Salary and income tax in India, explained
How a package turns into the money that reaches your bank each month, and how the two tax regimes each work out what is owed. Read the four pieces under “Start here” in order, then go to whichever question is yours.
Educational information, not investment advice · Muktify is not SEBI-registered
The basics
CTC is not what you take home
A CTC includes items that never reach your account each month, such as the employer’s PF contribution and gratuity. In-hand pay is what is left after your own PF, income tax and, in most states, professional tax.
Two regimes, one choice each year
The new regime has lower slab rates and allows very few deductions; the old regime keeps deductions such as 80C, 80D and the HRA exemption. A salaried person can choose either when filing, and which one costs less depends on their own deductions.
HRA follows three limits
Under the old regime, the HRA exemption is the lowest of three figures: the HRA actually received, rent paid minus 10% of Basic + DA, and 50% or 40% of Basic + DA depending on the city.
Tax is collected through the year
An employer deducts TDS from salary each month. Where other income leaves more than ₹10,000 of tax still due for the year, advance tax falls due in four instalments, in June, September, December and March.
Start here
More on salary & tax
How much is every CTC from 3 LPA to 50 LPA per month in hand?
Monthly in-hand salary for every CTC from 3 LPA to 50 LPA in FY 2026-27: 10 LPA is about ₹73,133 and 20 LPA about ₹1,32,513. PF, tax and the full table.
A table of all 21 packages, with a page for each below →
How much income tax at every salary from ₹5 lakh to ₹50 lakh?
Income tax at every salary from ₹5 lakh to ₹50 lakh in FY 2026-27, new and old regime: nil up to ₹12,75,000, monthly TDS and the old-regime break-even.
A table of all 17 salaries, with a page for each below →
How much tax does health insurance save under Section 80D?
Section 80D deducts up to ₹25,000 of health insurance premium, or ₹50,000 at 60+, plus parents’ cover. Old regime only. See what it saves on a ₹15 lakh salary.
Is dividend income taxable in India?
Dividends, interim or final, are added to your income and taxed at your slab rate. See what ₹20,000 or ₹1 lakh of dividend adds to the tax on a ₹15 lakh salary.
Is education loan interest tax deductible?
Education loan interest is deductible in full under Section 80E, old regime only, for up to 8 years. On a ₹15 lakh salary, ₹1 lakh of interest saves ₹31,200.
Is savings account interest taxable in India?
Savings interest is taxed at your slab rate. The old regime lets you deduct ₹10,000 of it, or ₹50,000 with deposits at 60+. The new regime allows nothing.
What is the standard deduction for salaried employees?
Salaried people and pensioners deduct ₹75,000 in the new regime and ₹50,000 in the old, with no proof needed. What it is worth at ₹8 lakh to ₹30 lakh.
Is the employer’s NPS contribution tax-free in the new regime?
Employer NPS stays deductible in the new regime, up to 14% of basic + DA. On a ₹20 lakh salary with ₹8 lakh basic, ₹1,12,000 of it cuts the tax by ₹23,296.
How much income tax does a senior citizen pay in India?
At 60 the old regime’s tax-free limit rises to ₹3 lakh, and at 80 to ₹5 lakh. The new regime is the same at every age. Worked tax on pensions of ₹6–15 lakh.
Missed the ITR deadline? What a belated return costs
A late return for 2025-26 can still be filed by 31 December 2026: a ₹5,000 fee, or ₹1,000 up to ₹5 lakh income, plus interest, and only on the new regime.
Do I need my landlord’s PAN to claim HRA?
Only when rent paid in the year is over ₹1 lakh, about ₹8,333 a month. What to give your employer, what to do if the landlord has no PAN, and what is at stake.
Will the new labour code reduce my take-home salary?
Only if your basic was under half your CTC and PF is paid on full wages. On ₹10 lakh at 30% basic, in-hand falls ₹4,000 a month and all of it goes into your PF.
How much tax on a Diwali bonus?
A Diwali bonus is taxed as salary. The extra tax on a ₹1 lakh bonus at salaries from ₹8 lakh to ₹30 lakh, both regimes, and why it costs most near ₹12 lakh.
Is Bengaluru a metro city for HRA in 2026-27?
Yes. From 1 April 2026, Rule 279 gives Bengaluru, Hyderabad, Pune and Ahmedabad the 50% HRA limb, old regime only. The rule, the eight cities, a worked example.
Can I claim HRA and home loan together?
Yes, HRA and home loan can be claimed together in the old regime. Old vs new tax with both claimed on ₹12, ₹15 and ₹20 lakh salaries, on FY 2026-27 rules.
Is Section 80C gone under the new Income-tax Act?
Section 80C is not gone. The Income-tax Act 2025 renumbers it as Section 123 from FY 2026-27 — same ₹1.5 lakh limit, same investments, old regime only.
How do I save tax in the new regime?
Almost every deduction is gone under the new regime. Employer NPS under 80CCD(2) is the main one left — worth ₹13,104 to ₹46,800 depending on your salary.
Is a ₹12 lakh salary really tax-free?
₹12 lakh of taxable income pays nil tax under the new regime — which is ₹12,75,000 of gross salary after the standard deduction. Full working, both regimes.
How much PF is deducted from my salary?
EPF is 12% of PF wages from you and 12% from your employer — basic, or half your pay if basic is less. Capped at the ₹25,000 wage ceiling, ₹3,000 a month each.
CTC, gross and in-hand salary: what each term means
Definitions: CTC is what your employer spends, gross is what is payable to you, in-hand is what reaches your bank, LPA is the unit. All three on ₹15 lakh.
Can I claim HRA if I pay rent to my parents?
Yes: rent paid to your parents qualifies for HRA exemption if they own the home, the rent is genuinely paid and they declare it. The rules, proof and maths.
Free calculators
In-Hand Salary Calculator
CTC to monthly take-home — EPF, new-regime tax and professional tax included.
Tax Regime Calculator (New vs Old)
FY 2026-27 tax regime calculator — enter salary and deductions, see new vs old tax side by side.
HRA Exemption Calculator
How much of your HRA is tax-free — the least-of-three rule, computed instantly.
Advance Tax Calculator
Tax year 2026-27 — each instalment, its due date, and whether any advance tax is due at all.
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