At this salary
- No income tax under the new regime: taxable income of ₹3,82,981 (after the ₹75,000 standard deduction) is within the ₹12 lakh rebate limit of section 156.
- Your PF wage of ₹20,833 a month is between ₹15,000 and ₹25,000, the band brought under mandatory EPF coverage when the wage ceiling rose on 17 September 2026.
- The old regime is already no costlier here, even without extra deductions.
How far you are from paying income tax
With this salary structure, a CTC up to about ₹13.91 lakh pays no income tax under the new regime. You have roughly ₹8.91 lakh of raises left before tax starts.
If your employer contributes 14% of basic to NPS (deductible under section 124(1) even in the new regime), the tax-free CTC rises to about ₹15.07 lakh.
PF is your biggest deduction
With no income tax at this salary, your own PF of ₹2,500 a month (6.0% of CTC) is the main thing between gross and in-hand, along with professional tax in some states.
Your PF wage of ₹20,833 is at or below the ₹25,000 ceiling, so capping PF at the ceiling would not lower it.
What the next ₹1 lakh of CTC is worth
Moving from ₹5 lakh to ₹6 lakh adds ₹85,596 a year to your in-hand (₹7,133 a month). Of the extra ₹1 lakh, ₹0 goes to income tax and the rest to PF, gratuity and employer PF.
Monthly payslip: new vs old regime
Typical month from September 2026, no professional tax, no extra old-regime deductions.
| Item | New regime | Old regime |
|---|---|---|
| Basic | ₹20,833 | ₹20,833 |
| HRA | ₹8,333 | ₹8,333 |
| Special allowance | ₹8,998 | ₹8,998 |
| Gross salary | ₹38,165 | ₹38,165 |
| Your PF | −₹2,500 | −₹2,500 |
| Income tax (TDS) | ₹0 | ₹0 |
| In-hand (before professional tax) | ₹35,665 | ₹35,665 |
Yearly tax on ₹5 LPA
| Step | New regime | Old regime |
|---|---|---|
| Gross salary | ₹4,57,981 | ₹4,57,981 |
| Deductions | −₹75,000 | −₹80,000 |
| Taxable income | ₹3,82,981 | ₹3,77,981 |
| Tax on slabs | ₹0 | ₹6,399 |
| Rebate (s.156) | −₹0 | −₹6,399 |
| Cess (4%) | ₹0 | ₹0 |
| Total tax | ₹0 | ₹0 |
Old regime deductions counted: Standard deduction ₹50,000; s.123 (old 80C), incl. your PF ₹30,000.
Professional tax on ₹5 LPA, by state
| State | Per month | Per year | In-hand (new regime) |
|---|---|---|---|
| West Bengal | ₹150 | ₹1,800 | ₹35,515 |
| Telangana | ₹200 | ₹2,400 | ₹35,465 |
| Gujarat | ₹200 | ₹2,400 | ₹35,465 |
| Maharashtra | ₹200 | ₹2,500 | ₹35,465 |
| Karnataka | ₹200 | ₹2,500 | ₹35,465 |
| Madhya Pradesh | ₹208 | ₹2,500 | ₹35,457 |
PF on ₹5 LPA
| PF calculated on | Your PF a month | In-hand (new regime) |
|---|---|---|
| Full PF wage (₹20,833) | ₹2,500 | ₹35,665 |
| Statutory ceiling (₹25,000) | ₹2,500 | ₹35,665 |
Worked example
Fixed monthly CTC ₹41,667: basic ₹20,833 (50%), HRA ₹8,333, employer PF ₹2,500, gratuity ₹1,002, leaving a special allowance of ₹8,998. Gross salary ₹38,165 a month, or ₹4,57,981 a year. After the ₹75,000 standard deduction, taxable income is ₹3,82,981 and tax is ₹0. Monthly in-hand: ₹38,165 − ₹2,500 PF − ₹0 TDS = ₹35,665.
Neighbouring salaries
| CTC | In-hand a month (new regime) |
|---|---|
| ₹4 LPA | ₹28,532 |
| ₹35,000 a month | ₹29,959 |
| ₹40,000 a month | ₹34,238 |
| ₹5 LPA | ₹35,665 |
| ₹45,000 a month | ₹38,518 |
| ₹6 LPA | ₹42,798 |
| ₹7 LPA | ₹49,931 |
Assumptions
- Basic 50% of fixed CTC, HRA 40% of basic, employer PF and gratuity inside CTC, PF on the full basic, no variable pay.
- PF and gratuity wages follow the Labour Code 50% rule (it does not change anything at a 50% basic).
- Use the calculator above to match your offer letter.