How we calculate your take-home
Every figure on CalcBuddy comes from one transparent engine — no hidden assumptions. This page lays out exactly how we go from your CTC to a monthly in-hand number, for FY 2026-27 (AY 2027-28), so you can sanity-check it against your own payslip.
Financial year and source
Rates are for FY 2026-27. Budget 2026 retained FY 2025-26 slabs unchanged. Verified against Income Tax Dept (incometax.gov.in) & ClearTax, July 2026. We re-verify the slabs, rebate and deductions once a year against the Income Tax Department and don’t edit them from memory. Last updated 2026-07-02.
How we split your CTC
Indian offer letters quote a cost-to-company (CTC) that bundles cash salary with employer retirals. We break it up using widely-used, transparent assumptions:
- Basic = 50% of CTC.
- HRA = 50% of Basic in metro cities, 40% non-metro.
- Employer PF = 12% of Basic, and gratuity = 4.81% of Basic — both part of CTC but not taxable salary income.
- Employee PF (EPF) = 12% of Basic — deducted from your salary and paid into your provident fund, per EPFO rules.
- Special allowance= whatever’s left after the above — the balancing figure.
New regime tax
The default regime: lower rates, a ₹75,000 standard deduction, and almost no other exemptions. The Section 87A rebate makes income up to ₹12,00,000 taxable effectively tax-free, with marginal relief just above that threshold.
Old regime tax
Higher rates, but deductions count. Our old-regime figure is a best-case estimate: it assumes you claim the ₹1,50,000 80C limit in full, ₹25,000 under 80D (health insurance), the ₹50,000 standard deduction, and the HRA exemption from any rent you enter. The Section 87A rebate here covers income up to ₹5,00,000 taxable. If you claim less than the maxed deductions, your real old-regime tax is higher than shown.
Cess, professional tax and surcharge
- A 4% health & education cess is added on top of income tax in both regimes.
- Professional tax of ₹2,400 a year (state levy) is subtracted from your cash in-hand.
- Surcharge applies only once taxable income crosses ₹50 lakh, with marginal relief at each threshold. Most salaried users never reach it.
The in-hand formula
Annual in-hand = gross salary income − employee EPF − professional tax − (income tax + cess). We divide by 12 for the monthly figure. Employer PF and gratuity are excluded because they never reach your salary account.
Who’s behind the numbers
CalcBuddy is a free, independent calculator. We don’t sell your data, we store nothing you enter, and we have no incentive to nudge you toward one regime — the engine simply reports whichever leaves more in your hand. The rules above are public and sourced so you can check them yourself.
Estimates only — not tax or financial advice. Your actual pay depends on your company’s exact salary structure and your declared investments. Confirm with a qualified advisor before making decisions.