Estimate annual ordinary-salary income tax and a simple monthly TDS average for tax year 2026-27. The estimate assumes an Indian resident under 60 with salary income only. It does not cover special-rate income, surcharge, arrears relief or tax already withheld by a previous employer.
Salary tax estimate
The Income-tax Act 2025, amended by Finance Act 2026 provides the relevant rules in sections 19, 156 and 202. This page uses tax year 2026-27. AY 2026-27 belongs to FY 2025-26 and is not an interchangeable label.
New-regime steps
- Deduct the eligible standard deduction, up to ₹75,000, from salary.
- Apply progressive rates at ₹4/8/12/16/20/24 lakh taxable-income boundaries: 0/5/10/15/20/25%, then 30% above ₹24 lakh.
- Apply the eligible resident rebate up to ₹12 lakh taxable ordinary income, limited to ₹60,000.
- Just above ₹12 lakh, apply rebate marginal relief where pre-cess tax exceeds the income above that threshold.
- Add 4% health and education cess. Divide by twelve only for an illustrative equal-month withholding average.
At ₹15 lakh gross salary, the ₹75,000 deduction leaves ₹14.25 lakh taxable income. Slab tax is ₹93,750; including cess it is ₹97,500, or ₹8,125 per month in this simplified illustration.
Important boundaries
At ₹12 lakh taxable ordinary income, the eligible new-regime rebate reduces tax to zero. At ₹12.10 lakh, marginal relief limits pre-cess tax to the ₹10,000 excess; with cess the illustration is ₹10,400. Salary of ₹12.75 lakh can therefore produce nil tax if the only adjustment is the ₹75,000 standard deduction, but a CTC of that size is a different measure.
The old-regime widget applies only a ₹50,000 standard deduction and the resident-under-60 slab/rebate model. Entered gross salary is not automatically reduced by HRA exemption, PF, other eligible investments or medical-insurance deductions. Complete those checks separately before choosing a regime.
From annual tax to payroll TDS
Actual withholding can change with joining dates, prior-employer income/TDS, bonuses, approved declarations and remaining pay periods. Reconcile year-to-date tax and use the employer’s approved process. The CTC calculator separately models employer costs, employee contributions and PT, while the payroll workflow explains review before finalisation.