Tax Components: From Salary Structure to Final Tax Liability
This guide breaks down two stacks of numbers every taxpayer encounters. First, your salary structure: Basic (taxable, and the base for HRA/EPF/gratuity calculations), HRA and LTA (exempt under Sections 10(13A) and 10(5), old regime only), Standard Deduction (₹75,000 new regime / ₹50,000 old regime — available to all salaried/pensioners), and perquisites including ESOPs. Second, the tax computation stack: slab-based tax → Section 87A rebate (zeroing tax up to ₹12 lakh new regime / ₹5 lakh old regime, with marginal relief) → surcharge for incomes above ₹50 lakh (capped at 25% under the new regime vs 37% under the old) → 4% Health & Education Cess → final liability, reconciled against TDS, TCS, advance tax, and self-assessment tax already paid.