Complete Guide: Tax, GST & Salary in India
GST Calculator: Simplifying India's Goods and Services Tax
India's Goods and Services Tax (GST), introduced on July 1, 2017, unified the complex pre-existing indirect tax structure (excise duty, service tax, VAT, CST) into four main slabs: 5%, 12%, 18%, and 28%. A fifth category — 0% — covers essentials like unprocessed food and healthcare. The GST Calculator on MasterCalc handles both the "add GST" (computing the GST-inclusive price from the base price) and "remove GST" (extracting the base price from a GST-inclusive price) operations. It also splits the total GST into CGST + SGST (for intra-state transactions) or IGST (for inter-state transactions) — a distinction critical for correct GST filing on GSTN.
Common GST rates for quick reference: restaurants (5% without ITC, 18% for AC restaurants), mobile phones (18%), automobiles (28% + cess), healthcare services (0%), education (0%), professional services like accounting and legal (18%), construction (18% on affordable housing; 5% for non-affordable under-construction), and hotel rooms above ₹7,500/night (18%). Knowing the correct rate before issuing invoices avoids costly compliance errors.
Income Tax Calculator: Old Regime vs New Regime 2025–26
India offers taxpayers a choice between the Old Tax Regime (with deductions like 80C, 80D, HRA, LTA) and the New Tax Regime (lower slab rates, but most deductions unavailable). The Union Budget 2025 brought significant changes: the new regime now offers a basic exemption of ₹4 lakh (up from ₹3 lakh) and a rebate under Section 87A up to ₹60,000, making income up to ₹12 lakh effectively tax-free for most salaried individuals under the new regime. The Income Tax Calculator on MasterCalc computes your total tax liability, including surcharge and Health & Education Cess (4%), under both regimes simultaneously — so you can instantly see which is more beneficial for your income and investment profile.
- New Regime slabs (FY 2025–26): ₹0–4L: Nil; ₹4–8L: 5%; ₹8–12L: 10%; ₹12–16L: 15%; ₹16–20L: 20%; ₹20–24L: 25%; Above ₹24L: 30%
- Old Regime slabs: ₹0–2.5L: Nil; ₹2.5–5L: 5%; ₹5–10L: 20%; Above ₹10L: 30%
- Standard deduction: ₹75,000 for salaried employees under new regime; ₹50,000 under old regime
- Surcharge: 10% for income ₹50L–1Cr; 15% for ₹1Cr–2Cr; 25% for ₹2Cr–5Cr; 37% above ₹5Cr (capped at 25% for new regime)
HRA Exemption: Maximising Your House Rent Allowance
House Rent Allowance (HRA) is one of the most significant salary components for salaried employees living in rented accommodation, available under the Old Tax Regime. The HRA exemption under Section 10(13A) is the minimum of three amounts: (1) Actual HRA received; (2) 50% of basic salary (for metro cities: Mumbai, Delhi, Kolkata, Chennai) or 40% (for non-metro cities); (3) Actual rent paid minus 10% of basic salary. The HRA Exemption Calculator computes all three limits and shows the exempt amount, helping you determine whether to opt for the old regime primarily on the strength of this deduction.
An important compliance note: if your annual rent exceeds ₹1 lakh (₹8,333/month), you must submit your landlord's PAN to your employer to claim HRA exemption. If the landlord is a family member, the transaction must be genuine — with actual rent payments and proper documentation — to survive income tax scrutiny.
Salary Calculator: From CTC to In-Hand Pay
The gap between Cost-to-Company (CTC) and actual in-hand (take-home) salary surprises many Indian job joiners. A ₹12 LPA CTC can translate to anywhere from ₹72,000 to ₹85,000 per month in-hand depending on the salary structure. The Salary Calculator deconstructs a given CTC into its components — basic, HRA, special allowance, PF (employer contribution 12% of basic), professional tax (state-specific, up to ₹2,400/year), and any variable pay — and computes the net monthly take-home after all statutory deductions and estimated income tax under both regimes.
