Methodology

We start with your Basic (Basic % × CTC), subtract your employer's PF contribution and an estimated gratuity provision (4.81% of Basic) to get your Gross salary.

From Gross, we subtract the standard deduction (₹75,000 new regime, ₹50,000 old regime) and — under the old regime only — professional tax, your HRA exemption, and 80C/80D deductions, to get taxable income. Professional tax is not deductible under the new regime, though you still pay it. We then apply the FY 2026-27 slabs, minus any rebate you qualify for (including marginal relief just above the new regime's ₹12,00,000 rebate limit), add surcharge above ₹50 lakh of taxable income (with marginal relief at each threshold), and add 4% cess.

Your in-hand pay is Gross minus your own PF contribution, professional tax, and the tax computed above.

We run your CTC through the full salary calculation twice — once using the new regime's slabs and standard deduction, once using the old regime's slabs, standard deduction, and HRA/80C/80D deductions — and compare the resulting in-hand pay.

The new regime has lower rates and a rebate that zeroes out tax up to ₹12,00,000 taxable income (with marginal relief just above it), but no HRA or 80C/80D deductions. The old regime has higher rates but allows those deductions.

At vesting (RSU) or exercise (ESOP), the value you receive is taxed as salary income — the "perquisite." For RSUs, that's the full fair market value at vesting; for ESOPs, it's fair market value minus your exercise price. We estimate the tax on this by comparing your total tax with and without it, at your regime's slab rates.

When you sell, capital gains tax applies on the difference between your sale price and your cost basis — the fair market value at vesting/exercise, never your exercise price or zero. Indian-listed shares use a 12-month holding period for long-term status; foreign or unlisted shares use 24 months.

Under Section 44ADA, 50% of your gross receipts is treated as taxable income — regardless of your actual expenses — as long as you're eligible (receipts under ₹75L if at least 95% comes through digital/banking channels, else ₹50L). This is taxed at your regime's slab rates, without a standard deduction, since it's business income, not salary.

Under the presumptive scheme, your full advance tax liability is payable in a single installment by March 15 — not the standard quarterly schedule.

Notice pay (for any unserved notice period) is taxed as salary income, using your monthly Basic divided by your company's convention (26 or 30) and multiplied by unserved days.

Gratuity uses the 15/26 formula — last drawn Basic × 15/26 × years of service — but only if you've completed 5+ years; below that, no statutory gratuity is due. Up to ₹20,00,000 of gratuity is exempt from tax.

Leave encashment is fully taxable for a mid-career exit — the ₹25,00,000 exemption only applies at retirement.

Retrenchment compensation is an optional fifth component, separate from gratuity — 15 days' pay per completed year of service under the Industrial Relations Code, but only for employees legally classified as a "workman" (broadly, non-managerial, non-supervisory roles). Since most salaried tech/corporate employees aren't covered, it's a toggle you turn on rather than something applied automatically. When included, only the legal-minimum portion (or ₹5,00,000, whichever is lower) is tax-exempt, even if your actual package pays more per year of service.

We estimate total TDS by comparing your tax with and without these severance components added to your other income for the year.