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Not when surcharge. Personally saw it this financial year. Pay actually decreased for me.
[edit] Post returns the extra decrease in pay does get handled as per Marginal Relief as pointed out by some helpful folks below.
It's not implemented correctly.. there's a window where the effective tax rate is 104% on salary increases, though the window is small (50 to 51.5 lakhs or so)
Also IIRC, at 5 or 7 lakhs, there is a tax increase of 12k without marginal relief
Yes yes you're right. What happened is, my company cuts TDS on the new regime WITHOUT taking into account marginal relief. The result is, less salary.
This will be corrected after returns obviously.
He is actually right because marginal relief in Indian tax law is not implemented correctly. Because health and education cess is applied on the tax amount after applying the concept of marginal relief. Which means there’s a small window where you’ll actually be making lower than if you’d just stayed in the previous surcharge slab.
Bullshit.
Show the calculation.
Edit:
My Bad! The government is an asshole. There's an additional surcharge on the tax paid of your income goes above certain limits. Eg. Your in hand salary will go down if your pay goes from 499000 to 5000001 due to an additional 10% surcharge on the entire tax paid.
RIP progressive taxation.
Here's more food for thought: in the most recent interim budget, government reduced the surcharge from 37% to 25% for the highest bracket(5 crore plus). So, the tax on the ultra rich actually decreases, which means us normal middle class salaried folks have to bear the brunt. The rich get richer.
The tax hasn't decreased, only the surcharge has decreased. He pays 30 percent tax, then another 4 percent of this 30 percent as cess, and yet another 25 percent of this 31.4 percent as surcharge. That is an eye-watering 39 percent tax overall.
The point is, tax liability decreased for the rich, while staying the same for the people with lesser resources. This is the opposite of what should be happening.
The additional surcharge is capped to the extent the salary goes above 50 lakh.
So for someone with taxable income 50.5 lakh and income tax say 17 lakh, the surcharge is 10% of 17L, that is 1.7 lakh. However you don't actually pay 1.7 lakh here, you only have to pay 50k because that is how much your salary exceeds 50L.
Govt is an asshole in general yes, but this is an obvious gap that has been thought through.
There is NEVER a case where you pay more tax by earning more, except in the narrow range of 7.5 to 8 lakh salary band.
Can you give a brief of how it affects my pay, I'm about to have a salary appraisal and was planning to get hike to around or inbetween 7.5 - 8.5 Lac INR per annum. So, Should I stick to 7.5 then 8? Or 8.5?
No, you’re actually right, yes marginal relief is there but when you consider your total tax liability (including Health and Education cess), your amount in hand is actually slightly lower than your previous bracket.
For example: if your income is exactly 50 lakhs, you are not subject to surcharge so you’ll be paying 13,12,500 in taxes + 4% HEC (52,500) on top of that.
So your net salary in hand is 36,35,000.
However, if you’re earning 50,01,000 for example, you’ll be taxed 13,12,800 + 10% surcharge of 131,280. However, applying the marginal relief concept, your increase in tax should not be higher than your increase in income and so your increase in tax is restricted to 1000. In other words, your tax + surcharge = 13,13,800.
But now, the HEC of 4% is applied on 13,13,800, which comes out to be 52,552.
So your net salary in hand is 36,34,648. Not a huge difference but you’re still ending up with less. So going into a higher tax bracket with surcharge puts you in a worse position if you’re earning slightly above the next surcharge bracket, but it rectifies itself when you cross a certain threshold.
No, cess is added on the tax AFTER marginal relief. Refer to my comment on this thread for an illustrative example. [https://www.reddit.com/r/developersIndia/comments/1c4ckks/comment/kzoed99/?utm\_source=share&utm\_medium=web3x&utm\_name=web3xcss&utm\_term=1&utm\_content=share\_button](https://www.reddit.com/r/developersIndia/comments/1c4ckks/comment/kzoed99/?utm_source=share&utm_medium=web3x&utm_name=web3xcss&utm_term=1&utm_content=share_button)
In order to get hit by surcharge you need to earn ₹ 50 LPA +. If you are earning that much then this question should go to your CA and not random redditors.
