will not.

Old regime slabs, and who they still suit

The old regime survives for people with genuinely large deductions — a home loan, a big rent, a full 80C, an NPS contribution, a family health cover. Its rates are higher and its exemption limit is lower, but it lets you subtract things the new regime ignores.

Under the old regime a rebate wipes out the tax if taxable income is ₹5,00,000 or less. Above that, it disappears entirely — there is no marginal relief on this one, which is why ₹5,00,001 of taxable income is a genuinely expensive rupee under the old regime and the calculator flags it.

What each regime lets you subtract

That last pair of rows is the one people miss. Employer NPS is the only meaningful deduction the new regime kept, and it is more generous there — 14% of basic against the old regime's 10%. For a high earner staying in the new regime, asking payroll to route more of the package through employer NPS is often the single largest legal saving available.

How your CTC becomes your in-hand salary

CTC is what you cost your employer. In-hand is what reaches your account. Between the two sit five subtractions, and only one of them is tax.

1. Employer PF comes out first. 12% of basic, paid into your EPF account. It is your money, but it is not your salary this month. The statutory wage ceiling is ₹15,000 a month (₹1.8 lakh a year) of basic — many employers apply it, many pay on full basic. The calculator lets you set which, because the difference runs to tens of thousands.
2. Gratuity is set aside. Roughly 4.81% of basic. You see it after five years of service, or not at all.
3. Employer NPS, if your package has it. Paid straight into your NPS account, never into your bank.
4. Your own PF share leaves your gross. Another 12% of basic — this is the deduction on your payslip. Again, savings rather than a loss, which is why the calculator counts it separately from tax.
5. Then income tax and professional tax. Professional tax is a state levy, roughly ₹200 a month where it applies; the calculator uses ₹2,400 a year. Maharashtra, Karnataka, West Bengal, Tamil Nadu, Telangana, Gujarat, Madhya Pradesh, Andhra Pradesh, Kerala, Assam, Odisha and Bihar levy it. Delhi, Uttar Pradesh, Haryana, Punjab and Rajasthan do not.

Notice what did the damage in that example, and what did not. Income tax was zero. The ₹1.4 lakh gap between ₹12 lakh CTC and ₹10.6 lakh in-hand is employer PF, gratuity and your own PF — three forms of saving — plus ₹2,400 of professional tax. People assume tax ate their salary; usually, at this level, it did not.

The HRA exemption formula, in full

House Rent Allowance is the most valuable old-regime exemption for salaried people in Indian cities, and the most commonly miscalculated. You do not get the HRA in your package exempted. You get the lowest of three numbers:

• The actual HRA in your salary structure
• Rent actually paid, minus 10% of your basic salary
• 50% of basic if you live in a metro — Mumbai, Delhi, Kolkata or Chennai — otherwise 40% of basic

Old regime vs new regime: where the crossover sits

There is no universal answer, and any article that gives you one is guessing. The old regime wins only when your total deductions — HRA exemption plus everything under Chapter VI-A — exceed a break-even figure that depends on your gross salary. Below that figure the new regime's lower rates and larger standard deduction win; above it, the old regime's subtractions win.

The calculator computes that exact crossover for your salary and tells you how far you are from it. As a rough orientation before you run it:

Two practical notes. First, you may switch between regimes each year if you have only salary income, so this is a decision you get to revisit — not one you are stuck with. Second, the new regime is the default: if you say nothing, that is what your employer applies to your TDS.

Surcharge and cess — the part that bites above ₹50 lakh

Above ₹50 lakh of taxable income, a surcharge is added on top of the tax itself, and then 4% health and education cess is charged on tax plus surcharge.

Marginal relief applies at every one of those thresholds, and the calculator models it. Without relief, crossing ₹50 lakh of taxable income by one rupee would add over a lakh of surcharge. Relief caps the extra tax at the extra income, so the cliff becomes a slope. The 25% cap in the new regime is the reason the very top of the income scale is now taxed more lightly there than under the old regime.

How to use this salary and tax calculator

1. Enter your annual CTC. The figure on the offer letter or the appraisal note — before anything is deducted.
2. Set the basic percentage. Check your payslip. Most Indian employers keep basic between 35% and 50% of CTC. A higher basic means more PF and gratuity and a lower in-hand today; a lower basic means the reverse and a smaller HRA exemption.
3. Add your rent if you pay any. Without it the HRA exemption is zero and the old regime almost certainly loses.
4. Fill in your deductions. 80C beyond your PF, health insurance under 80D, home loan interest under 24(b), the extra ₹50,000 NPS under 80CCD(1B).
5. Read the verdict, then open the Battle tab. It shows both regimes side by side and the exact deduction level at which the answer flips.
6. Finish in the Restructure Lab. This is where the money is. It tests employer NPS, LTA and flexible benefits against your own numbers and reports what each would save.

Common mistakes this calculator is built to catch

Treating CTC as salary

Employer PF, gratuity and employer NPS are inside CTC and never reach your bank. On a ₹12 lakh package that is around ₹80,000 a year before a rupee of tax.

Assuming a raise into the next slab makes you poorer

Slabs are marginal. Only the income above the threshold is taxed at the higher rate. The only genuine cliffs in Indian personal tax are the rebate limits and the surcharge thresholds, and marginal relief flattens most of those.

Claiming the full HRA in your package

The exemption is the lowest of three figures and is usually well below the HRA on your payslip. Claim more and it will not survive scrutiny.

Counting EPF twice under 80C

Your own 12% PF contribution already fills part of the ₹1.5 lakh 80C limit. If your basic is ₹6 lakh, PF alone contributes ₹72,000 and only ₹78,000 of ELSS or PPF will fit alongside it.

Ignoring employer NPS in the new regime

It is the one large deduction the new regime kept, at up to 14% of basic. Most people never ask payroll for it.

Forgetting that professional tax is a state matter

Moving from Noida to Bengaluru adds ₹2,400 a year that no calculator using a national default will show you.

Frequently asked questions

The other calculators

Glossary

CTC

Cost to company — everything your employer spends on you, including contributions that never reach your bank account.

Gross salary

Your cash salary before deductions: basic, HRA, allowances. Employer PF and gratuity sit outside it.

Basic salary

The anchor of the whole structure. PF, gratuity and the HRA exemption cap are all percentages of it.

Standard deduction

A flat subtraction for salaried people needing no proof — ₹75,000 in the new regime, ₹50,000 in the old.

Taxable income

Gross salary minus every exemption and deduction you are allowed. Slabs apply to this, not to CTC.

Marginal rate

The rate on your next rupee earned. Useful for judging whether an extra investment or a bonus is worth it.

Effective rate

Total tax divided by total income. Always lower than the marginal rate, because the early slabs are cheap.

Rebate

A reduction applied after the tax is computed — long known as Section 87A. It removes tax entirely below the limit rather than reducing income.

Marginal relief

A cap that stops your tax from rising by more than your income did when you cross a threshold. It turns cliffs into slopes.

Cess

Health and education cess at 4%, charged on tax plus surcharge. It applies in both regimes and to everyone.

Surcharge

An additional percentage of the tax itself, starting above ₹50 lakh of taxable income.

Perquisite

A non-cash benefit treated as salary — a company car, rent-free accommodation, or employer contributions above the exempt limits.