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.