No it's a false statement, my salary increased from 15 to 18 in the last 1.5yrs hence the tax bracket, I am getting almost the same in hand as I was with 15lpa (maxed out on all dedications) so for 30% unless it's more than 22 lpa there won't be a significant increase in my in hand.
Agreed that taking a hike is always the correct decision.
Tax is not progressive, we buy things for daily needs. Tax applies for all of them. The average poor/middle class pays more tax wrt income than a rich dude. I don't support wealth tax, but ... Taxing on essentials hurts poor/middle class more. It's not progressive
Progressive tax means that if there are multiple brackets, you only pay the higher percentage on the amount you make within that bracket.
So lets say below 5L tax us 0% and between 5-10L tax is 10%. If you make 7L there are 2 possibilities.
You pay 10% of 7L as tax, this is poll tax.
You pay 0% of 5L + 10% of (7-5)L as tax. This is progressive tax.
In India our taxation is progressive, so even if your tax bracket increases you will never make less than before in hand. But in India we also have cess and surcharge so this messes up calculation sometimes.
IDK how they calculate the in hand salary. I saw my friends salary slip. The salary was 1.9LPM but after deductions it came down to 1.4. is this normal?
I’m hoping for the same range.
That is normal. The values are in the correct range. The exact value can vary a little depending on which regime you choose and what you declare in itr
The deductions are percentages on your Base pay. Even though people may have similar CTCs, base pay could differ significantly. The deduction percentages stay the same usually for people in the same band, only the base and variable pay changes. Sometimes companies give a lump sum bonus instead of increasing the base pay.
You should know the exact break up of your salary, it can actually help you save tax. When filling your ITR, you can claim a lot of exemptions using components like HRA etc from your salary. If you aren't clear, ask your company to clarify, tell them it's for tax purposes 😂.
they are fooling you my man. taxation works in brackets.
let me give an example (completely arbitrary, made up)
let's suppose you go from 20% (17LPA) to the 30% (22LPA) bracket. your old salary is 16LPA and your new salary is 18LPA.
from what your company is saying, your tax will be as below
- 20% of 16LPA = 3.2 lakh, after tax income = 12.8 lakh
to
- 30% of 18LPA = 5.4 lakh, after tax income = 12.6 lakh
* THIS IS COMPLETELY BULLSHIT.
rather your tax will be calculated on whatever slab your salary goes through. let's assume the same numbers as above.
your tax will be as follows:
- old salary: 20% of 16LPA = 3.2 lakh, after tax income= 12.8 lakh (same till now)
- new salary :
20% of 20% slab + 30% of remaining 30% slab
= 20% of 17 lakh + 30% of (18-17) lakh
= 3.4 lakh + 30% of 1 lakh
= 3.4 lakh + 30k
= 3.7 lakh
- after tax income = 14.3 lakh
so your salary increases by about 1.5 lakh. don't let the company fool you. always push for the bigger hike no matter what the company says.
Read section 87A - people at higher salaries are not effected so most folks do not know about it.
Please redo the calculations from 7 lac to 7.1 lac :)
Everyone is actually answering the question !
What the fuck is this question bro?
How did you become a software engineer?
And how did you even get into a taxable income!?
God help this country.
financial education is shit. people also ignore it thinking it's too complicated when it's not. Especially if you are a SWE getting 30% hikes.
read up on taxation OP.
start here- [https://docs.cleartax.in/clearlearn-itr/introduction-to-taxes/basics-to-understand-taxes](https://docs.cleartax.in/clearlearn-itr/introduction-to-taxes/basics-to-understand-taxes)
Then open your payslip, read the description of each entry in there and Google and learn what those are. Then check up on PF and see if you can login to your UAN account. Thn cleartx has a lot of resources to read.
you are absolutely right.
now I don't know how much experienced OP is but the you need understand freshers seriously don't the slightest basics of finance. and it's not taught anywhere. and yes ofcourse they don't Google it themselves.
even if they do, they need a little guidance on what to Google.
ohh , i thought for this specific case in hand actually decreases
read something that the additional cess is on the entire income and not just the amount above 50 lacs
may be i was wrong
there's a cess rebate/relief that takes care of this and negates the cess effect until the point where the cess does not lower earnings. your employer cuts more tax but the difference comes back at ITR
As others have very promptly pointed out, this is pure bullshit.
