# Salary Tax Planning & CTC Structuring

> For FY 2026-27, the new regime gives salaried residents a ₹75,000 standard deduction and no tax up to ₹12.75 lakh of salary, but few other benefits. The old regime still rewards HRA, LTA, 80C, 80D, NPS and home-loan interest. The most valuable component today works in both regimes: the employer's NPS contribution, deductible up to 14% of basic + DA in the new regime. Run both regimes on your actual numbers before telling your employer.

Practice: Salary, RSU & ESOP Tax — https://www.industax.com/services/employee-tax/

Salary planning is now as much about structure as investments. Since the Labour Codes, allowances outside 'wages' are capped at 50% of remuneration, which changes the trade-off between basic pay (more PF and gratuity) and flexible allowances.

We compare both regimes for your income, suggest components your employer can offer (employer NPS, meal cards, telephone and internet reimbursements, car leases where useful), and project the impact on take-home pay and retirement savings.

## Key facts

| Item | Detail |
| --- | --- |
| New regime | ₹75,000 standard deduction; nil tax up to ₹12 lakh taxable income |
| Employer NPS | Deductible up to 14% (new) / 10% (old) of basic + DA |
| Overall cap | Employer PF + NPS + superannuation above ₹7.5 lakh taxable |
| Regime switch | Every year for salaried without business income |
| Labour Codes | Excluded allowances ≤ 50% of remuneration |

## Who needs this

- Salaried employees choosing a regime
- Employees negotiating CTC
- HR teams designing salary structures

## What's included

- Two-regime computation
- CTC component recommendations
- Declaration guidance for employer TDS
- ITR filing

## Documents

- Salary breakup or offer letter
- Investment and rent details
- Previous Form 16

## Process

1. **Compute** — Both regimes modelled on your data.
2. **Structure** — Components suggested within the rules.
3. **Declare** — Employer TDS declaration aligned.

## FAQs

### Which salary components are still tax-free in the new regime?

The standard deduction, the employer's NPS contribution (up to 14%), and certain reimbursements of actual business expenses. Most allowances such as HRA, LTA and meal vouchers are taxable in the new regime.

### Should I ask for a higher basic salary?

A higher basic increases PF and gratuity (long-term savings) and HRA exemption in the old regime, but reduces flexible allowances and take-home pay. The right mix depends on your regime and goals.

### Can I change my regime after telling my employer?

Yes. The declaration to your employer only affects TDS. The final choice is made when you file your ITR, as long as you have no business income.

## Official sources

- incometaxindia.gov.in: https://www.incometaxindia.gov.in/

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Canonical page: https://www.industax.com/services/employee-tax/salary-tax-planning
Publisher: Indus Tax — CA-led tax and compliance firm (https://www.industax.com). Contact: info@industax.com, 9059139258.
This is general information, not advice for your specific facts.