Transparency builds trust. This page lists the rules behind the salary and tax numbers, plus what the calculators deliberately simplify.
Income tax: FY 2026-27 (AY 2027-28), salaried individuals
New regime (default)
- Slabs: nil up to ₹4L; 5% to ₹8L; 10% to ₹12L; 15% to ₹16L; 20% to ₹20L; 25% to ₹24L; 30% above.
- Standard deduction: ₹75,000. Employer NPS (80CCD(2)) up to 14% of basic.
- Section 87A rebate up to ₹60,000, so taxable income up to ₹12L is tax-free, with marginal relief just above it.
Old regime
- Slabs: nil up to ₹2.5L; 5% to ₹5L; 20% to ₹10L; 30% above.
- Standard deduction ₹50,000; HRA exemption; 80C up to ₹1.5L; 80CCD(1B) up to ₹50,000; 80D; home-loan interest up to ₹2L; employer NPS up to 10% of basic; professional tax.
- Section 87A rebate up to ₹12,500 for taxable income up to ₹5L.
Both regimes
- 4% health & education cess on tax plus surcharge.
- Surcharge of 10% above ₹50L, 15% above ₹1Cr, 25% above ₹2Cr (and 37% above ₹5Cr in the old regime; capped at 25% in the new regime), each with marginal relief.
Salary structure (CTC mode)
- Defaults: basic 40% of CTC, HRA 50% of basic, no bonus. Basic, HRA, bonus, PF and NPS can each be entered as a percentage or as a rupee amount (per year or per month); the two forms always agree.
- Special allowance is the balancing item: CTC minus every other component. If your components add up to more than your CTC, we say so instead of showing a result that does not add up.
- Provident fund: 12% of basic, or capped at a ₹15,000 basic (12% of ₹15,000 = ₹1,800 a month), or a custom percentage or amount. Your deduction equals the employer contribution. Voluntary PF is an extra deduction from your pay and counts under 80C in the old regime.
- Gratuity is 4.81% of its base. The base can be basic (default), “wages” (at least 50% of total pay, which many employers now use, computed as 50% of CTC excluding the gratuity itself, or basic if that is higher), or a custom figure you enter from your offer. It sits inside CTC but is paid only when you leave.
- Employer NPS comes out of your CTC (it reduces the special allowance) and goes into your NPS account, so it is never part of your in-hand pay. For tax it is counted as salary and then deducted under 80CCD(2), up to 14% of basic (new regime) or 10% (old regime); anything above that limit is taxed. Employer PF plus NPS above ₹7.5 lakh a year is also treated as taxable. We show what NPS costs you in take-home and saves you in tax.
- Bonus / variable pay is part of CTC at its target value. You can set an expected payout percentage; only the paid amount is taxed and received. We show your fixed monthly in-hand separately and the bonus after tax, using the extra tax caused by the bonus.
- Professional tax is worked out from the state you pick (Karnataka, Maharashtra, Telangana, Andhra Pradesh, Gujarat, West Bengal, Madhya Pradesh, Kerala, or none for Delhi, Haryana, UP and Rajasthan), using published FY 2026-27 slabs on your fixed monthly pay. For any other state you enter it yourself. States revise slabs, so your payslip is the final word. It is deductible only in the old regime.
Tax working
The “How your tax is calculated” card shows every step for the selected regime: gross salary, the standard deduction and other deductions, taxable income, tax on each slab, the section 87A rebate or marginal relief, surcharge, 4% cess, and the monthly TDS.
Payslip mode
You enter your monthly basic, HRA, other allowances, PF and any bonus expected for the year. We annualise them, compute tax under both regimes, and, if you enter the TDS your employer deducts, compare it with the tax expected for your declared deductions.
Old-regime deductions
- HRA: least of actual HRA, rent minus 10% of basic, and 50% of basic in Delhi, Mumbai, Kolkata, Chennai, Bengaluru, Hyderabad, Pune or Ahmedabad (the last four were added from FY 2026-27 by the Income-tax Rules 2026), or 40% of basic anywhere else. LTA: limited to the LTA in your salary.
- 80C up to ₹1.5 lakh (your PF counts first), 80CCD(1B) up to ₹50,000, 80D up to ₹25,000 for self and ₹25,000 for parents (₹50,000 each if 60 or older), home-loan interest up to ₹2 lakh, plus 80E, 80G, 80DD/80U and other amounts you enter.