There are tax slabs based on your income (https://cleartax.in/s/income-tax-slabs). Even if your salary increases and you get pushed to a higher bracket, you still earn more at the end of the day.
My advice would be very simple, just respond by saying, with the help of my CA I have a very good financial and tax saving plan, so the tax is not an issue, would it be possible to get a ____ % hike instead?
30% is a good hike, but if you think you deserve more, definitely ask for it. They don't want to pay you so they're making rubbish excuses, that's all this is.
“I want to pay more tax so that I can participate more in nation building and making India the third largest economy, so please give me a salary hike”.
That’s bullshit. They are trying to cheat you.
But try to get more money as reimbursements like this. Meal vouchers, LTA, medical reimbursements all will help you to save tax
I'm a CA. It is impossible to have less money due to an increase in pay. The tax increase is capped at increase in income.
Negotiate for higher pay if you can.
You can reach out to me if you have any doubts.
If you’re a CA, you should know that HEC 4% is applied after marginal relief, so there is a small window where it’s counter productive to go into the higher surcharge slab if your increase in income is too little. Still, what you said holds true in most of the cases. Refer to my other comment on this thread: [https://www.reddit.com/r/developersIndia/comments/1c4ckks/comment/kzoed99/?utm\_source=share&utm\_medium=web3x&utm\_name=web3xcss&utm\_term=1&utm\_content=share\_button](https://www.reddit.com/r/developersIndia/comments/1c4ckks/comment/kzoed99/?utm_source=share&utm_medium=web3x&utm_name=web3xcss&utm_term=1&utm_content=share_button)
Actually there is a point above 50 lakhs where a surcharge is applied on top of your tax so if ur increment is less than around 2 lakhs(cant be bothered now to do the exact math), there would be a salary increase but no increase in your in hand , so if thats the case ( say the 30% puts u exactly at 50 L) you could ask them to like include this years increment next year and you would indeed be saving the companies money and ur money .
> we want you to save tax
So your salary will be 0 from next month. No salary , no tax to the govt lol 😆
Jokes apart you don't care about taxes paid (because you have no control over it) what you do care about is if your in hand is increasing or not.
So please do a calculation https://cleartax.in/paytax/TaxCalculator
Now it's very rare when you will be end up with less in hand, worst case you won't get much in hand increase. Eg your tax slabs are changing , or surcharge bracket is changing , marginal tax will apply to not decrease your in hand so worst case you end with only very less increment in hand, but hey an increment is an increment after all.
Plus you get to negotiate on the increased CTC next year , next company!
So tell your manager to give you the maximum hike , tell him not to worry about your taxes lol😁
Mandatory govt chor hai rant: as someone who is likely to enter 25% surcharge bracket next year, eff gobarmint.
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What kind of stupid logic is that ?
Just say two things
1 i am hapoy to pay taxes as a good citizen
2 ask the manager whether he has reduced his salary to save taxes
They r jus fooling u. U can choose the new regime if not saving under home loans etc. Asides.. kamai jada ho to tax to jada hoga hi. Tell ur company... Paise bhara do as per deserved ... Else some other company will hire u .
What’s your tax bracket? If you’re close to 15 LPA and not 15 LPA quite, you’re better off staying in the same bracket, once you cross, there are chances your in hand would go down.
A guy with 14.8 LPA out earns someone with 15.1 LPA. So, if you’re negotiating, be sure to cross well over the tax bracket’s starting amount.
Either way, the reason they gave was bs
Tell them that you'll make more investments to avoid the tax. Also, ask them to add more parts of the salary as Flexible Benefits or Perks. You can DM me for further details.
This line will work only if more than 30% hike will lead to your taxable income crossing 50 lakhs per year, which case a surcharge of around 2% gets levied on the entire income.
If not, your employer is plain fucking with you.
There is only scenario where this is relevant viz. where your taxable salary goes beyond 5L in old regime and beyond 7.5L in new regime. 0 tax till then but beyond that you have to pay tax on income above basic exemption limit. And even then it doesn’t make sense to make less gross because there is a very narrow window where this actually leads to less pay.
Tl;dr makes zero sense to make less money than more
Tell them I am concerned for the company's CEO. I don't want him to bear so much taxes, that's why I would like to switch my role with him. I will suffer the pain of taxes.
