How to Calculate Salary, Take-Home, HRA Exemption, Tax (2026 Guide)
How to calculate salary, take-home, HRA exemption, income tax. Components, formulas, examples, tools. Free salary calculator.
Understanding how salary is calculated is important for both employees and employers. In this guide, we cover how to compute take-home, HRA exemption, and income tax.
Components of Salary
Salary = Basic + HRA + Special Allowance + Other Allowances. Each component has different tax treatment.
Take-Home Calculation
Take-Home = Gross Salary - Employee PF - Professional Tax - Income Tax. Income tax depends on the regime + total income + deductions.
HRA Exemption (Old Regime)
HRA is exempt to the minimum of:
- HRA received from employer
- Rent paid - 10% of basic salary
- 50% of basic (metro) / 40% of basic (non-metro)
Example
Sample: Basic ₹50,000/month, HRA ₹25,000/month, Rent paid ₹20,000/month, Metro (Delhi/Mumbai).
- HRA received: ₹25,000
- Rent paid - 10% basic: ₹20,000 - ₹5,000 = ₹15,000
- 50% of basic: ₹25,000
- Minimum of 3: ₹15,000 (exempt HRA)
- Taxable HRA: ₹25,000 - ₹15,000 = ₹10,000
Income Tax (New Regime, FY 2025-26)
| Income | Rate |
|---|---|
| Up to ₹4L | Nil |
| ₹4L-₹8L | 5% |
| ₹8L-₹12L | 10% |
| ₹12L-₹16L | 15% |
| ₹16L-₹20L | 20% |
| ₹20L-₹24L | 25% |
| >₹24L | 30% |
A resident with taxable income up to ₹12 lakh gets a Section 87A rebate of up to ₹60,000, so with the ₹75,000 standard deduction a salary of up to ₹12.75 lakh pays no tax. Add 4% health and education cess to any tax payable.
Income Tax (Old Regime, FY 2025-26)
| Income | Rate |
|---|---|
| Up to ₹2.5L | Nil |
| ₹2.5L-₹5L | 5% |
| ₹5L-₹10L | 20% |
| >₹10L | 30% |
Standard Deduction
New regime: ₹75,000. Old regime: ₹50,000. From gross salary, before computing tax.
Example: Take-Home for ₹10 LPA
| Item | Value |
|---|---|
| CTC | ₹10,00,000 |
| Employer PF | ₹48,000 |
| Gratuity (provisioned) | ₹19,231 |
| Gross Salary | ₹9,32,769 |
| Standard Deduction | ₹75,000 (new) / ₹50,000 (old) |
| Taxable income, new regime | ₹8,57,769 |
| Taxable income, old regime (after ₹2,500 professional tax and ₹1.5 lakh 80C, which includes employee PF) | ₹7,30,269 |
| New regime tax | Nil (₹25,777 slab tax fully covered by the 87A rebate) |
| Old regime tax (with 4% cess) | ₹60,896 |
| Employee PF | ₹48,000 |
| Professional Tax (state-specific, up to ₹2,500) | ₹2,500 |
| Net Take-Home, new regime | ₹8,82,269 (about ₹73,500 a month) |
| Net Take-Home, old regime | ₹8,21,373 (about ₹68,450 a month), before any 80C investment outflow beyond PF |
Tools
- Income Tax Calculator: https://corporatewalla.com/resources/tools/income-tax-calculator
- Salary Calculator: https://corporatewalla.com/resources/tools/salary-calculator
- HRA Calculator: https://corporatewalla.com/resources/tools/hra-calculator
- Gratuity Calculator: https://corporatewalla.com/resources/tools/gratuity-calculator
Frequently Asked Questions
Q: What is the take-home for ₹10 LPA?
A: On the structure in our example (basic 40% of CTC, PF on full basic), about ₹73,500 a month under the new regime, where tax is nil after the rebate, and about ₹68,450 under the old regime. It depends on the salary structure, the state's professional tax and the regime.
Q: How is HRA calculated?
A: HRA exempt = minimum of (HRA received, rent paid - 10% of basic, 50% of basic for metro / 40% for non-metro).
Q: Should I choose old or new regime?
A: Depends on your deductions. Use our Income Tax Calculator to compare. Typically: new regime for lower deductions, old regime for higher deductions.
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