Professional tax rates vary by state: Maharashtra charges ₹200/month (₹2,400/year) for incomes above ₹10,000/month; Karnataka charges ₹200/month for incomes above ₹25,000/month; Tamil Nadu charges ₹208/month for the highest slab. Employees' PF deduction is 12% of basic salary (up to ₹15,000 basic cap for mandatory compliance, though many companies deduct on actual basic). The CTC-to-in-hand salary calculator accounts for all these state-specific nuances.
Gratuity Calculator: Know Your Entitlement
Gratuity is a statutory retirement benefit payable under the Payment of Gratuity Act, 1972, to employees who have completed at least 5 years of continuous service with an employer. The formula for calculating gratuity for covered employees is: Gratuity = (Last Drawn Monthly Salary × 15 × Years of Service) ÷ 26. The "15" represents 15 days of salary per year of service, and "26" represents the working days in a month (excluding Sundays). The Gratuity Calculator on MasterCalc computes both the gratuity amount and the tax treatment — gratuity received from a covered employer is fully exempt up to ₹20 lakh; amounts received from non-covered employers are exempt up to ₹20 lakh or half-month salary per year of service, whichever is lower.
Stamp Duty Calculator: The Often-Overlooked Property Cost
Stamp duty is a state government tax levied on the registration of property documents and is typically the second-largest cost in a property transaction after the property price itself. Rates vary significantly by state: Maharashtra charges 5% (with 1% metro cess in municipal corporation areas); Karnataka 5.6%; Delhi 6% (men), 4% (women); Tamil Nadu 7%; Rajasthan 5–6%. The Stamp Duty Calculator on MasterCalc covers major Indian states and computes the stamp duty and registration fee (typically 1% of market value) on any property transaction, helping buyers include this cost in their down payment planning.
Beyond residential property, stamp duty applies to commercial property, rental agreements (up to 0.25% of total rent for lease deeds in many states), and various commercial instruments. In Maharashtra, leave and licence agreements (LLAs) for rentals are commonly registered with stamp duty computed on total consideration — the calculator handles this use case as well.
Section 80C and Key Tax Deductions Under the Old Regime
- Section 80C (₹1.5 lakh limit): EPF, PPF, ELSS funds, life insurance premium, home loan principal, NSC, 5-year tax-saving FD, tuition fees.
- Section 80D (health insurance premium): ₹25,000 for self/spouse/children; additional ₹25,000 for parents (₹50,000 if parents are senior citizens).
- Section 80CCD(1B) (NPS): Extra ₹50,000 deduction over and above 80C limit.
- Section 24(b) (home loan interest): Up to ₹2 lakh/year for self-occupied property; unlimited for let-out property.
- Section 80TTA/80TTB: ₹10,000 exemption on savings bank interest for general taxpayers; ₹50,000 for senior citizens (includes FD interest).
Year-end tax planning checklist for salaried Indians
Smart tax planning in India is a January–March activity for most employees. Submit your regime choice to HR in April, track 80C investments through the year, and reconcile in December before the proof deadline. Use the Income Tax Calculator monthly when bonus or ESOP income arrives — it can push you into a higher slab unexpectedly. Freelancers mixing salary with consulting income should combine both in one annual estimate and check advance tax due dates (15 June, 15 September, 15 December, 15 March).
GST-registered small businesses must file GSTR-1 and GSTR-3B on time even when tax liability is zero — late fees accumulate quickly. Keep purchase invoices for ITC claims aligned with GSTR-2B before you file. Master Calc GST tools help with invoice math; compliance filing still needs your CA or GST portal login.
Salary restructuring with your employer — shifting components between basic, HRA and special allowance — can change HRA exemption and PF contributions. Model scenarios with the Salary Calculator before accepting a new offer letter. Gratuity and leave encashment on job change are often overlooked in annual tax estimates; use the Gratuity Calculator when negotiating exit terms.