# Salary Calculator India (salaryinhand.in) — Full Technical Documentation & Tax Rules

> Domain: https://salaryinhand.in
> Last Updated: September 2026
> Applicable Financial Year: FY 2026-27 (Assessment Year 2027-28)
> Scope: Indian Payroll, Income Tax (Direct Taxes), EPF, ESI, Gratuity, HRA, and Equity Compensation.

---

## 1. Income Tax Slab Rates (FY 2026-27 / AY 2027-28)

### New Tax Regime (Section 115BAC — Default)
- Up to ₹4,00,000: Nil (0%)
- ₹4,00,001 to ₹8,00,000: 5%
- ₹8,00,001 to ₹12,00,000: 10%
- ₹12,00,001 to ₹16,00,000: 15%
- ₹16,00,001 to ₹20,00,000: 20%
- ₹20,00,001 to ₹24,00,000: 25%
- Above ₹24,00,000: 30%

**Key Provisions:**
- Standard Deduction: ₹75,000 (flat for salaried employees and pensioners).
- Section 87A Rebate: Maximum ₹60,000 rebate if taxable income is <= ₹12,00,000. Effectively makes income up to ₹12.75 LPA CTC zero tax.
- Health & Education Cess: 4% on (Income Tax + Surcharge).
- Surcharge: 10% for income > ₹50L to ₹1Cr; 15% for > ₹1Cr to ₹2Cr; 25% for > ₹2Cr. Maximum surcharge capped at 25% under New Regime.

### Old Tax Regime (Optional)
- Up to ₹2,50,000: Nil (0%)
- ₹2,50,001 to ₹5,00,000: 5%
- ₹5,00,001 to ₹10,00,000: 20%
- Above ₹10,00,000: 30%

**Key Provisions:**
- Standard Deduction: ₹50,000.
- Section 87A Rebate: Up to ₹12,500 for taxable income <= ₹5,00,000.
- Allowable Deductions: Section 80C (up to ₹1.5L), Section 80D (Health Insurance up to ₹1L), Section 10(13A) HRA, Section 24(b) Home Loan Interest (up to ₹2L), Section 80CCD(1B) NPS (up to ₹50k), Section 16(iii) Professional Tax.

---

## 2. Salary Deductions & Payroll Formulas

### In-Hand Salary Formula
```
In-Hand Salary = Gross Salary - Employee PF - Employee ESI - Professional Tax - Income Tax (TDS)
Gross Salary = CTC - Employer PF - Employer ESI - Gratuity Liability
```

### Basic Salary
Typically structured as 40% to 50% of annual CTC by Indian employers.

### House Rent Allowance (HRA) Exemption — Section 10(13A)
Under Old Regime, the tax-exempt amount is the minimum of:
1. Actual HRA received
2. 50% of Basic (Delhi, Mumbai, Chennai, Kolkata) OR 40% of Basic (all other cities)
3. Total Rent Paid minus 10% of Basic Salary

### Employee Provident Fund (EPF)
- Employee Contribution: 12% of Basic Salary (deducted from gross pay).
- Employer Contribution: 12% of Basic Salary (included inside CTC). Split into 3.67% EPF + 8.33% EPS.
- Statutory Wage Ceiling: ₹15,000/month basic (₹1,800/month contribution cap). Employers may optionally cap contributions at this limit.

### Gratuity Accrual
- Payment of Gratuity Act 1972: Payable after 5 continuous years of service.
- Formula: (15 × Last Drawn Basic × Years of Service) / 26
- Annual CTC provision: ~4.81% of Basic Salary.
- Tax Exemption: Up to ₹20,00,000 lifetime limit.

### Professional Tax (PT)
- Maharashtra: ₹200/month (₹300 in February) = ₹2,500/year.
- Karnataka: ₹200/month = ₹2,400/year.
- Tamil Nadu: ~₹208/month (deducted half-yearly up to ₹2,500/year).
- Delhi: ₹0 (No professional tax).
- Telangana / West Bengal / Others: ₹200/month = ₹2,400/year.

