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India.com
4 hours ago
- Business
- India.com
8th CPC salary calculator: What will be the net salary of level-5 employees including basic pay, fitment, house rent, and Travel allowance?
The words '8th Pay Commission' bring hope and excitement to lakhs of central government employees and pensioners across India. From social media posts to office lunch breaks, one question is on everyone's mind i.e. 'How much will our salary increase this time?' Most discussions usually begin with the lowest pay level (Level-1), but it's important to remember that a large number of employees work in the middle levels, which form the backbone of the country's administrative system. So, what will the new basic pay be? What fitment factor will be used? How much will HRA (House Rent Allowance) and TA (Travel Allowance) add to the total salary? If you're also wondering about these things, don't worry as here we explain how you can use an '8th CPC Salary Calculator' to get a rough idea of your expected revised salary, including all the main components. Fitment Factor: The key to your salary hike Before we calculate the salary for Level-5 employees, it's important to understand what the fitment factor is. It is s a multiplier used to calculate your new basic salary by multiplying it with your current basic salary. This factor plays the biggest role in how much your pay increases. In the 7th Pay Commission, the fitment factor was 2.57. What is expected in the 8th Pay Commission? There's no official confirmation yet, but several reports mention possible figures like 1.92, 2.08, and even 2.86. For a realistic and conservative estimate, here we will base our calculation on the 1.92 fitment factor. Basic Pay comparison across all levels (Based on Different Fitment Factors) Below is a comparison based on three commonly discussed fitment factor values: 1.92, 2.08, and 2.86. Pay Level Current Basic Pay (7th CPC) With 1.92 Fitment Factor With 2.08 Fitment Factor With 2.86 Fitment Factor Level 1 Rs. 18,000 Rs. 34,560 Rs. 37,440 Rs. 51,480 Level 2 Rs. 19,900 Rs. 38,208 Rs. 41,392 Rs. 56,914 Level 3 Rs. 21,700 Rs. 41,664 Rs. 45,136 Rs. 62,062 Level 4 Rs. 25,500 Rs. 48,960 Rs. 53,040 Rs. 72,930 Level 5 Rs. 29,200 Rs. 56,064 Rs. 60,736 Rs. 83,512 Level 6 Rs. 35,400 Rs. 67,968 Rs. 73,632 Rs. 1,01,244 Level 7 Rs. 44,900 Rs. 86,208 Rs. 93,392 Rs. 1,28,414 Let's look how your monthly salary might look under the 8th Pay Commission, assuming you're a Level-5 central government employee. Step 1: New Basic Pay Current Basic Pay: Rs. 29,200 Expected Fitment Factor: 1.92 New Basic Pay: Rs. 29,200 × 1.92 = Rs. 56,064 This new basic pay becomes the base for all further calculations. Step 2: What happens to dearness allowance (DA)? When a new pay commission comes into effect, DA is reset to zero. This is because the rise in inflation over the years is already adjusted into the new basic pay. DA in 8th Pay Commission (initially): Rs. 0 Step 3: House Rent Allowance (HRA) Calculation HRA depends on the type of city you're posted in: X category (metro cities): 30 per cent Y category (medium cities): 20 per cent Z category (small towns): 10 per cent Assuming you are in an X category city, the HRA is calculated as: New Basic Pay: Rs. 56,064 HRA at 30 per cent: Rs. 56,064 × 30 per cent = Rs. 16,819 Step 4: Travelling Allowance (TA) For Level-3 and above in higher TPTA cities, TA is Rs. 3,600 + DA. Since DA is zero for now, TA: Rs. 3,600 Step 5: Total Gross Salary Now, let's add everything: Basic Pay: Rs. 56,064 DA: Rs. 0 HRA: Rs. 16,819 TA: Rs. 3,600 Total Gross Salary = Rs. 76,483/month Deductions: What will actually come into your bank? Your gross salary is not your take-home (net) salary, as some mandatory deductions apply: NPS Contribution (10 per cent of Basic Pay): Rs. 56,064 × 10 per cent = Rs. 5,606 CGHS Contribution (fixed for Level-5): Rs. 250 Total Deductions = Rs. 5,856 Final Net (In-Hand) Salary Gross Salary: Rs. 76,483 Minus Deductions: Rs. 5,856 Net Salary = Rs. 70,627/month Therefore, a Level-5 employee can expect to receive around Rs. 70,627 per month in hand, once the 8th Pay Commission is implemented.
