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METHOD AND SOURCES

India salary calculator: method and sources

How the India calculator derives its figures, which legal sources each value comes from, and what it deliberately does not model.

Last reviewed: 2026-10-04.

Scope

The calculator covers a resident salaried individual with salary income only, for FY 2025-26 (AY 2026-27) and FY 2026-27 (AY 2027-28), under both the new regime (section 115BAC, the default) and the old regime. It models the standard deduction, the section 87A rebate, surcharge with marginal relief, the health-and-education cess, the employee provident fund, employee state insurance and state professional tax. It does not model house property, capital gains, HRA/LTA exemptions or every Chapter VI-A deduction.

Calculation chain

  1. Annualise the gross monthly salary and deduct the standard deduction (75,000 under the new regime, 50,000 under the old regime).
  2. Under the old regime, also deduct any Chapter VI-A amount entered and, where applicable, the senior or super-senior basic exemption.
  3. Apply the published slab table to the taxable income.
  4. Apply the section 87A rebate where the taxable income is within the regime threshold.
  5. Apply surcharge on the tax for high incomes, with marginal relief, then the 4 percent health-and-education cess.
  6. Round the total under section 288B to the nearest ten rupees, and divide by twelve for the monthly withholding under section 192.
  7. Deduct the employee provident fund (12 percent of basic, capped at a 15,000 wage ceiling unless a higher basic is chosen), employee state insurance while eligible (0.75 percent up to a 21,000 ceiling) and the state professional tax. Add the employer provident fund and state insurance to employer cost.

Formulas

Exact decimal arithmetic is used throughout; money is never affected by floating-point error. Let x be the annual taxable income.

  • Annual gross = monthly gross × 12. Any pay basis (hour, day, year) is first converted to a monthly gross.
  • Taxable income = annual gross − standard deduction (75,000 new / 50,000 old) − Chapter VI-A deduction (old regime only).
  • Slab tax, new regime: 0 up to 4,00,000; 5% of (x − 4,00,000) up to 8,00,000; 20,000 + 10% of (x − 8,00,000) up to 12,00,000; 60,000 + 15% of (x − 12,00,000) up to 16,00,000; 1,20,000 + 20% of (x − 16,00,000) up to 20,00,000; 2,00,000 + 25% of (x − 20,00,000) up to 24,00,000; 3,00,000 + 30% of (x − 24,00,000) above.
  • Slab tax, old regime (below 60): 0 up to 2,50,000; 5% of (x − 2,50,000) up to 5,00,000; 12,500 + 20% of (x − 5,00,000) up to 10,00,000; 1,12,500 + 30% of (x − 10,00,000) above. Senior (60–80) and super-senior (80+) basic exemptions are 3,00,000 and 5,00,000.
  • Section 87A rebate = min(slab tax, 60,000) if x ≤ 12,00,000 under the new regime, or min(slab tax, 12,500) if x ≤ 5,00,000 under the old regime; otherwise 0.
  • Surcharge = rate × (slab tax − rebate), where the new-regime rate is 10% above 50,00,000, 15% above 1,00,00,000 and 25% above 2,00,00,000, and the old regime adds 37% above 5,00,00,000. Marginal relief caps the total at the threshold total plus the income above the threshold.
  • Health-and-education cess = 4% × (slab tax − rebate + surcharge).
  • Total annual tax = (slab tax − rebate + surcharge + cess) rounded under section 288B to the nearest ten rupees. Monthly TDS = total ÷ 12.
  • EPF = 12% × min(basic, 15,000), where basic = basic% × gross. ESI = 0.75% × gross while gross ≤ 21,000, else 0. Professional tax = the state's income-dependent slab. Net = gross − EPF − ESI − professional tax − monthly TDS.

Worked example

Monthly gross 1,50,000, new regime, no Chapter VI-A deductions.

  1. Annual gross = 1,50,000 × 12 = 18,00,000.
  2. Taxable income = 18,00,000 − 75,000 = 17,25,000.
  3. Slab tax = 1,20,000 + 20% × (17,25,000 − 16,00,000) = 1,20,000 + 25,000 = 1,45,000.
  4. Rebate = 0 (taxable income above 12,00,000). Surcharge = 0 (taxable income below 50,00,000).
  5. Cess = 4% × 1,45,000 = 5,800.
  6. Total = 1,50,800 (already a multiple of ten). Monthly TDS = 1,50,800 ÷ 12 = 12,566.67.
  7. EPF at 50% basic = 12% × 15,000 = 1,800; ESI = 0; professional tax = state slab (0 for “Others”).
  8. Net = 1,50,000 − 12,566.67 − 1,800 = 1,35,633.33.

Sources

  • Income Tax Department, Salaried Individuals AY 2026-27: slab tables for both regimes, section 87A rebate, surcharge rates and marginal relief, and the 4 percent cess. Page last reviewed 09 July 2026.
  • Memorandum to the Finance Bill, 2026 (indiabudget.gov.in): states no change to the First Schedule rates, so FY 2026-27 uses the same slabs, rebate, surcharge and cess as FY 2025-26.
  • Income Tax Act, 1961: sections 115BAC, 192, 288B and the Finance Acts for the standard deduction.
  • Employees' Provident Funds and Miscellaneous Provisions Act, 1952 (EPF Scheme 1952) and the Employees' State Insurance Act, 1948: contribution rates.
  • State professional-tax statutes: jurisdiction-dependent monthly amounts.

Validation

The shipped browser engine is checked against an independent Python reference implementation on a persona matrix that covers zero income, the 87A rebate boundary under both regimes, senior and super-senior slabs, the surcharge bands with marginal relief, the EPF and ESI wage ceilings, state professional tax and a Chapter VI-A deduction. The reference is itself checked against hand-derived vectors from the published slab, rebate, surcharge and cess rules. The Income Tax Department's own calculator is a closed browser application that could not be automated at build time, so the reference is statute-derived; this is recorded as an open item.

Known limitations

  • Only salary income is modelled.
  • State professional-tax amounts are indicative and must be confirmed against the state schedule (deviation D-IN-02).
  • The employee provident fund is modelled at 12 percent of a basic that defaults to 50 percent of gross, capped at 15,000; actual structures vary.
  • The result is decision support, not tax advice. Confirm the figures with a licensed tax professional.

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