How to Calculate Taxable Salary from Your Payslip (Old vs New Tax Regime)

by Jobuza Team | Feb 16, 2026 | BLOG, Trending News

Your salary slip is more than a record of what you earn each month. It is the foundation for calculating your taxable income. Many employees focus only on their net salary, but income tax is not calculated on the take-home amount. To understand your real tax liability, you must analyse each component in your salary structure and apply the rules of the tax regime you choose.

According to chartered accountant Suresh Surana, income tax is calculated on taxable income computed under the head “Salaries,” not on the net pay shown in the salary slip. This means every earning component must be evaluated carefully to determine what is taxable, what is exempt, and what deductions are allowed.

Understanding the Structure of a Salary Slip

A typical salary slip contains multiple components that are treated differently under tax laws. These usually include:

• Basic salary

• House Rent Allowance (HRA)

• Special allowance

• Bonuses or incentives

• Employer contributions to retirement funds

• Employee deductions such as provident fund contributions

All these earnings together form your gross salary. The calculation of taxable income begins from this figure, not from the net salary credited to your bank account.

Step 1: Identify Gross Salary

Gross salary includes all earnings shown in your salary slip before deductions. This includes basic pay, HRA, special allowance and any other taxable benefits provided by the employer.

This amount serves as the starting point for tax calculation under both the old and new tax regimes.

Step 2: Calculate Taxable Salary Under the New Tax Regime

The new tax regime follows a simplified structure with lower tax rates but limited deductions.

Under this regime:

• Most exemptions and deductions are not available.

• Allowances such as HRA are fully taxable.

• Employee contributions to provident fund are not deductible.

• Only specifically permitted deductions, such as the standard deduction where applicable, can be reduced from gross salary.

Employer contributions to retirement funds become taxable only if they exceed the prescribed limits. When the contribution goes beyond the specified threshold, the excess amount is added to taxable income.

To calculate taxable salary under the new regime, subtract only the allowed deductions from gross salary. The remaining amount becomes your taxable income.

Step 3: Calculate Taxable Salary Under the Old Tax Regime

The old tax regime allows several exemptions and deductions, which can significantly reduce taxable income for eligible taxpayers.

Under this regime:

• HRA may be partially or fully exempt if conditions are met.

• Employee contributions to provident fund may qualify for deduction under Section 80C.

• Additional deductions under Chapter VI-A, such as insurance premiums or specified investments, may be claimed.

Taxable income under the old regime is calculated by reducing eligible exemptions and deductions from gross salary, subject to statutory limits.

Step 4: Compare Taxable Income Under Both Regimes

The main difference between the two tax systems lies in the availability of exemptions and deductions. The new regime offers simplicity with fewer deductions, while the old regime provides multiple tax-saving options but requires more documentation.

To choose the better option:

1. Calculate taxable income under both regimes using your salary slip.

2. Apply the respective tax rates.

3. Select the regime that results in lower tax liability.

Why Net Salary Should Not Be Used for Tax Calculation

Net salary is the amount received after deductions such as provident fund, professional tax and other adjustments. However, income tax is calculated before many of these deductions are applied. Relying on net pay can lead to incorrect tax estimation and planning mistakes.

Accurate tax computation always begins with gross salary and then applies regime-specific rules.

Key Takeaway

To determine taxable income correctly, you must break down your salary slip into individual components and apply the rules of the tax regime you choose. The process starts with gross salary and ends with taxable income after adjusting for permitted deductions and exemptions.

Online Payment Fraud in India: RBI Compensation Limit, Rules and Claim Process

by Jobuza Team | Feb 11, 2026 | BLOG, Trending News

Online Payment Fraud: The Reserve Bank of India (RBI) is preparing a new framework to protect customers against losses from small-value fraudulent digital transactions. In a recent monetary policy address, RBI Governor Sanjay Malhotra confirmed that the central bank will propose rules allowing compensation of up to ₹25,000 to eligible victims of online fraud.

This move is part of a broader set of measures introduced by the RBI to strengthen customer protection and improve the safety of digital payments across India. The draft guidelines are expected to be released soon.

What the New Compensation Framework Covers

According to the RBI, the compensation framework will revisit existing rules on customer liability in cases of electronic banking fraud. At the post-Monetary Policy Committee (MPC) press conference, key points of the proposed system were outlined:

• The compensation benefit will be granted only once in a lifetime to a customer. It is not an annual entitlement.

• The lifetime limit has been introduced to encourage users to stay vigilant and avoid repeated mistakes.

• The maximum compensation amount is capped at ₹25,000.

• The actual payout will be calculated as 85% of the loss or ₹25,000, whichever is lower.

How the Compensation Will Work

Under the proposed rules, the amount a customer receives will depend on the value of the loss:

• If the fraud loss is ₹50,000, 85 percent equals ₹42,500 — but the payout will be limited to ₹25,000.

• If the fraud loss is ₹20,000, 85 percent equals ₹17,000 — so the customer would receive ₹17,000.

These provisions aim to strike a balance between consumer protection and responsible use of digital payment systems.

Fraud Cases Remain High

Data released by the RBI shows that Indian banks reported 13,469 cases of card and internet-based fraud in the fiscal year 2024-25, with total losses of ₹5.2 billion. This follows 29,080 reported frauds and ₹14.57 billion in losses in 2023-24.

Other RBI Measures for Customer Protection

In the same announcement, the RBI also said it will issue guidelines on several related areas:

• Misselling of financial products by lenders.

• Recovery practices used by loan agents.

• A discussion paper on enhancing the safety of digital payment systems.

Online Payment Fraud in India : The RBI highlighted the need to ensure that third-party products offered at bank counters are suitable for customers and aligned with individual risk appetites. New measures under consideration include the introduction of “lagged credits” and additional authentication requirements for senior citizens using digital payments.