Economic Times
4 days ago
- Business
- Economic Times
Save tax in new tax regime: Here are 6 smart ways
Getty Images While the new regime has fewer levers, there are still legitimate strategies available to reduce tax liability. When Budget 2025 increased the income tax rebate limit to Rs.12 lakh under the new tax regime, it gave a big relief to taxpayers. For a large section of the salaried class, the new structure now offers greater benefits than the old one, not just in terms of lower taxes, but also reduced compliance. With fewer deductions to claim, filing becomes simpler. But with less paperwork comes less deductions. Popular deductions available under the old regime, such as Section 80C for investments, 80D for health insurance premiums, and House Rent Allowance (HRA) for rent paid, are not applicable under the new regime. This has led many to believe that tax planning has become obsolete. That's not true. While the new regime has fewer levers, there are still legitimate strategies available to reduce tax liability. The key lies in identifying and using them. Abhishek Kumar Pathak, a management consultant, works at a Delhibased startup and pays significantly lower taxes under the new regime compared to the old one. Yet, he's overlooking a key tax-saving opportunity that could further reduce his outgo. Pathak is not investing in the National Pension System (NPS) because he believes it locks up his money for too long. However, NPS remains a highly effective tax-saving tool under the new regime. Contributions through employer up to 14% of basic salary are exempt under Section 80CCD(2), yet many employees don't fully leverage this benefit. Primarily designed for retirement, NPS is a strong, long-term wealth creation long-term financial goals include retirement and his future child's education. Though unmarried, he believes in starting early and invests regularly through monthly SIPs. However, the gains from these investments will be fully taxable at the time of redemption. A smarter strategy would be to shift the portion of his SIP meant for retirement (up to 14% of his basic salary) to the NPS. Doing so will not only reduce his taxable income but also provide a tax-efficient exit. As per Section 10(12A) of the Income Tax Act, 60% of the NPS corpus withdrawn at the age of 60 is tax-free. This makes NPS a compelling choice for retirement planning under the new tax it's important to remember that the annuity purchased at retirement from the NPS corpus is not tax-free. Still, NPS - E (Equity) delivers competitive returns along with attractive tax benefits. It also encourages disciplined investing, a key factor in retirement need not worry about NPS's limited liquidity, as it is meant for long-term retirement planning. For unexpected expenses, a dedicated emergency fund is a more practical solution.'To maximise tax savings through NPS, keep your basic salary as high as possible, so that your employer's 14% contribution also stays on the higher side,' advises Sudhir Kaushik, Founder, Increase your EPF contribution It's common knowledge that an employer's contribution to both the Employees' Provident Fund (EPF) and the NPS forms part of your Cost to Company (CTC). However, when it comes to EPF, some employees opt for Rs.1,800 monthly contribution— 12% of the capped salary of Rs.15,000— without realising this is just the minimum and not a fixed you can choose to contribute more, up to 12% of your actual basic salary, in case it exceeds the Rs.15,000 threshold, to the EPF. You can ask your employer to restructure your salary in a way that you contribute more. Nitesh Buddhadev, a chartered accountant and founder of Nimit Consultancy, explains that the employer's contribution remains tax-free, even under the new regime. Since this is part of your CTC, a higher contribution (matched by your share) may reduce take-home pay but boosts your EPF savings. 'Opting for the full 12% makes much more sense,' says Buddhadev. 'It not only keeps the employer's tax-free contribution intact but also helps build a larger retirement corpus over time.' Aarti Raote, Partner at Deloitte India, agrees: 'Though this benefit exists under the old tax regime, it remains a valuable tax-saving tool for salaried individuals even under the new regime if they opt for a higher PF contribution.' Check with your employer if they provide this option. However, investing in any asset purely for tax benefits is not the smartest move. Begin by evaluating whether increasing your EPF contribution actually aligns with your retirement goals. Abhishek KumarPathak, 30Management consultant, Delhi INCOME Rs.30 lakh;Rs.10 lakh basic RIGHT MOVES Invests Rs.28,000 in monthly SIPs under his father's name. Scope for improvement: Start investing in NPS and save Rs.30,000 further in monthly SIPs in equity funds. PAYS TAX Rs.4.7 lakhIf you have a low-risk appetite and already prefer fixed income options like FDs or savings accounts, then boosting EPF contributions may suit you. But be mindful of the limits. The combined employer contributions to EPF and NPS must not exceed Rs.7.5 lakh a year, and any excess becomes taxable. So, if your NPS contributions are already substantial, increasing PF contributions may not add much for an employee's own EPF contribution, the tax-exempt limit is Rs.2.5 lakh annually. Stretching beyond this limit just to save tax may not be worth it. Invest in parents'/kin's accounts Now this may be a controversial strategy. 