Methodology

How a calculator gets built

Every calculator starts from the primary rule: the relevant section of the Income Tax Act, a Finance Act amendment, an EPFO or RBI circular, or a standard financial formula. We write the computation as a plain formula first, build three to five worked examples by hand (typically covering a low, mid, and high input, plus at least one edge case such as a threshold boundary), and only then implement the tool. The implementation must reproduce every hand-worked example exactly before the calculator goes live.

Where a rule has interpretation nuances — for example, metro versus non-metro city classification for HRA, or marginal relief near the Section 87A rebate threshold — we state the assumption we use directly on the calculator page rather than hiding it in fine print.

Income tax & salary

Income tax estimates follow the notified slab rates and Section 87A rebate logic for the new regime, with an optional old-regime comparison that accepts HRA, Section 80C, 80D, and home loan interest inputs. Standard deduction for salaried income is applied per current rules (Rs 75,000 in the new regime, Rs 50,000 in the old regime). Cess is applied at 4% on the computed tax. Marginal relief is applied where taxable income marginally exceeds the rebate threshold.

Sources: Income Tax Act, 1961; annual Union Budget and Finance Act notifications published on incometax.gov.in. When slab rates change in a Budget, we treat the official Finance Act text as final — not news coverage.

HRA, gratuity, EPF

HRA exemption uses the Section 10(13A) and Rule 2A minimum-of-three method: actual HRA received, rent paid minus 10% of salary (Basic + DA), and 50% of salary for metro cities or 40% for non-metro. Gratuity follows the Payment of Gratuity Act, 1972 formula — (last drawn Basic + DA) × 15/26 × completed years of service — with the statutory tax-free ceiling noted on the page. EPF projections use the standard 12% employee contribution and the employer split between EPF and EPS, compounded at the EPFO-declared rate unless you override the rate input.

Savings & loans

SIP returns use the standard future-value-of-annuity formula with monthly compounding: FV = P × [((1 + i)^n − 1) / i] × (1 + i), where i is the monthly rate. FD and RD use compound interest with the compounding frequency shown on the page. PPF follows the annual-compounding government scheme structure with the 15-year default tenure. EMI uses reducing-balance amortisation: EMI = P × r × (1 + r)^n / ((1 + r)^n − 1). Prepayment scenarios recompute the amortisation schedule rather than approximating.

Interest rates are user inputs. Where we show a default (for example, the current PPF rate), it is indicative — always verify the live rate with your bank or the National Savings Institute before investing.

GST & business documents

The GST calculator splits CGST/SGST for intra-state supply and IGST for inter-state supply, and supports both tax-exclusive (add GST) and tax-inclusive (extract GST) directions. The invoice and quotation tools format the fields commonly required on Indian tax invoices — GSTIN, HSN/SAC, place of supply, tax breakup — but they do not validate your GSTIN with the GST portal and do not file returns. You remain responsible for correct rates and compliance.

Known limitations

• Calculators model the common salaried and small-business cases. Unusual situations — multiple employers in one year, ESOP perquisites, foreign income, presumptive taxation — need professional advice.
• Payroll teams may round or time computations differently, so a payslip can legitimately differ from our estimate by small amounts.
• Tax rules shown apply to the financial year stated on each calculator page. Older financial years may have different slabs and limits.
• Results are estimates for planning. Final figures come from Form 16, AIS/TIS, and the official ITR utility.

Review cadence & corrections

We review tax-linked calculators after every Union Budget and whenever the Finance Act, CBDT, EPFO, or RBI notifies a change that affects a formula or default. Rate-linked defaults (PPF, small savings) are checked quarterly. Each calculator page carries a last-reviewed date. Our editorial process is described in the editorial policy.

If you find a discrepancy between a calculator result and an official source, report it via the contact page. Verified errors are fixed with priority and noted per our corrections policy.