Salary Calculator

The INDmoney in-hand salary calculator helps estimate your monthly net salary after deductions, providing a clear view of your take-home pay for better financial planning.
Select tax regime

Old Tax Regime

New Tax Regime (FY 2023-24)

What is a Salary Calculator?

A Salary Calculator is a powerful tool designed to help you estimate your take-home pay after deductions. It considers various components like Basic Salary, HRA, and more, while factoring in deductions like Provident Fund (PF), Professional Tax, Income Tax, Gratuity, and Home Loan Interest. With this tool, you can get a clear picture of your actual earnings.

How to Use INDmoney’s In-Hand Salary Calculator

Navigating your way through INDmoney's In Hand Salary Calculator is a breeze, allowing you to swiftly estimate your take-home pay with precision. Follow these simple steps to make the most of this user-friendly tool:

Step 1: Enter Your Details
Begin by entering your essential information:

- Yearly CTC: Enter your annual Cost to Company (CTC), the sum of all your components.

- Basic Salary: A part of the CTC which is completely taxable.

- Select Tax Regime: Choose your In-Hand Salary Calculation according to the tax regime you prefer (New vs. Old).

Step 2: Submit Your Details

After entering the necessary information, click on the 'Calculate' button.

Step 3: Instant Calculation

Watch as the magic happens! INDmoney's calculator will process your details and instantly present you with a comprehensive salary breakdown:

- Take-Home Salary: Your net earnings after all deductions and taxes.

- HRA: Housing-related allowance, if applicable.

- Professional Tax: State government-imposed tax on earnings.

- EPF: Employee Provident Fund contributions, typically Rs 1800/month by default.

- Income Tax: Amount deducted as per the chosen tax regime.

- Medical Insurance: Provided by the company as a part of CTC for employee health benefits.

Step 4: Edit and Update

Want to know your exact in-hand salary? No problem! Feel free to update the given components, and the changes will reflect in the amount accordingly. As you make changes, the calculator works its magic once again, instantly updating your take-home salary and component details.

Gross Pay and Take Home Salary

- Gross Pay: Calculated by subtracting EPF and Gratuity amounts from the Cost-to-Company (CTC).

- Take Home Salary: Calculated by eliminating Income Tax from the Gross Pay.

Components of Salary

1. Basic Salary

  • Definition: The core component of an employee's salary, forming 40-50% of the total compensation.
  • Taxation: Fully taxable.
  • Role: Forms the basis for other salary components and benefits.

2. House Rent Allowance (HRA)

  • Definition: An allowance provided for rental expenses.
  • Exemption: Partially or fully exempt under Section 10(13A) if the employee lives in rented accommodation.
  • Conditions: Fully taxable if the employee does not reside in rented accommodation.

3. Leave Travel Allowance (LTA)

  • Definition: An allowance for travel expenses incurred during leave.
  • Exemption: Available under Section 10(5) for travel within India, provided proof of travel is submitted.
  • Conditions: Can be claimed twice in a block of four years.

4. Special Allowance

  • Definition: Additional allowance for specific purposes such as attire, academic materials, or internet subscription.
  • Taxation: Fully taxable.
  • Role: Covers expenses not included in other allowances.

5. Bonus

  • Definition: Performance-based incentive.
  • Taxation: Fully taxable.
  • Role: Usually provided annually as a reward for meeting performance targets.

6. Employee Provident Fund (EPF)

  • Definition: A retirement benefits scheme where both employer and employee contribute 12% of the employee’s basic salary.
  • Taxation: Employee contributions are deductible under Section 80C. Employer contributions are exempt up to a certain limit.
  • Role: Provides financial security post-retirement.

7. Professional Tax

  • Definition: State-level tax on employment.
  • Taxation: Varies by state, with a maximum limit of ₹2,500 per year.
  • Role: Deducted from the employee’s salary by the employer.

8. Gratuity

  • Definition: A lump sum paid upon retirement or resignation after five years of continuous service.
  • Exemption: Exempt up to ₹20 lakhs under Section 10(10) for non-government employees.
  • Role: Recognizes long-term service.