### Employee State Insurance (ESI)
- Applicable when monthly gross wages <= ₹21,000.
- Employee rate: 0.75% of Gross Wages.
- Employer rate: 3.25% of Gross Wages.

---

## 3. Benchmark Calculation: ₹12,00,000 CTC (New Tax Regime)

- Annual CTC: ₹12,00,000
- Basic Salary (50%): ₹6,00,000 (₹50,000/mo)
- HRA (50% of basic): ₹3,00,000 (₹25,000/mo)
- Employer PF (12%): ₹72,000 (₹6,000/mo)
- Gratuity Accrual (4.81%): ₹28,860 (₹2,405/mo)
- Special Allowance (Balancing): ₹1,99,140 (₹16,595/mo)
- Gross Salary: ₹10,99,140 (₹91,595/mo)
- Standard Deduction: -₹75,000
- Taxable Income: ₹10,24,140
- Income Tax before Rebate: ₹42,414
- Section 87A Rebate: -₹42,414 (Taxable income <= ₹12L)
- Net Income Tax: ₹0
- Employee PF (12%): ₹72,000 (₹6,000/mo)
- Professional Tax (Maharashtra/Karnataka): ₹2,400 (₹200/mo)
- **Annual In-Hand Salary: ₹10,24,740**
- **Monthly In-Hand Salary: ₹85,395** (85.4% of CTC)

---

## 4. Equity Compensation (RSU & ESOP) Taxation

- **Stage 1 (Vesting Date):** Perquisite Value = Shares × (FMV on Vest Date - Exercise Price). Taxed as salary income via employer TDS at marginal slab rate.
- **Stage 2 (Sale Date):** Capital Gain = Sale Price - Vesting FMV.
  - Foreign / Unlisted Shares: LTCG (> 24 months) taxed at 12.5% + 4% cess; STCG (<= 24 months) taxed at applicable income tax slab.
  - Indian Listed Shares: LTCG (> 12 months) taxed at 12.5% above ₹1.25 Lakh annual exemption; STCG (<= 12 months) taxed at 20% + 4% cess.

---

## 5. Website URL Sitemap Structure

### Core Tools
- `/` — Main CTC to In-Hand Calculator
- `/calculators` — Directory of all 12 financial calculators
- `/tax-regime-calculator` — New vs Old Tax Regime Calculator
- `/hra-calculator` — Section 10(13A) HRA Exemption Calculator
- `/salary-hike-calculator` — Increment and Appraisal Take-Home Calculator
- `/reverse-salary-calculator` — Desired In-Hand to CTC Calculator
- `/rsu-calculator` — RSU & ESOP Equity Tax Calculator
- `/fire-calculator` — Financial Independence Retire Early Calculator
- `/pf-calculator` — EPF Accumulation & Interest Calculator
- `/gratuity-calculator` — Gratuity Eligibility & Formula Calculator
- `/notice-period-calculator` — Notice Shortfall & Buyout Tax Calculator
- `/sip-calculator` — Step-Up SIP Mutual Fund Compounding Calculator
- `/nps-calculator` — NPS Section 80CCD Pension Calculator
- `/home-loan-calculator` — Salary-based Home Loan EMI & Eligibility Calculator

### Content Repositories
- `/examples` — Hundreds of pre-calculated salary packages (1 to 300 LPA)
- `/examples/[slug]` — e.g. `/examples/12-lpa-in-hand-salary`
- `/city-compare` — Directory of 156 city-to-city salary comparisons
- `/city-compare/[slug]` — e.g. `/city-compare/bangalore-vs-mumbai`
- `/salaries` — 51 professional job role compensation guides
- `/salaries/[slug]` — e.g. `/salaries/software-engineer`
- `/companies` — 50 corporate salary breakdown guides
- `/companies/[slug]` — e.g. `/companies/tcs`
- `/compare` — Tax regime comparison across 29 official LPA brackets
- `/compare/[slug]` — e.g. `/compare/12-lpa-old-vs-new-tax-regime`
- `/faq` — Comprehensive salary, tax, and deduction FAQ hub
- `/blog` — In-depth financial and tax planning articles