Formula
gross = CTC − employer PF − other employer benefitstaxable = gross − ₹75,000 standard deductiontax = slab tax (new regime) − rebate / marginal relief, plus 4% cesstake-home = gross − employee PF − professional tax − tax
- New-regime slabs: up to ₹4L nil; 4–8L 5%; 8–12L 10%; 12–16L 15%; 16–20L 20%; 20–24L 25%; above 24L 30%
- Rebate: tax is nil up to ₹12 lakh taxable income, with marginal relief just above it
Strip out what is never paid to you, subtract your own deductions, and tax what is left under the new regime.
Worked example
₹18,00,000 CTC
- Annual CTC
- 1,800,000
- Basic pay as % of CTC
- 40 %
- Provident fund (PF)
- 12% of basic, capped at ₹15,000 basic per month
- Professional tax per year
- 2,400
- Currency symbol
- ₹ Rupee (INR)
Estimated monthly take-home
₹1,34,007.73
Estimated annual take-home: ₹16,08,092.80
Income tax + cess (estimated): ₹1,46,307.20
Take-home as a share of CTC: 89.3%
How it works
CTC is what the employer spends on you, not what reaches your bank. Employer PF and benefits sit inside it, so gross salary is smaller. From gross, employee PF and professional tax come off, then income tax at slab rates on taxable income (gross less the ₹75,000 standard deduction), plus 4% health and education cess.
For example, a ₹18,00,000 CTC with 40% basic and PF on the ₹15,000 monthly ceiling gives a gross of ₹17,78,400, taxable income of ₹17,03,400, tax and cess of about ₹1,46,307, and an average take-home of roughly ₹1.34 lakh a month. A salary of up to ₹12.75 lakh (₹12 lakh taxable plus the ₹75,000 standard deduction) pays no income tax at all because of the section 87A rebate.
This is an estimate. It leaves out old-regime deductions (80C, HRA), employer NPS, income from other sources, surcharge above ₹50 lakh and company-specific pay components, and variable pay is spread evenly although it is paid out irregularly. Use your payslip for the real figure. For the hike itself see Salary Hike Percentage Calculator, and to plan what to do with your take-home see SIP Calculator and EMI Calculator.
Assumptions and limits
- New tax regime for individuals; FY 2026-27 slabs, ₹75,000 standard deduction, rebate up to ₹12 lakh taxable income and 4% cess.
- Surcharge is not modelled: above ₹50 lakh taxable income the tool warns you the real tax is higher.
- Professional tax is not deductible in the new regime and is simply subtracted from take-home.
Rules, sources and review date
- Applies to
- Income tax, new regime, individuals — FY 2026-27 (assessment year 2027-28) — India
- Effective from
- 1 Apr 2026
- Last checked
- 3 Oct 2026
- Sources
- Note
- Checked against published summaries on the date shown; the official portal is the authority. Slabs, rebate and deductions change with each Union Budget.