Other calculators
- EMI: reducing-balance formula, with optional monthly or one-time prepayments, a processing fee (plus 18% GST) shown as the rate you really pay, and loan eligibility from a share of take-home pay.
- FD and RD: tenure in years, months and days; interest compounds for each full period and the leftover days earn simple interest, as banks do. Payout FDs pay uncompounded interest. RD instalments compound quarterly. Tax at your slab rate plus 4% cess, and the TDS limits of ₹50,000 (₹1,00,000 for senior citizens), are estimates.
- SIP: the yearly return is an effective yearly rate converted to a monthly rate, with each instalment at the start of the month; an option uses return ÷ 12 per month instead. Goal planning solves for the starting SIP. Equity tax is 12.5% on gains above ₹1.25 lakh (20% if held a year or less), shown as if everything is sold at the end.
- Gratuity: (last basic + DA) × 15 ÷ 26 × years for employees covered by the Act, where more than 6 months of a part-year counts as a full year, with a ₹20 lakh limit, 1-year eligibility for fixed-term staff and the 50%-of-pay wages rule under the labour codes in force from 21 November 2025. Employees not covered use ÷ 30 and completed years. Government employees use a quarter of pay per completed six months, up to 16.5 months.
- HRA: least of actual HRA, rent minus 10% of basic, and 50% or 40% of basic, for the months you paid that rent, with the metro list for the financial year you choose.
- FIRE: the corpus needed is the larger of spending ÷ withdrawal rate and the amount that lasts to your plan end at your post-retirement return. Spending and any pension rise with inflation.
- Rent vs buy: both paths spend the same cash each month and the cheaper one invests the difference. Optional: 12.5% tax on home and investment gains, and the old-regime home-loan tax benefit (interest up to ₹2 lakh, principal up to ₹1.5 lakh).
- Move abroad: take-home pay in each country is worked out for a person on a salary with no dependants, using 2026 rules: US federal tax, Social Security and Medicare plus the state or city you pick; Canadian federal and provincial tax with CPP and EI; UK (England) income tax and National Insurance; German income tax (tax class 1), solidarity surcharge and social insurance, without church tax; Australian resident tax and the Medicare levy (2026-27); Singapore resident tax; and no income tax in the UAE. Tax thresholds rise with inflation. A partner’s income is taxed separately as a single person. Retirement accounts (401(k), RRSP, UK pension, superannuation, and your provident fund in India at 8.25%) count toward net worth, without tax on withdrawal. Rent and living costs are starting estimates you should replace. Savings compound in each place’s own currency and are converted to rupees at the exchange rate you set, which can weaken each year. Foreign rules change often and have many special cases, so confirm with a professional.
- Return to India: for each year you might return, savings abroad grow at your return and are converted at the exchange rate you set, less transfer costs and tax on profits; what you hold in India is added and the cost of settling back is subtracted. Life in India is then run year by year with inflation, any job income after Indian tax and your return, to find the smallest starting amount that lasts to the end of your plan. Retirement accounts are either left abroad (and counted from the age you choose, after tax) or cashed out with tax and any early-withdrawal penalty. Indian tax on foreign income, residential status and disclosure rules are not modelled.
- Net worth score, offer comparison, salary hike and life simulator: educational models with their assumptions stated on each page. They are not predictions.
Tax year
Rules are for FY 2026-27 (AY 2027-28). Reports on Budget 2026 indicate no change to slabs, the standard deduction, the section 87A rebate, surcharge or cess compared with FY 2025-26, so the same values apply. Please confirm against the official Finance Act and the Income Tax Department website before relying on them for filing.
What is not included
Dearness allowance, tax on employee PF interest above ₹2.5 lakh of contributions, other income such as interest or rent, reimbursements, arrears, capital-gains tax, TDS timing differences, state-specific rules, NPS beyond the 80CCD(1B) amount you enter, and leave-encashment effects are not modelled. Real payslips can differ.
Quality checks
The tax engine has automated tests for known values, rebate and relief boundaries, and a sweep across incomes up to ₹30 crore in both regimes. If tax law changes in a Budget, the rules live in a single file so they can be updated quickly.
See something wrong? Contact us.