Key Insights

  • Tax Implications: Understanding the tax treatment of each component helps in efficient tax planning.
  • Benefit Utilization: Employees should maximize the use of tax-exempt allowances and deductions to reduce taxable income.
  • Salary Structure Optimization: Employers can design salary packages to offer tax advantages and enhance employee satisfaction.

By comprehensively understanding these components, both employees and employers can make informed decisions that optimize financial and tax outcomes.


Benefits of Using a Salary Calculator

Accurate Budgeting

  • Estimates Take-Home Pay: Helps calculate your net income after taxes and deductions.
  • Realistic Budgeting: Assists in managing monthly expenses and savings effectively.

Informed Decision-Making

  • Job Offers and Appraisals: Shows salary structure changes with new compensation packages.
  • Financial Planning: Enables decisions based on potential earnings, cost of living adjustments, and tax implications.

Negotiation Leverage

  • Clear Breakdown: Provides detailed gross vs. net pay insights.
  • Empowers Negotiations: Ensures compensation discussions are based on accurate financial needs and expectations.

Frequently Asked Questions

What if my company provides additional benefits like stock options or allowances not listed in the calculator?

While the calculator covers common salary components, there might be unique benefits provided by your company that are not included. In such cases, you can still use the calculator to estimate the major components and then add the additional benefits separately.


 

How can I use the calculator to optimize my tax savings?

By using the calculator, you can assess the impact of different tax regimes and understand how various components affect your take-home pay and taxable income. This can help you make strategic decisions to maximize your tax savings through investments and deductions.

Does CTC include PF?

Cost to Company (CTC) is the ultimate representation of an employee's total value to an organization. It covers all expenses, including the Employer's Provident Fund (PF) contribution and Gratuity. The CTC formula is simple:

CTC = Gross Salary + Employer's PF Contribution + Gratuity

This formula unveils the full extent of an employee's worth, considering not only the Gross Salary but also additional contributions that contribute to a complete compensation package.


 

Should I opt for New Tax Regime or stick to the Old?

The New Tax Regime offers lower tax rates without considering exemptions and deductions, simplifying the tax structure. In contrast, the Old Tax Regime retains existing tax slabs with exemptions and deductions that can lower your taxable income

Consider your financial situation and the exemptions you currently avail. If you have substantial exemptions, the Old Regime might be beneficial. However, if you prefer simplicity and can manage without certain exemptions, the New Regime might lead to lower taxes.


 

Can I file my income tax return without Form 16?

Form 16 is an essential document provided by employers to salaried employees in India. It contains details about the employee's income, deductions, and taxes deducted at source (TDS) during a financial year.

You can file your income tax return without Form 16. You can use other documents like salary slips, bank statements, and investment proofs to calculate your income and taxes.


 

What is Section 80C deduction?

Section 80C of the Income Tax Act allows individuals to claim deductions on specific investments and expenses, reducing their taxable income. It covers investments in EPF, Public Provident Fund (PPF), National Savings Certificates (NSC), and more


 

What information do I need to use a salary calculator?

You will need your gross salary, details of any bonuses or other income, information about deductions such as provident fund or health insurance premiums, and knowledge of applicable tax exemptions and deductions.
 

Can a salary calculator help me with tax planning?

 Yes, a salary calculator can help you plan your taxes by showing how different deductions and exemptions can affect your taxable income and, consequently, your tax liability.
 

Is the use of a salary calculator secure?

Most reputable salary calculators ensure user privacy and do not store personal information. However, always make sure you are using a secure and reliable platform.
 

Can a salary calculator help me with tax planning?

Yes, a salary calculator can help you plan your taxes by showing how different deductions and exemptions can affect your taxable income and, consequently, your tax liability

What information do I need to use a salary calculator?

You will need your gross salary, details of any bonuses or other income, information about deductions such as provident fund or health insurance premiums, and knowledge of applicable tax exemptions and deductions.
 

How do I use a salary calculator?

 To use a salary calculator, input your gross salary, specify any additional income like bonuses, select your tax exemptions and deductions, and choose the appropriate tax regime. The calculator will then compute your net take-home pay.