Employer

In Hand Salary Calculator-India

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FAQs

Under the new Tax Regime, below are the tax slabs-

Income Slab Tax Rate
Upto 2,50,000 Nil
From Rs.2,50,001 to Rs.5,00,000 5% + Cess (Rs.12,500 rebate will be available to individuals who have an income of up to Rs.5 lakh under Section 87A of the Income Tax Act, 1961)
From Rs.5,00,001 to Rs.7,50,000 12,500 + 10% of (Taxable income - Rs.5 lakh) + Cess
From Rs.7,50,001 to Rs.10,00,000 37,500 + 15% of (Taxable income - Rs.7.5 lakh) + Cess
From Rs.10,00,001 to Rs.12,50,000 75,000 + 20% of (Taxable income - Rs.10 lakh) + Cess
From Rs.12,50,001 to Rs.15,00,000 1,25,000 + 25% of (Taxable income - Rs.12.5 lakh) + Cess
From Rs 15 lakh and above 1,87,500 + 30% of (Taxable income - Rs.15 lakh) + Cess
Surcharge: 10% of income tax where total income exceeds Rs. 50,00,000.

Cess: 4% of taxable income.

Basic salary for metro cities is generally 40% of total fixed CTC and that of non metro cities is 40%. These are indicative numbers and actually percentages can vary organizaton to organization

Employer's contribution is 12% of annual basic salary.On top of this you can voluntarily have funds deducted from your salary (this is called voluntary provident fund, VPF).An employee can contribute upto 100% of basic salary and dearness allowance(if applicable) in the form of VPF.

You can get tax relief on the interest on home loan upto INR 2 lacs. This is only applicable for home which is fully constructed and not the ones underconstruction.Moreover you can get tax relief on the principal amout paid through EMIs upto 1.5 lacs but this is also applicable in case it is a fully constructed house that you are in possession of .But to claim this deduction, the house property should not be sold within 5 years of possession. Otherwise, the deduction claimed earlier will be added back to your income in the year of sale

Following are the other components:-

House Rent Allowance (HRA): It is a monetary benefit given to employees by companies for expenses related to rented accommodation. It is a fully component if you do not stay in rented property. As a process to claim this as tax free, the employee needs to produce rent receipts showing the rent he/she is paying to the landlord. Employee also needs to product the PAN details of the house owner.

Leave Travel Allowance (LTA):It is a type of allowance which is provided by the employer to his employee who is travelling on leave from work to cover his travel expenses. LTA is an important component of the salary of the employee as it is eligible for income tax exemption as per the Income Tax Act, 196. You can claim LTA twice within a block of 4 years but not more than once in one calendar year.

Special Allowance: Special allowance is a fixed amount that is given to employees over and above the basic salary in order to meet certain requirements. It is a taxable component.

Professional Tax: It is a tax collected by the state governments in India. It is a direct tax and the maximum amount payable per year is INR 2,500.

Gratuity is a lump sum amount paid by the employer to the employee as a token of appreciation for the services they have provided towards the company.It is the monetary amount which is payable to the employee of an organisation under the Payment of Gratuity Act 1972.An employee is eligible to receive the gratuity amount only after they complete a period of 5 or more years with the company.

"Employers use a simple mathematical formula to calculate the gratuity amount they will be paying their employee. The gratuity formula is shown here: Gratuity Amount = Y x S x 15/26 Where Y – Number of years worked in the organisation, S – Last drawn salary including Dearness Allowance So for example, if an employee has been working for a company for 10 years and the last drawn basic salary including DA is INR 20000, then the gratuity amount will be: Gratuity Amount = 10 x 20000 x 15/26 = INR 1,15,385"

The amount of gratuity received by ant employee if below INR 20 lacs is exempt from the income tax.

In the Interim Budget of 2019, interim finance minister Mr. Piyush Goyal announced an increase in the existing tax-free gratuity limit to Rs.30 lakh.

You can see it in Form 16, Form 16 is issued by the company, it contains details such as; salary earned by the employee and the amount of tax deducted. You can also see it in Form 26AS on the Incometax website.

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