Salary Calculator

You can partially withdraw PF: (1) After 5 years - Withdraw up to 50% for home purchase, education, medical emergency, (2) Job change - Full withdrawal possible, (3) Maturity - At 58 years (100% withdrawal), (4) Lower withdrawals - Possible for hardship. You cannot fully withdraw until age 58 or job termination unless emergency. Withdrawals are tax-free in most cases. Regular withdrawal freezes your PF account - balance becomes non-working. It's generally better to keep PF invested for retirement.

HRA exemption = Least of: (1) HRA received, (2) 50% of basic salary (metro cities) / 40% (non-metro), (3) Actual rent paid minus 10% of basic salary. Example: You receive ₹50K HRA/month in Delhi, basic ₹100K, pay ₹45K rent. Exemption = Min(₹50K, 50% of ₹100K = ₹50K, ₹45K - ₹10K = ₹35K) = ₹35K/month = ₹4.2L/year is tax-free. Only ₹15K/month taxable. Without proper rent documentation, you lose HRA exemption - save ₹2-3K/month in taxes.

TDS (Tax Deducted at Source) is deducted monthly by your employer based on estimated income. Actual tax (in ITR) depends on your total income after claiming all deductions. Difference reasons: (1) You earned more than expected (bonus, overtime) - higher tax due, (2) You claimed deductions late - ITR requires full deduction proof, (3) Multiple sources of income - freelance, rental income adds tax burden. You file ITR to reconcile - if TDS < Actual tax, you pay balance; if TDS> Actual tax, you get refund. Solution: Update HR if major income changes, claim deductions proactively, file ITR by July 31.

New Regime (from FY 2023-24, default): Standard Deduction ₹75K, simpler tax slabs (5%, 10%, 15%, 20%, 30%), no Section 80C deductions (LIC, ELSS, PPF), lower tax for most. Old Regime: Section 80C deductions up to ₹1.5L (LIC, ELSS, PPF, Home loan principal), HRA exemption (calculated), Professional fees (₹50K under 80D), but higher tax rates. Which is better? For most salaried employees < ₹25L, New Regime saves taxes (no need for deductions). Above ₹25L or having home loan, Old Regime with deductions often wins. Example: ₹20L salary, no deductions: New Regime ₹1.8L vs Old Regime ₹2.5L=₹70K savings in New Regime.

Salary restructuring (shift basic to HRA/allowances) can save taxes if: (1) You're renting (HRA is tax-free), (2) You have home loan (still benefit from lower basic for PF but deduct loan interest separately), (3) You're in high tax bracket (₹25L+). Restructuring pros: -₹5L basic +₹5L HRA = ₹60K/year less PF, saves ₹1-1.5L in taxes. Cons: Lower basic affects PF balance, home loan EMI calculated on basic only, lower gratuity calculation (based on basic). Verdict: Ask HR if restructuring possible, calculate savings before accepting - typically beneficial if renting, harmful if planning home loan. Always verify with CA before restructuring.

Retirement corpus planning: (1) Age 25-35 (early career): Focus on building emergency fund (₹10-15L), auto-enroll in PF (₹12L+/year), start SIP (₹5-10K/month) in ELSS (tax-deductible), total savings 20-30% of net, (2) Age 35-45 (mid-career): Target ₹50-100L corpus, increase SIP to ₹20-30K/month, maximize 80C (₹1.5L/year across PPF, ELSS, insurance), build NPS (non-compulsory), total savings 30-40% of net, (3) Age 45-55 (pre-retirement): Accelerate savings to ₹1L+/month, shift to fixed income for safety, consolidate all PF/pension accounts, estimate retirement need (25x annual expenses), total savings 40-50% of net. Example: ₹10L net salary, ₹4L/year savings for 25 years @ 8% return = ₹3Cr corpus (retirement ready at 60).

At retirement (typically 60): (1) Salary stops immediately unless extended (consulting, contract role), (2) PF can be fully withdrawn (tax-free up to ₹50L), remainder taxable, (3) Gratuity received (if eligible) - tax-free up to ₹20L or 15 days salary × years of service, (4) Pension starts (if applicable) - Usually 50% of last drawn salary for self + dependent, taxable income, (5) Medical benefits - May continue for 6-12 months post-retirement. Planning: Ensure corpus covers 25-30 years of post-retirement life (age 60-90). Withdrawal strategy: Don't deplete corpus in first 5 years, withdraw 4% annually to ensure sustainability. Consider annuity (fixed monthly income) vs lump sum withdrawal. Consult financial advisor for tax-efficient withdrawal strategy post-60.