Cost to Company (CTC) includes various components such as basic salary, allowances, PF contributions, gratuity, and other benefits. However, the in-hand salary (take-home pay) is what remains after deductions for tax.
Income Tax Slab Calculator: The Union Budget 2025-26 has introduced several changes to the income tax regime, providing substantial relief to middle-class professionals. The revised tax slabs under the new regime offer significant savings while ensuring simplified tax compliance.
New Income Tax Slabs for FY 2025-26
|
Annual Income
|
Tax Rate
|
|
Rs 0 – Rs 4 lakh
|
NIL
|
|
Rs 4 – Rs 8 lakh
|
5%
|
|
Rs 8 – Rs 12 lakh
|
10%
|
|
Rs 12 – Rs 16 lakh
|
15%
|
|
Rs 16 – Rs 20 lakh
|
20%
|
|
Rs 20 – Rs 24 lakh
|
25%
|
|
Above Rs 24 lakh
|
30%
|
Previous Financial Year (2024-25) Tax Slabs
|
Annual Income
|
Tax Rate
|
|
Rs 0 – Rs 3 lakh
|
NIL
|
|
Rs 3 – Rs 7 lakh
|
5%
|
|
Rs 7 – Rs 10 lakh
|
10%
|
|
Rs 10 – Rs 12 lakh
|
15%
|
|
Rs 12 – Rs 15 lakh
|
20%
|
|
Above Rs 15 lakh
|
30%
|
How Much Can an Individual Earning Rs 15 Lakhs Save?
According to Priyank Shah, co-founder & CEO of The Financialist, a salaried individual earning Rs 15 lakhs annually will benefit from the new regime,
Calculation Under New Regime:
- Gross Salary: Rs 15,00,000
- Standard Deduction: Rs 75,000
- Taxable Income: Rs 14,25,000
Tax liability breakdown:
- 0 – Rs 4 lakh: No tax
- Rs 4 – Rs 8 lakh: 5% on Rs 4 lakh = Rs 20,000
- Rs 8 – Rs 12 lakh: 10% on Rs 4 lakh = Rs 40,000
- Rs 12 – Rs 14.25 lakh: 15% on Rs 2.25 lakh = Rs 33,750
Total Tax Payable: Rs 1,05,750
Calculation Under the Previous Regime (2024-25):
- 0 – Rs 3 lakh: No tax
- Rs 3 – Rs 7 lakh: 5% on Rs 4 lakh = Rs 20,000
- Rs 7 – Rs 10 lakh: 10% on Rs 3 lakh = Rs 30,000
- Rs 10 – Rs 12 lakh: 15% on Rs 2 lakh = Rs 30,000
- Rs 12 – Rs 15 lakh: 20% on Rs 3 lakh = Rs 60,000
Total Tax Payable: Rs 1,40,000
Comparison: Previously, an individual with the same income would have paid approximately Rs 1.4 lakh in taxes. Under the new regime, the savings amount to Rs 35,000.
CTC vs. In-Hand Salary
Cost to Company (CTC) includes various components such as basic salary, allowances, PF contributions, gratuity, and other benefits. However, the in-hand salary (take-home pay) is what remains after deductions for:
- Income tax (as per the applicable slab)
- Employee Provident Fund (EPF) contributions
- Other deductions (e.g., professional tax, insurance, etc.)
With the tax savings under the new regime, middle-class professionals will have higher disposable income, leading to better financial planning and investment opportunities.
Conclusion
“The new tax regime simplifies the tax structure while offering tangible savings for salaried professionals. With lower tax rates and a higher standard deduction, individuals earning up to Rs 12.75 lakh will have no tax liability, and those earning Rs 15 lakh will save Rs 35,000 annually. These changes make tax planning easier, ensuring more take-home income and financial stability for the middle class,” Shah concluded.
