How Do I Calculate My Monthly Take-Home Pay from This IBM Offer?

I request your help to understand how much my monthly take-home will be in the offer I received from IBM recently. Below is the salary structure:

Compensation Components IBM Offer (Rupees):

1. Basic Salary: 442,163
2. Flexible Benefit Plan (FBP): 596,920
3. Retirals:
(a) Provident Fund (PF): 53,060
(b) Gratuity: 21,224

Annual Fixed Remuneration: 1,113,366

I would be very grateful if you could help me determine my monthly take-home pay (excluding tax).

Thanks in advance for your helpfulness.

Rough Calculation of Monthly Take-Home Salary

The rough calculation is given below:

• Earnings
- Basic: 442,163
- FBB (Considered Fully Taxable): 596,920

• Deductions
- PF: 53,060
- ITAX (Considering No Investment): 131,022

• Summary
- Gross Salary: 1,039,083
- Gross Deductions: 184,082
- NET TAKE HOME: 855,001
- Monthly Take Home: 71,250

Hope this helps.

Your take-home salary depends on two factors:

1. The date you join the company, as the total tax for the year is calculated based on your yearly salary.
2. The tax-saving components you choose from your FBP plan. It may include elements like LTA, HRA, food coupons, medical allowance, conveyance, etc. You have mentioned them here, so I am assuming that the full amount of FBP is taxable.

Assumptions Based on Joining Date

A. Assuming you joined the company on 1 April 2012, your take-home would have been: Rs. 71,250 per month.

B. Assuming you joined the company on 20 Oct 2012, your take-home would have been: Rs. 78,000 per month.

NOTE:

1. You can, of course, increase this take-home if you use some tax-saving options like medical allowance, HRA, LTA, conveyance, etc.
2. The difference in take-home is due to the income tax, which is calculated for the financial year.
3. HRA tax benefit depends on the city you reside in. If you stay in a METRO city, you get more tax benefits.

Thank you, Anil and Preetham, for your reply. I was expecting a monthly take-home between 80k to 85k, excluding tax. Can you please help me calculate my monthly take-home if I have the following tax declarations?

Tax Declarations

- 80C: 100,000
- Interest paid on housing loan: 150,000
- Medical bill: 15,000
- HRA: 144,000

Compensation Components IBM Offer (Rupees)

1. Basic Salary: 442,163
2. Flexible Benefit Plan (FBP): 596,920
3. Retirals
- (a) Provident Fund (PF): 53,060
- (b) Gratuity: 21,224

Annual Fixed Remuneration: 1,113,366

Your monthly take-home will vary between ₹71,250 to ₹77,000. When computing tax liability, you also need to address the status of your income and tax from your previous employer, as it will add to your taxable income.

Even if your entire income is tax-free, you will not be able to receive more than ₹82,000 per month. Secondly, if you wish to claim HRA and a housing loan, remember that if both properties are in the same location, you can only claim one and not both.

For an exact calculation of your income tax and take-home pay, you will need to share all details of your previous income, actual investments, tax deductions, etc.

First of all, salary is a very confidential matter and should never be disclosed in public. You could have provided the numbers at a high level and requested a tax calculation or understood the tax computation to do the calculation on your own. You should also avoid disclosing the company name when referring to the salary.

Thanks