My CTC is Rs 10 lakh in my first job. Which tax regime will gives me maximum in-hand salary?

I’m starting my first job and need help understanding which tax regime old or new would give me maximum savings and a higher in-hand salary. My offer includes: Basic Salary Rs 4,22,297, FBP Rs 5,06,757, total Rs 9,29,054. Retirals include PF Rs 50,676 and gratuity Rs 20,270, taking the total CTC to Rs 10 lakh. I’ll also be opting for a Rs 14 lakh health insurance top-up via my employer at Rs 30,000/year. I’m new to taxes and don’t understand deductions, exemptions, or how the top-up affects my tax. Could someone guide me on which regime to choose, what deductions I’m eligible for, and my estimated in-hand salary?

Advice by CA Niyati Shah, Vertical Head – Personal Tax at 1 Finance

The comparison between the Old and New Tax Regimes primarily revolves around tax slabs and available deductions.
The Old Regime is ideal for individuals who claim multiple exemptions and deductions such as HRA, standard deduction, and benefits under Sections 80C and 80D. On the other hand, the New Regime features reduced tax rates but does away with most deductions. The right choice depends on your income level, salary components, and how much you invest in eligible tax-saving instruments.

Landing your first job is a significant achievement and so is your first brush with income tax. With Budget 2025 enhancing the new tax regime while still keeping the old one in place, deciding which to choose can be confusing.

For those just stepping into the professional world, it’s important to grasp how your salary is structured, what deductions are available, and how these affect your actual take-home pay.

Let’s decode this with someone starting with a ₹10 lakh Cost to Company (CTC) and evaluate which tax regime provides maximum savings and a higher take-home salary.

Salary Structure Breakdown

Component	Amount (Rs)
Basic Salary	4,22,297
Flexible Benefits (FBP)	5,06,757
Gross Salary	9,29,054
Employer PF Contribution	50,676
Gratuity	20,270
Total CTC	10,00,000
Health Insurance Top-up	30,000 (employer-paid)

Taxable Income Calculation

Particulars	Old Regime (Rs)	New Regime (Rs)
Gross Salary	9,29,054	9,29,054
Less: Standard Deduction	50,000	75,000
Less: 80C Deduction (PF)	50,676	-
Less: 80D Deduction (Health Top-up)	25,000	-
Subtotal	8,03,378	8,54,054
Less: Employer PF (deductible in new regime)	-	50,676
Taxable Income	8,03,378	8,03,378

Tax Computation for FY 2025–26

Old Regime

Slab	Rate	Tax (₹)
Up to ₹2.5L	Nil	-
₹2.5L – ₹5L	5%	12,500
₹5L – ₹8.03L	20%	60,676
Total Tax		73,176
Health & Education Cess (4%)		2,927
Total Tax Payable		76,103

New Regime

Slab	Rate	Tax (₹)
Up to ₹4L	Nil	-
₹4L – ₹8L	5%	20,000
₹8L – ₹8.03L	10%	338
Total Before Rebate		20,338
Less: Section 87A Rebate		20,338
Total Tax Payable		₹0

In-Hand Salary Comparison

Computation	Old Regime (Rs)	New Regime (Rs)
CTC	10,00,000	10,00,000
Less: Employer PF + Gratuity	70,946	70,946
Less: Income Tax	76,103	0
Annual In-Hand Salary	8,52,951	9,29,054
Monthly In-Hand (Approx.)	~71,080	~77,420

Conclusion:

For salaried individuals starting their careers, especially those without major investments, housing rent, or deductions, the new tax regime is a clear winner. Here's why:

1. Higher Standard Deduction of ₹75,000 increases take-home pay.

2. Zero Tax Liability due to the raised Section 87A rebate limit (₹12L).

3. Simplified Compliance with no investment proofs or declaration hassle.

4. Better Liquidity to meet early-career goals like EMIs, savings, or travel.

For a fresher earning Rs 10 Lakh CTC, the new tax regime, especially after Budget 2025, offers unmatched ease, higher in-hand salary, and zero tax burden. It aligns well with early financial priorities, allowing more room for life-style, liquidity and savings; without the pressure to invest just for tax benefits.

Assumptions taken:

1. Flexible benefits are considered fully taxable as no break-up available like HRA, LTA, etc. under the old regime.

2. The Mediclaim paid u/s 80D is considered for self only. Under old regime.

3. Employer-paid health top-up is treated as non-taxable and excluded from Gross Salary under both regimes.