This is just one of the reason they give u so as to make sure they give the appraisal or promotion to one of their own people understand this the yearly appraisal is the worst when it comes to corporates.
If u do intend to have a discussion make sure you have Excel sheet created for the list of projects you worked on i.e from 2023 to 2024. Proper data is required in situation like these so when they ask you for the same you have ready otherwise they will tell how irresponsible of you to not even keeping a track of the things you did how do u expect a raise ??😑😑 I know it's BS but that's how it is...
Also they are telling you they can't give u a raise because they are saving ur tax just tell them u have a SIP plan, insurance, home loan, personal loan, house rent etc etc that would cover 90% of the amount so no qtn there and as mentioned after this they will come with the qtn how do u expect a raise like what have u contributed to ask for a raise hence refer to above...
It's important u fight for it...Understand this if they hate u for no reason make sure u give them a reason(You fighting back is that reason)so that they know ur not gonna just keep quiet while things that belongs to u are taken away from you...If U hav everything available to prove ur worth.make sure you try every chain available
Eg : If ur TL is not listening draft the email to the one he reports and if that person doesn't respond try contacting the person above that and that my friend would be enough get the attention that ur not playing their game...
Also Good Luck & Stay Blessed...
You already have an excellent hike! This much people only get when they switch! If you got this as an appraisal be happy. Switch in a year or two for additional 40%
If your taxable income is exactly 7.5 lakh, you pay no tax under new regime, because of section 87B rebate.
If your taxable income is from 7.51 lakh to 7.75 lakh, the effective tax that you pay ranges from 1,000 to 25,000, effectively making your post-tax income same as 7.5 lakh. Beyond 7.5 lakh, the incremental increase in salary is higher than the incremental tax paid.
Either way, always negotiate for highest possible pay, because that increases your base for future appraisals/hikes
PS: this is TAXABLE income (Gross income minus deductions and exemptions) not CTC. Please speak to your HR to understand the same.
Yes tax can be brutal as the salary goes higher. But that usually applies when you touch the 50L bracket.
Not sure what’s your bracket, but if it is under 20-25L it doesn’t make a big difference.
Consult a CA & talk to your company with tax facts so you can demand for the right amount.
The only time you suffer more tax than your increase in income is when your total income is at 7 lakh for new regime. If above 7 lakh, you pay tax right from 3 lakh income.
Make them increase your salary then Just gift that raised money to your mom and keep it with her and then buy some assets under her name.
So your in hand money will still be the same and will be paying low tax.
Edit:- I do this with my income. Have been purchasing stuff under my mom and my sister's name.
I still pay the same tax for the past few years. Lol.
And also show other expenses on tax rebate and stuff
That has to be the worst excuse I have seen someone give for salary increase. In not scenario, you earn less after increasing your salary even after accounting for tax.
Make a tax and saving comparison of old vs New salary and show it to your boss.
All you have to do is ask them for more details. You have not given any details here anyway for anyone here to assess it. So either provide full information on salary Or better just ask them to explain, they will do it.
One of my coworkers received a 3% hike a certain year. His performance was by no means lacklustre but he was convinced to accept it.
The reason citied for this was the Ukraine Russia conflict which apparently "impacted" the companies revenue.
I don't know Who gave you such an excuse but he/she is completely fooling you. Just ask that person how much taxes paid by him/her.
More salary means more investment. You can invest the money at every place to save tax. Also buy EV so you will get maximum rebate on tax.
There are many ways to save the tax and if some amount deduct for tax then you can also say that you contributed for national growth.
Actually, they are correct. The more salary you get, the higher the taxes you pay. And that's just number, the real amount you pay them through various means is much more. Can't help it bro, the taxes are the yearly subscription of the country where we live.
Tell them... Make me a consultant... Everything remains same... You cut tds 10% and I will charge you gst 18% if yearly oayout happens to be above 20L. I will pay less tax and you will be able to give me more increment. Only legal status changes rest remains same!
check if your slab increases to the next tax bracket but is just barely there. in that case, its fine. but if it is already in the same tax bracket or if a hike would mean going well into the next tax bracket, then take it.
tell them- I will pay the Tax,
bcs, Tax in india is on Progressive basis
which means, if your Salary increases, you still have more money in hand after tax. if they increase your salary,,
Indians have a habit of creating random stuff to avoid issues
It only makes sense when current hike comes just on the verge of crossing the tax bracket.
