Editorial Standards & Methodology

1. Who We Are

SalaryTruth is an independent salary intelligence platform built for Indian salaried professionals. We are not affiliated with any employer, recruitment agency, insurance company, or financial product provider. Our tools are free and supported by advertising.

Our editorial team consists of finance professionals with backgrounds in Indian income tax, HR compensation structures, and EPF compliance. All content is reviewed for accuracy before publication and updated when tax rules change.

Contact for corrections: hello@salarytruth.in — we respond to factual correction requests within 48 hours.

2. Tax Constants Used — FY2024-25

All calculations are based on the following official constants for Assessment Year 2025-26 (Financial Year 2024-25):

New Tax Regime Slabs (Section 115BAC)

• Standard deduction (New regime): ₹75,000 — increased from ₹50,000 by Finance Act 2024 (Budget 2024)
• Section 87A Rebate: Full rebate if net taxable income ≤ ₹7,00,000 under new regime (effective zero tax)
• Health & Education Cess: 4% on income tax + surcharge
• Default regime: New regime is default from AY2024-25 onwards

EPF / PF Constants

• Employee contribution rate: 12% of basic salary
• Employer contribution rate: 12% of basic salary (3.67% to EPF + 8.33% to EPS)
• Statutory wage ceiling: ₹15,000/month — per EPFO circular
• Maximum statutory PF deduction: ₹1,800/month (12% × ₹15,000)
• Interest rate FY2024-25: 8.25% per annum — per CBT resolution March 2024

3. Calculation Methodology

CTC to In-Hand Calculator

Our CTC to in-hand calculation follows this sequence:

1. Derive monthly basic salary: CTC × basic% ÷ 12
2. Derive monthly HRA: Basic × HRA%
3. Calculate employer PF: 12% × min(basic, ₹15,000) — subtracted from CTC if opted-in
4. Calculate gratuity deduction: 4.81% of basic annually — subtracted if opted-in
5. Gross monthly = (CTC − employer PF annual − gratuity annual) ÷ 12
6. Taxable income = gross annual − standard deduction − HRA exemption (if rent declared)
7. Apply tax slabs + 4% cess, check 87A rebate
8. Monthly TDS = annual tax ÷ 12
9. In-hand = gross monthly − employee PF − TDS − professional tax

HRA Exemption

Calculated per Section 10(13A) read with Rule 2A of the Income Tax Act:

Exempt HRA = MIN of:
(1) Actual HRA received
(2) 50% of basic (metro) or 40% (non-metro)
(3) Rent paid − 10% of basic

Metro cities per Income Tax Act: Mumbai, Delhi, Kolkata, Chennai only. Bengaluru, Hyderabad, Pune are non-metro for HRA purposes.

4. Data Sources & References

• Income Tax Income Tax Act 1961, Finance Act 2024 (Union Budget 2024-25), CBDT circulars — incometaxindia.gov.in
• EPF / PF Employees' Provident Fund & Misc. Provisions Act 1952, EPFO circulars — epfindia.gov.in
• Professional Tax State Finance Acts — Karnataka (₹200/month), Maharashtra (₹200/month), Tamil Nadu, West Bengal. Delhi and Haryana have no professional tax.
• Gratuity Payment of Gratuity Act 1972 — 4.81% of basic salary annually (15 days per year of service on 26-day month basis)
• HRA Section 10(13A), Income Tax Act 1961 · Rule 2A, Income Tax Rules 1962

5. Limitations & Disclaimers

• All calculations are estimates for informational purposes only. Your actual salary, tax liability and deductions depend on your specific employment contract, company HR policies, and individual declarations to your employer.
• We use a standard salary structure for CTC breakdowns (40% basic, 50% HRA of basic). Your employer may use a different structure — always verify with your payslip or HR.
• Tax calculations do not account for mid-year salary changes, arrears, perquisites, capital gains, rental income, or other income sources outside salary.
• We do not provide personalised tax, financial, or legal advice. For individual tax planning, consult a qualified Chartered Accountant.
• Surcharge calculations for high-income individuals (above ₹50 lakh taxable income) use the capped new regime rates. Individual circumstances may vary.

6. Update Policy

We review and update all tax constants and calculation logic:

• After Union Budget — typically February each year
• After EPFO notifications — EPF interest rate updates, wage ceiling changes
• When errors are reported — we correct verified errors within 48 hours

To report a calculation error, email hello@salarytruth.in with the specific tool, the values you entered, and what you believe the correct result should be.