Salaried employee — regime

The engine supports both new and old tax regimes (§115BAC). Compare mode returns net values for both.

New regime slabs (FY 2026-27)

Up to ₹4 L: 0 % • ₹4–8 L: 5 % • ₹8–12 L: 10 % • ₹12–16 L: 15 % • ₹16–20 L: 20 % • ₹20–24 L: 25 % • above ₹24 L: 30 %. Salaried standard deduction: ₹75,000. Health & Education cess 4 %.

§87A rebate + marginal relief

New regime: rebate up to ₹60,000 if taxable income ≤ ₹12 L. Above ₹12 L the Finance Act 2025 marginal relief caps tax at (income − ₹12 L) before cess (break-even ≈ ₹12.75 L). Old regime: ₹12,500 rebate if income ≤ ₹5 L.

Old regime basic exemption

Below 60: ₹2.5 L • senior 60–79: ₹3 L • super-senior 80+: ₹5 L. Salaried standard deduction ₹50,000. HRA (auto or manual), §80C (cap ₹1.5 L), §80D, other Chapter VI-A.

Surcharge + marginal relief

On taxable income: ₹50 L–1 Cr = 10 %, 1–2 Cr = 15 %, 2–5 Cr = 25 %, > 5 Cr = 25 % (new) / 37 % (old). Marginal relief applied at each threshold.

EPF / EPS / EDLI / Admin

Base = basic + DA (default capped at ₹15,000/month). Employee 12 %. Employer 12 % split: EPS 8.33 % on ₹15,000 (max ₹1,250) + balance to EPF. Plus EDLI 0.5 % and administrative charges 0.5 % (w.e.f. 01-06-2018).

ESI

Applies to gross ≤ ₹21,000/m (₹25,000 for persons with disability). Employee 0.75 %, employer 3.25 %. Employees with average daily wage ≤ ₹176 are exempt from the employee share.

NPS §80CCD(2)

Employer-NPS deduction: new regime 14 % of (basic+DA) for all employees (Finance Act 2024, effective FY 2025-26). Old regime: 14 % (govt) / 10 % (private).

HRA (old regime only)

Exemption = min(actual HRA, 50 % of basic+DA metro / 40 % non-metro, rent paid − 10 % of basic+DA).

Professional tax

State-dependent monthly levy (Article 276 caps the annual at ₹2,500). UI default ₹200/m.

Net → gross & CTC mode

Inverse calc via binary search. CTC mode back-solves gross so that CTC = gross + employer EPFO + employer ESI.

Self-employment / freelancer (§44ADA, §44AD, regular books)

§44ADA - specified professionals (presumptive)

Deemed profit = 50 % of annual gross receipts. Receipts limit ₹50 L, raised to ₹75 L when cash receipts do not exceed 5 % of total receipts (at least 95 % through banking/digital channels). Applies to specified professions (law, medicine, engineering, accountancy, architecture, technical consultancy, interior decoration, etc.).

§44AD - eligible businesses (presumptive)

Deemed profit = 8 % of turnover (cash) or 6 % for digitally received turnover. Turnover limit ₹2 Cr, raised to ₹3 Cr under the same 95 %-digital condition. Not available to professionals or commission/agency/brokerage income.

Regular books

Profit = revenue − deductible expenses. No turnover limit in this model.

Tax on the profit

The deemed or actual profit is taxed exactly like other slab-rate income: new/old regime slabs, §87A rebate (new regime: up to ₹60,000 when taxable income ≤ ₹12 L plus marginal relief just above; old regime: ₹12,500 up to ₹5 L), surcharge with marginal relief and the 4 % Health & Education cess - the same math as the salaried engine. No standard deduction: §16(ia) applies to salary income only, never to business/professional income. Receipts above the scheme limit are flagged in the result - the presumptive option is then not available and regular books (with a possible tax audit) apply instead.

From 01-04-2026 the Income-tax Act 2025 is in force; it merges §44AD/§44ADA/§44AE into section 58 with rates and limits carried over unchanged (provisional pending CBDT guidance under the new numbering).

Out of scope

GST, the advance-tax instalment schedule (presumptive taxpayers pay 100 % of advance tax in a single instalment by 15 March), tax audit requirements, old-regime Chapter VI-A deductions (80C/80D etc.), AMT, §44AE transporters.

Sources

• incometax.gov.in - Tax rates
• incometax.gov.in - ITR-4 (Sugam) FAQ: presumptive §44AD/§44ADA
• incometaxindia.gov.in - Income-tax Act (§44AD, §44ADA, §87A)