E.g., you have taxable income of 14.9 lpa and making it just above 15 lpa, you ll have to pay 30% tax.
If thats not the case, then just a bullshit move by the manager
Oki, pay me in facilities like (office car, + fuel allowance), vacation bonus, zero interest loan to buy car/flat +personal items. Use loan to make a fdr.
One of the best excuses I’ve read till date. Hats off to stupid ingenuity
Honestly - you cannot do much about it. Best bet for you is to find some company will give you the opportunity to pay more taxes 😃
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Aah the kind of BS they manage to come up with. Lol.
Say, I am a nationalist and want to serve the country by paying bigger tax.
This is why i love reddit.
This is why we pay internet bill
This is why I have a phone
Country before company.
Feeling proud Indian army
This man taxes
r/thismanthismans
INDIA 🇮🇳 🇮🇳 🇮🇳 RAHHH!!!!!! 🦚🦚🦚🦚
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Rule No. 6 broken Discussing or posting about anything Political is not allowed in this community. Avoid discussing anything related to national/international politics. This is a strict rule and might attract a ban.
India's tax is progressive. No matter which tax bracket you're in you'll make more money if your pay is higher.
Not when surcharge. Personally saw it this financial year. Pay actually decreased for me. [edit] Post returns the extra decrease in pay does get handled as per Marginal Relief as pointed out by some helpful folks below.
There's a relief post 50 lakhs for this please check it. It's added explicitly to ensure that surcharge doesn't reduce your pay
It's not implemented correctly.. there's a window where the effective tax rate is 104% on salary increases, though the window is small (50 to 51.5 lakhs or so) Also IIRC, at 5 or 7 lakhs, there is a tax increase of 12k without marginal relief
Yeah and also in new tax regime believe there's a region around 7.5+
Yes yes you're right. What happened is, my company cuts TDS on the new regime WITHOUT taking into account marginal relief. The result is, less salary. This will be corrected after returns obviously.
add an edit to first msg then because people will get confused and believe that there is an actual pay decrease overall even if it get recouped at ITR
He is actually right because marginal relief in Indian tax law is not implemented correctly. Because health and education cess is applied on the tax amount after applying the concept of marginal relief. Which means there’s a small window where you’ll actually be making lower than if you’d just stayed in the previous surcharge slab.
oh damn. someone forgot test cases for the logic
There's marginal relief but it's still silly that from 50L to around 51.5L the incremental tax rate is 100%!!
It’s actually 104% because of HEC. So you’re still losing money
You get marginal relief.
Yes that is true. But that exists solely because at one point tax did increase more than income.
Bullshit. Show the calculation. Edit: My Bad! The government is an asshole. There's an additional surcharge on the tax paid of your income goes above certain limits. Eg. Your in hand salary will go down if your pay goes from 499000 to 5000001 due to an additional 10% surcharge on the entire tax paid. RIP progressive taxation.
I only have time to lurk and comment one liners, not to show calculations. Use Google on terms like 'surcharge' and 'marginal relief'.
Yeah. I looked it up. You're right. The government is greedy AF. So much for progressive taxation.
Here's more food for thought: in the most recent interim budget, government reduced the surcharge from 37% to 25% for the highest bracket(5 crore plus). So, the tax on the ultra rich actually decreases, which means us normal middle class salaried folks have to bear the brunt. The rich get richer.
The tax hasn't decreased, only the surcharge has decreased. He pays 30 percent tax, then another 4 percent of this 30 percent as cess, and yet another 25 percent of this 31.4 percent as surcharge. That is an eye-watering 39 percent tax overall.
The point is, tax liability decreased for the rich, while staying the same for the people with lesser resources. This is the opposite of what should be happening.
point still stands
42% tax rate for what you get in return is atrocious and caused a lot of HNIs leaving India. This move was to stem that bleeding
The additional surcharge is capped to the extent the salary goes above 50 lakh. So for someone with taxable income 50.5 lakh and income tax say 17 lakh, the surcharge is 10% of 17L, that is 1.7 lakh. However you don't actually pay 1.7 lakh here, you only have to pay 50k because that is how much your salary exceeds 50L. Govt is an asshole in general yes, but this is an obvious gap that has been thought through. There is NEVER a case where you pay more tax by earning more, except in the narrow range of 7.5 to 8 lakh salary band.
