Two people with an identical CTC can end up with very different take-home pay and tax liability, purely based on how their salary is structured into components — and many employers let you customise this to some extent.
Components like HRA (if you pay rent), meal vouchers, and reimbursements for things like books, internet, and telephone bills are typically more tax-efficient than an equivalent amount paid as plain basic salary, because they're either partially or fully exempt rather than fully taxable. Employer contributions to NPS under Section 80CCD(2) are another lever — this is separate from your personal 80C limit and can meaningfully reduce taxable income if your company's flexible benefits plan allows you to opt into it.
The catch is that a higher basic salary also means higher EPF contributions (both yours and your employer's), which builds retirement savings but reduces immediate take-home pay — so restructuring toward more tax-efficient components isn't purely a free win, it's a trade-off between now and later.
If your employer offers a flexible benefits or CTC customisation window, it's worth revisiting your structure at least once, especially after a salary hike, rather than leaving it on whatever default split HR originally assigned.
Frequently asked questions
What is a salary calculator with old vs new regime comparison?
It takes your gross annual salary and computes your income tax liability under both the old and new tax regimes side by side, factoring in standard deduction, applicable slabs, cess, and rebates, so you can see which regime results in lower tax for your specific numbers.
What is the key difference between the old and new tax regimes?
The old regime has fewer, wider slabs but allows numerous deductions and exemptions like 80C, HRA, and home loan interest, while the new regime offers lower slab rates and a larger tax-free threshold but removes almost all deductions except the standard deduction.
Which regime is the default now?
The new tax regime is the default option for all taxpayers; if you want to be taxed under the old regime with its deductions, you must explicitly opt for it, either when filing your return or by informing your employer for TDS purposes.