How Much Tax Do You Really Pay on Your Salary in India? (Explained Simply)

Every Indian employee knows the feeling: you see a big “CTC” in your offer letter and a much smaller number in your bank account.

Let’s decode where the money actually goes.

1. Understand your salary structure

Your salary isn’t one lump sum. It has parts:

Basic Salary – forms the largest chunk, fully taxable.

HRA (House Rent Allowance) – partly exempt if you pay rent.

Special Allowance – fully taxable.

PF (Provident Fund) – 12% of your basic salary goes to savings.

Bonus or Incentives – taxed as income.

2. The income tax slabs for FY 2024–25 (New Regime)

Income Range Tax Rate

Up to ₹3,00,000 0%
₹3,00,001 – ₹6,00,000 5%
₹6,00,001 – ₹9,00,000 10%
₹9,00,001 – ₹12,00,000 15%
₹12,00,001 – ₹15,00,000 20%
Above ₹15,00,000 30%

Plus 4% health and education cess.

If your income is below ₹7 lakh under the new regime, you get full rebate — meaning zero tax.

3. New Regime vs Old Regime — which is better?

Old regime allows more deductions (80C, 80D, HRA, etc.)

New regime has lower tax rates but fewer deductions.

Use an online salary tax calculator to compare both before filing.

4. Key deductions to reduce tax (if under old regime)

Section 80C – up to ₹1.5 lakh via PPF, ELSS, LIC, PF

Section 80D – health insurance premium

Section 80TTA – savings account interest (up to ₹10,000)

HRA exemption – if you pay rent

5. How to check your TDS and Form 26AS

Log into the Income Tax Portal.
Check “Form 26AS” or “AIS” — it shows how much tax your employer has already deducted.

Final Thought

Taxes aren’t theft; they’re the cost of civilization. But overpaying due to ignorance? That’s optional.

Understand your payslip, plan your deductions, and make your salary work smarter — not smaller.