1. What is In-Hand Salary?

In-Hand Salary is the actual amount an employee takes home after all deductions. It's calculated by subtracting all statutory and non-statutory deductions from the gross salary (Basic Pay + Allowances).

2. How Does the Calculator Work?

The calculator uses the following formula:

Where:

• Basic Pay - Fixed component of salary (before deductions)
• Allowances - Additional payments like HRA, DA, special allowances
• Income Tax - Tax deducted as per income tax slabs
• Provident Fund - Employee's contribution to retirement fund
• Professional Tax - State-level tax on employment

3. Components of Salary Calculation

Basic Pay: Forms the core of the salary, typically 40-50% of CTC. Affects other components like PF and gratuity.

Allowances: Various components like House Rent Allowance (HRA), Dearness Allowance (DA), etc., that are partially or fully taxable.

Deductions: Mandatory deductions include Income Tax, Provident Fund (PF), and Professional Tax (varies by state).

4. Using the Calculator

Tips: Enter all amounts in INR. For monthly calculations, multiply monthly figures by 12 for annual amounts. Ensure all values are non-negative.

5. Frequently Asked Questions (FAQ)

Q1: Is basic pay the same as gross salary?
A: No, gross salary includes basic pay plus all allowances before any deductions.

Q2: How is income tax calculated?
A: Income tax is calculated based on annual income tax slabs set by the government.

Q3: What's the current PF contribution rate?
A: Typically 12% of basic pay, but this may vary based on company policy.

Q4: Is professional tax the same across India?
A: No, professional tax rates vary by state, with maximum typically ₹2,500/year.

Q5: Are all allowances taxable?
A: Some allowances like HRA have partial exemptions, while others are fully taxable.