'We do not recommend this to anyone, as many may view it as ethically questionable,' says Raote. She isn't wrong. 'This approach can attract penalties if the intent is purely to avoid tax. It lies in the grey zone, technically legal, but ethically debatable,' agrees Nishant Khemani, Managing Partner, Saturn Consulting Group. But, if you execute it carefully with the right approach, it can prove useful in reducing your tax outgo.'The safest method is to gift surplus money to a non-earning parent and invest it through their account. Declaring it as a gift removes any tax implications on the transfer,' explains Khemani, who is a chartered accountant. Here's how it works: you gift your non-earning mother `10 lakh, which she then parks in a fixed deposit. She can either use the interest income herself or transfer it to you. But if she chooses to send it back, she must also show it as a gift to avoid any tax strategy can be used with any family member except your spouse, and minor kids. Any income earned by your spouse from the money you transfer is clubbed with your income and taxed the case of Pathak, who has been saving taxes by investing in his father's name. Since his father doesn't cross the taxable limit, the interest income escapes tax. If you choose to follow a similar path, it's wise to have a will in place, especially for large sums or where there are multiple heirs to avoid disputes in case the parent is no longer some CAs recommend this method, ET Wealth advises caution. It is a cumbersome and potentially risky practice to reduce your tax outgo, as it may run afoul of the tax authorities. From debt to arbitrage Delhi-based Nisha Yadav is a self-employed art teacher who prefers playing it safe. She has invested in multiple fixed deposits (FDs), as they align well with her low-risk appetite and offer capital protection. While FDs, arbitrage funds, and debt funds offer similar returns, the way they are taxed varies funds aim to deliver debt-like returns, but score higher due to their equity tax treatment. Debt funds are taxed annually at your income slab rate, which can eat into your returns. On the other hand, arbitrage funds are treated as equity and are only taxed at the time of redemption, and at much lower rates if held for over a year. If they are held for more than 12 months, a rate of 12.5% is applicable on Yadav shifts her investments from FDs to arbitrage funds, she benefits significantly from the power of compounding. Since the interest earned on FDs is taxed annually, compounding has a limited impact on her returns. But arbitrage funds, being taxed only at the time of redemption, allow her returns to grow uninterrupted over longer periods of making the switch, Yadav can not only reduce her tax outgo but also potentially earn higher post-tax returns compared to FDs or debt funds. To further optimise her tax strategy, she can consider practising gains harvesting which is applicable on not just arbitrage but any equity mutual fund. Gains harvesting involves booking profits of up to Rs.1.25 lakh worth of investments each year and reinvesting them at the same price. Doing so increases the cost of acquisition annually, thereby significantly reducing her future capital gains tax liability on paper.'An important point to note during gains harvesting is that the Rs.1.25 lakh capital gains exemption limit applies per PAN, per financial year,' adds example, you invested Rs.5 lakh in a fund and have a profit of Rs.1.25 lakh: you can sell these investments worth Rs.6.25 lakh, on which you are not liable to pay tax, and then buy them again after a day or so. Now your new cost of acquisition is Rs.6.25 lakh instead of Rs.5 lakh. If you are investing through SIPs, the returns are calculated using the first infirst out (FIFO) method. Consultants & presumptive tax Since Yadav is not a salaried employee, she cannot avail of benefits like employer contributions to NPS or provident fund. However, self-employed professionals like her—including consultants and freelancers—can opt for presumptive taxation scheme under Section 44ADA. This provision allows them to declare 50% of their gross receipts as taxable income, irrespective of their actual expenses. Some deductions still available in NTRWhat's allowed, what's not; how to optimise your pay slip. For example, Yadav earns Rs.20 lakh in a financial year, she can declare Rs.10 lakh as her taxable income without maintaining expense records or providing supporting documents—even if she has used the entire amount for personal use. This method eliminates the need to maintain detailed books of accounts and remains valid as long as gross receipts do not exceed Rs.75 lakh.'Many professionals, including retired individuals working as consultants, prefer this route because it significantly lowers their overall taxable income, making it a highly effective tax-saving strategy in the new regime,' says Khemani. By opting for this, Yadav can potentially reduce