1. What is the New Tax Regime?

The new tax regime offers lower tax rates but removes most deductions and exemptions. It's optional for individuals to choose between the old and new regimes when filing ITR.

2. How Salary Calculation Works

The calculator uses the following formula:

Where:

• Gross Salary — Total salary before any deductions
• Income Tax — Calculated under new regime tax slabs
• Provident Fund — Typically 12% of basic salary
• Professional Tax — State-specific tax, usually ₹200/month

3. Components of Salary Deduction

Income Tax: Calculated based on new regime slabs (2023-24):

• Up to ₹3 lakh: 0%
• ₹3-6 lakh: 5%
• ₹6-9 lakh: 10%
• ₹9-12 lakh: 15%
• ₹12-15 lakh: 20%
• Above ₹15 lakh: 30%

Provident Fund: Employee contributes 12% of basic salary (default in calculator).

Professional Tax: Varies by state, typically ₹200/month (₹2400/year).

4. Using the Calculator

Tips: Enter gross annual salary, PF percentage (default 12%), and monthly professional tax (default ₹200). The calculator will show detailed breakdown of deductions and net salary.

5. Frequently Asked Questions (FAQ)

Q1: Should I choose old or new tax regime?
A: New regime benefits those with fewer investments/deductions. Compare both scenarios before deciding.

Q2: Is PF contribution mandatory?
A: For organizations with 20+ employees, PF is mandatory for employees earning up to ₹15,000 basic salary.

Q3: Are there any deductions in new regime?
A: Only standard deduction of ₹50,000 is available. All other deductions (80C, HRA, etc.) are removed.

Q4: How accurate is this calculator?
A: It provides estimates based on standard deductions. Actual salary may vary based on company policies.

Q5: What's not included in this calculation?
A: Bonuses, perks, other allowances, and deductions like ESIC are not considered.