Methodology · FY 2026-27
How we calculate your in-hand salary
Most salary calculators hide their assumptions, which is why different websites give you different answers for the same CTC. We publish ours in full. If our number differs from another site's, this page tells you exactly why.
The formula
Step 1 — Gross salary Gross salary = Annual CTC − Employer PF − Gratuity
Step 2 — Monthly in-hand Monthly in-hand = (Gross salary − Employee PF − Professional tax − Income tax) ÷ 12
Where:
- Basic salary = your chosen % of CTC (default 40%).
- Employer PF = 12% of PF wages. PF wages are your basic salary, capped at ₹25,000/month if you choose the capped option (the statutory EPF wage ceiling, raised from ₹15,000 by Gazette notification S.O. 5109(E) with effect from 17 September 2026), or your full basic if you choose the full-basic option.
- Gratuity = 4.81% of annual basic salary (the standard 15/26 formula). Many employers include gratuity inside CTC even though it is paid only when you leave after 5 years of service — we follow the CTC as stated.
- Employee PF = the same amount as employer PF.
- HRA is displayed as 50% of basic so you can see a typical salary structure. It is part of gross salary. We do not compute an HRA exemption — see "What this model does not do" below.
Income tax — new regime, FY 2026-27
| Taxable income slab | Rate |
|---|---|
| ₹0 – ₹4,00,000 | Nil |
| ₹4,00,000 – ₹8,00,000 | 5% |
| ₹8,00,000 – ₹12,00,000 | 10% |
| ₹12,00,000 – ₹16,00,000 | 15% |
| ₹16,00,000 – ₹20,00,000 | 20% |
| ₹20,00,000 – ₹24,00,000 | 25% |
| Above ₹24,00,000 | 30% |
- Standard deduction: ₹75,000.
- Section 87A rebate: up to ₹60,000 of tax is rebated when taxable income is ₹12,00,000 or less — this is why a CTC of about ₹12 lakh can result in zero tax.
- Marginal relief: just above ₹12,00,000 of taxable income, we cap the tax at the amount by which income exceeds ₹12,00,000, if that is lower than the slab tax.
- Health & education cess: 4% on the tax after rebate.
Income tax — old regime, FY 2026-27
| Taxable income slab (age below 60) | Rate |
|---|---|
| ₹0 – ₹2,50,000 | Nil |
| ₹2,50,000 – ₹5,00,000 | 5% |
| ₹5,00,000 – ₹10,00,000 | 20% |
| Above ₹10,00,000 | 30% |
- Standard deduction: ₹50,000.
- Section 80C deduction: ₹1,50,000, assumed fully used. Your employee PF contribution is assumed to form part of this ₹1.5 lakh; it is not deducted a second time.
- Section 87A rebate: up to ₹12,500 when taxable income is ₹5,00,000 or less.
- Health & education cess: 4%.
Professional tax
Professional tax is a small state tax deducted by your employer, charged on your monthly gross salary. The schedules below were verified against official sources in November 2026; the source for each is named in our project README. The constitutional cap on professional tax is ₹2,500 per year. State schedules change through state notifications — if your payslip shows a different figure, your payslip is right for you.
- Maharashtra (schedule in force since 1 April 2023) is gender-differentiated. Men: up to ₹7,500/month nil; ₹7,501–₹10,000 ₹175/month; above ₹10,000 ₹200/month, except ₹300 in February — ₹2,500/year. Women: up to ₹25,000/month nil; above ₹25,000 the same ₹200/month and ₹300-in-February pattern. This is why the calculator asks for your gender.
- Karnataka (Karnataka Act 33 of 2025, from 1 April 2025): nil below ₹25,000/month; at ₹25,000 and above, ₹200/month except ₹300 in February — ₹2,500/year. There is no lower slab tier.
- West Bengal (new schedule from 1 October 2026, Notification 1607-F.T.): up to ₹20,000/month nil; ₹20,001–₹30,000 ₹100/month; ₹30,001–₹50,000 ₹140/month; ₹50,001–₹1,00,000 ₹170/month; above ₹1,00,000 ₹208/month.
- Tamil Nadu: professional tax here is a local-body levy — each corporation, municipality and panchayat sets its own rates within statutory bands, so there is no single statewide schedule. We use the Greater Chennai Corporation schedule as the reference: a half-yearly amount based on your half-yearly income — up to ₹21,000 nil; ₹21,001–₹30,000 ₹180; ₹30,001–₹45,000 ₹425; ₹45,001–₹60,000 ₹930; ₹60,001–₹75,000 ₹1,025; above ₹75,000 ₹1,250 per half-year — and spread it evenly across months (half-yearly amount ÷ 6 per month). If you work elsewhere in Tamil Nadu, your local body's amount may differ.
- Kerala: we use the published schedule in the Kerala profession-tax rules. That schedule is the maximum-rate schedule under the rules — individual local bodies may levy less than the maximum, so your employer's deduction can legitimately be lower than our figure. Kerala also levies half-yearly, spread evenly across months here.
- Odisha: professional tax was repealed by the Odisha Ordinance 02 of 2026 with effect from 1 April 2026, so it is nil.
- Delhi has no professional tax. For the remaining states in the calculator's list we use the commonly published schedules.
What this model does not do
Read this before trusting any number — ours or anyone else's.
- No HRA exemption. If you pay rent and declare it, your old-regime tax can be meaningfully lower than shown. Our old-regime number is therefore a cautious (higher-tax) estimate for renters. For reference, the exemption's 50%-of-basic metro limit now covers eight cities — Mumbai, Kolkata, Delhi, Chennai, Hyderabad, Pune, Ahmedabad and Bengaluru — from 1 April 2026 (CBDT Notification 22/2026, Rule 279 of the Income-tax Rules, 2026), with 40% elsewhere; this model does not use that list at all, because it does not compute an HRA exemption.
- No other deductions in the old regime: no 80D (medical insurance), no home-loan interest, no 80CCD (NPS), no leave-travel or other exemptions. Only the standard deduction and the flat ₹1,50,000 80C assumption are applied.
- Professional tax is not deducted from taxable income in this model, though the law allows it under the old regime. The effect is small (at most a few hundred rupees of tax a year).
- No surcharge. Taxable income above roughly ₹50 lakh attracts a surcharge in reality; our figures will understate tax at very high incomes.
- No bonus or variable pay. Enter your fixed CTC. Variable pay is taxed in the month it is paid and changes monthly in-hand amounts.
- Rounding: figures are rounded to the nearest rupee. The statutory rounding of total tax to the nearest ₹10 is not applied.
- PF ceiling note: we use the ₹25,000/month EPF wage ceiling for the "capped" option — the ceiling was raised from ₹15,000 with effect from 17 September 2026 (Gazette S.O. 5109(E)), so the capped PF contribution is now ₹3,000/month. If your employer contributes on a different wage base, choose the full-basic option or expect a difference.
Disclaimer
This website provides estimates for general information only. It is not tax advice, financial advice, or a substitute for your employer's payroll calculation or a chartered accountant. Actual in-hand salary varies with your salary structure, declarations, investment proofs, rent, joining date and employer policies. Tax rules are as published for FY 2026-27 and are checked when rules change; always confirm important decisions against the Income Tax Department's official publications or your payslip.