Description

The following have changed as part of thenewbudget.
1. Conveyance allowance is raised from 800 to 1,600/-permonth.
2. Personal Medical Insurance limit has been raised from 15,000to20,000/-
No changes have been maded to the Income Tax Slabs and rates inthenew budget.
How is the Take Home Salary calculated?
We made this Calculator so that no one will ever need to manuallydotheir salary calculations! However, the below explanationisprovided for those who want to understand how the calculationsaredone.
Step 1. Determine Gross Salary:
Before we can calculate the Net Salary, we should firstdeterminethe Gross salary. Gross Salary is obtained by subtractingtheEmployer's contribution Provident Fund contribution(EPF)andGratuity from Cost to Company(CTC).

Gross Salary = Cost to Company(CTC) - Employer'sPFContribution(EPF) - Gratuity.

Step 2. Determine Taxable Income: Taxable income is obtainedbysubtracting Conveyance Allowance, House Rent Allowance(HRA),LeaveTravel Allowance(LTA) Professional Tax, Medical Bills,MedicalInsurance, Tax Saving Investments .

Taxable Income = Gross Salary - Employee's PF Contribution(PF)-Conveyance Allowance - HRA - LTA - Medical Bills -MedicalInsurance - Tax. Saving Investments - Other Deductions.

Step 3. Calculate Income Tax: Calculate Income tax byapplyingIncome Tax Slabs and rates. Apply 2% Educational cess and1% Higherand Secondary cess to the income tax .

Step 4. Calculate Take Home Salary; Subtract the IncomeTax,Provident Fund (PF) and Professional Tax from theGrossSalary(determined in step 1).

Take Home Salary = Gross Salary - Income Tax - Employee'sPFContribution(PF) - Prof. Tax.

Calculated values may not match with your payslip duethefollowing reasons:
1. Your variable pay is paid quarterly, so you will not havethesame take home each month, in the months the variable pay ispaid,your take home salary will be more than the calculated value.Inother months, it would be less than the calculated amount.

2. Your CTC includes your variable pay, as the nameindicatesvariable pay amount differs based on various factors. Thiswillcause your CTC to vary, this will have a knock-on effect onyourtake home. You can correct his by adjusting your CTC to matchtheactual amounts in variable pay. For example, if your CTC is ₹15Lakhs which includes a variable pay of ₹ 2 lakhs, however youonlyreceived ₹ 1 lakh as part of your variable pay for thisfinancialyear. In this case enter your CTC as ₹ 14 lakhs foraccuratecalculations.

3. The Salary Calculator calculates your PF and EPF to be 12%ofyour Basic Pay and Gratuity as 4.81% of Basic Pay. If your PFispaid as a different percentage, you need to enter the actualmountpaid to you in the PF field for accurate calculations.