her taxable income enough to fall below the basic exemption limit and pay no income tax at self-employed individuals using this provision must still comply with GST regulations if their total revenue exceeds Rs.20 lakh. In Yadav's case, GST may not even apply, as the services she offers likely fall under the category of educational services, which are currently exempt. Nisha Yadav, 26Owns an art studio in south Delhi INCOME Rs.25 lakh INVESTMENTS Majorly in FDs, giving average interest of 7.5% amounting to Rs.8 lakh PAYS TAX Rs.3.1 lakh Scope for improvement: Shift to arbitrage funds and opt for presumptive tax under section 44ADA. She stands to save Rs.2.67 lakh in tax. Other deductions Even though the new tax regime has removed most common deductions, there are still a few you can claim like interest on home loan if your house is rented. As per Section 24(b), if you own a let-out property, you are allowed to claim a deduction on the interest paid on the home loan up to the extent of your rental income in a financial year. However, this benefit is not available for self-occupied homes under the new are some more deductions that you can claim that are perceived as taxable by most individuals.'The new regime explicitly lists the deductions that are not allowed. But several others are neither included nor excluded, so you can still claim those,' says Kaushik of work-related expenses continue to be eligible. 'Training or education expenses incurred for professional development can still be claimed. But if the employer is already deducting this from your salary, employees don't need to take any separate action,' adds Raote of of these deductions apply only to expenses incurred for work (see graphic), but they can still help to reduce your overall tax outgo. Make the most of whatever tax-saving opportunities exist under the new regime. However, don't invest just to save tax if it doesn't align with your financial goals or long-term investment strategy. Always compare benefits, returns, risks, and liquidity before locking in your money for any duration. N.R. 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India Today
4 days ago
- Business
- India Today
Should you be paying rent with credit card?
For many people, paying rent is one of the biggest monthly expenses. So, it makes sense to ask, should you use a credit card for such a regular payment? It might sound smart, especially if you're eyeing those reward points or trying to make use of the interest-free credit period. But, as with most things, there are both benefits and a simple breakdown of what you need to know before pulling out your credit card to pay the MAY BE EXTRA CHARGESWhile some platforms do allow rent payments via credit card, they usually charge a convenience or service fee. This is often around 1–2.5% of the rent amount. So, if your rent is Rs 50,000, the fee could be anything between Rs 500 and Rs 1,250. That's money leaving your pocket just for using the CAN AFFECT YOUR CREDIT SCORE Using your credit card for rent will increase your monthly card usage. If your credit limit is Rs 1 lakh, and you use Rs 50,000 for rent, you're already using half your limit.A high credit utilisation ratio can temporarily pull down your credit score. So, if you have other big purchases lined up, it may not be a great MAY NOT EARN REWARD POINTSNot all card issuers treat rent payments the same way. Some consider them 'quasi-cash' transactions, which means you might not get any reward points at all. Before you pay, it's wise to check your card's terms and RECEIPTS CAN BE USED FOR HRA CLAIMSIf you're claiming House Rent Allowance (HRA) in your salary, you can still use platforms that provide rent receipts, even when paying via credit keep in mind, the convenience fee won't be shown in the rent amount on the GET FLEXIBILITY, BUT ONLY IF YOU'RE DISCIPLINEDHowever, one of the biggest advantages is that you get an interest-free period of up to 45–60 days, depending on your billing cycle. Your savings remain untouched for a while, and if your card offers cashback or points, that's a bonus. Also, automated payments mean you won't miss a due here's the catch: this works only if you pay your credit card bill in full and on time. Otherwise, the interest and late payment fees can burn a hole in your SOME STILL PREFER ITSome people still prefer paying rent through credit cards because of the ease and benefits it offers. With automatic deductions, there's no risk of missing a payment. It also improves cash flow, as your money stays in your bank account longer. Plus, if you pay your bills on time, it helps build a stronger credit score over put, using a credit card for rent isn't a bad idea, if you're financially disciplined. Make sure you know the fees, understand your card's terms, and never miss the payment due date. If you're only doing it for the rewards, check whether the reward value is higher than the fees you're paying. Otherwise, it may not be worth always, don't let convenience turn into a costly mistake.- Ends
India.com
24-07-2025
- Business
- India.com
8th Pay Commission: Basic salary may jump to Rs 51000? know salary structure for central govt employees like Clerk, Officer after revision
Currently, the question on every central government employee's mind is—when will the 8th Pay Commission come into effect? According to media reports, it could be implemented next year, although there is no official confirmation yet. What Is 8th Pay Commission? The salaries of government employees are revised periodically based on the recommendations of new Pay Commissions. As preparations are going on for the 8th Pay Commission, expectations are high that a major increase in basic pay will follow. How Much Can Minimum Basic Pay Increase? Under the 7th Pay Commission, the minimum basic salary is Rs 18,000. In the 8th Pay Commission, the fitment factor is expected to increase to 2.86 or more. Based on this, the new minimum basic salary could directly jump to around Rs 51,000. Component Current (Based on Rs 18,000 Basic) 8th Pay Commission (Based on Rs 51,000 Basic) Basic Salary Rs 18,000 Rs 51,000 Total Salary (Gross) Approx. Rs 31,500 Approx. Rs 89,000 DA (Dearness Allowance) Approx. Rs 6,120 Approx. Rs 17,340 HRA (House Rent Allowance) Approx. Rs 4,320 Approx. Rs 12,240 Total Income Increase – Approx. 2.8 times 8th Pay Commission Salary Structure Basic pay will increase significantly. All related allowances such as DA, HRA, TA, etc., will also rise accordingly. With the new basic pay, DA will reset to zero and start afresh. Pensioners will benefit too, as their pensions are calculated based on basic pay. Salary structures will change across all levels from Class-1 officers and clerks to peons. Estimated Basic Pay by Post (Under 8th Pay Commission): Position Estimated Basic Pay (8th Pay Commission) Peon / Level-1 Rs 51,000 Clerk Rs 55,000 – Rs 65,000 Group B Officer Rs 70,000 – Rs 90,000 Senior Officer / Level-10+ Rs 1,00,000+ It could result in an overall salary increase of around 30–34%, ensuring a significantly heavier paycheck.
Time of India
23-07-2025
- Business
- Time of India
IIT students protest against fee hike with ‘kam karo, fee kam karo' slogans; watch video
Live Events Mess charges have increased from ₹12,000 in 2019–20 to ₹22,000, even as students complain of declining food quality and nutrition. Gymkhana fee doubled from ₹1,000 to ₹2,000. Medical fee rose five times—from ₹100 to ₹500. Hostel rent has doubled from ₹1,000 to ₹2,000, while the hostel fund has surged from ₹600 to ₹2,200. Enrollment or registration fee has increased from ₹1,000 to ₹2,000. Students also allege that a ₹1,300 fest fee per semester has been levied, despite the institute's annual fest being a high-profile event in the Northeast. (You can now subscribe to our (You can now subscribe to our Economic Times WhatsApp channel Students at IIT Guwahati staged a major protest on Tuesday over what they described as an 'exceptionally high' increase in academic fees. Hundreds of research scholars and MTech students assembled on campus, shouting slogans like 'Kam karo, kam karo, fee hike kam karo (Reduce fee hike),' expressing their discontent with the newly implemented fee year's revised fees include significant hikes not only for PhD scholars but also for BTech and MTech students. The unrest follows an open house session held on July 17, where the administration—including the director, deans of student and academic affairs, and other senior officials—allegedly assured students that their concerns regarding the fee hike would be addressed.'An open house discussion was held last week, and the administration said that they are there to listen to us, but it appears that they were there to buy time. Tuesday (July 22) was the day of registration for the July-November semester. However, you cannot register without paying the fee, and the premier institute did not communicate properly on the status of registration because, after the open house, we were promised a revision of the fee,' said a PhD scholar, requesting the apparent assurance, many students were reportedly denied registration when they visited their departmental offices, citing non-payment of the increased semester fee. While some students felt compelled to pay the fee to avoid academic disruption, the majority have chosen to withhold payment in protest.'With their research stalled, the students have come out and are protesting in the heat,' added a source from the to students, the fee for PhD scholars has been raised by ₹10,900—up from ₹34,800 in the January–May 2025 semester to ₹45,700 for the July–November term. Newly admitted scholars are expected to pay ₹92,000 at the start, with each semester costing around ₹57,000 thereafter—an amount that reportedly exceeds their monthly stipend by ₹20, PhD candidates have also seen a sharp hike, with their fees increasing from ₹2,500 to ₹25,000 per semester. In addition, students allege that IIT Guwahati fails to provide the House Rent Allowance (HRA) that should be granted under central government provisions, while still charging hostel fees. 'This means, IIT-G is pocketing the money twice from us,' claimed another PhD what the revised fee structure reportedly includesBTech students are expected to join the protests soon, expanding the scope of the unrest. As of now, IIT Guwahati has not issued an official response to the allegations or the ongoing demonstrations.