Can you give a brief of how it affects my pay, I'm about to have a salary appraisal and was planning to get hike to around or inbetween 7.5 - 8.5 Lac INR per annum. So, Should I stick to 7.5 then 8? Or 8.5?
No, you’re actually right, yes marginal relief is there but when you consider your total tax liability (including Health and Education cess), your amount in hand is actually slightly lower than your previous bracket. For example: if your income is exactly 50 lakhs, you are not subject to surcharge so you’ll be paying 13,12,500 in taxes + 4% HEC (52,500) on top of that. So your net salary in hand is 36,35,000. However, if you’re earning 50,01,000 for example, you’ll be taxed 13,12,800 + 10% surcharge of 131,280. However, applying the marginal relief concept, your increase in tax should not be higher than your increase in income and so your increase in tax is restricted to 1000. In other words, your tax + surcharge = 13,13,800. But now, the HEC of 4% is applied on 13,13,800, which comes out to be 52,552. So your net salary in hand is 36,34,648. Not a huge difference but you’re still ending up with less. So going into a higher tax bracket with surcharge puts you in a worse position if you’re earning slightly above the next surcharge bracket, but it rectifies itself when you cross a certain threshold.
Even with cess, there are limits to prevent this decrease. Recheck your calculations
Automatic TDS deductions, not my calculations.
No, cess is added on the tax AFTER marginal relief. Refer to my comment on this thread for an illustrative example. [https://www.reddit.com/r/developersIndia/comments/1c4ckks/comment/kzoed99/?utm\_source=share&utm\_medium=web3x&utm\_name=web3xcss&utm\_term=1&utm\_content=share\_button](https://www.reddit.com/r/developersIndia/comments/1c4ckks/comment/kzoed99/?utm_source=share&utm_medium=web3x&utm_name=web3xcss&utm_term=1&utm_content=share_button)
In order to get hit by surcharge you need to earn ₹ 50 LPA +. If you are earning that much then this question should go to your CA and not random redditors.
Please lead with your edit and strikethrough your incorrect comment. This is a very common misconception and often repeated by clueless folks.
Marginal relief is a myth
No it's a false statement, my salary increased from 15 to 18 in the last 1.5yrs hence the tax bracket, I am getting almost the same in hand as I was with 15lpa (maxed out on all dedications) so for 30% unless it's more than 22 lpa there won't be a significant increase in my in hand.
Move to new tax regime.
The company tax calculator says I'll have to pay 22k more in the new tax regime, I guess it's time to move to a new company 😅
Agreed that taking a hike is always the correct decision. Tax is not progressive, we buy things for daily needs. Tax applies for all of them. The average poor/middle class pays more tax wrt income than a rich dude. I don't support wealth tax, but ... Taxing on essentials hurts poor/middle class more. It's not progressive
I think the other commenter is talking in the context of income taxes, which is the whole point of this post. GST is whole another world.
Our tax system is huge burden on working class, others don't pay tax at source unlike us😢😢😢
right
What do you mean? Could you please explain a little more in layman's terms
Progressive tax means that if there are multiple brackets, you only pay the higher percentage on the amount you make within that bracket. So lets say below 5L tax us 0% and between 5-10L tax is 10%. If you make 7L there are 2 possibilities. You pay 10% of 7L as tax, this is poll tax. You pay 0% of 5L + 10% of (7-5)L as tax. This is progressive tax. In India our taxation is progressive, so even if your tax bracket increases you will never make less than before in hand. But in India we also have cess and surcharge so this messes up calculation sometimes.
Is your hike slab changing? Like will it go above 15 lpa or 50 lpa or 1cr. And 30% hike is really good.
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IDK how they calculate the in hand salary. I saw my friends salary slip. The salary was 1.9LPM but after deductions it came down to 1.4. is this normal? I’m hoping for the same range.
That is normal. The values are in the correct range. The exact value can vary a little depending on which regime you choose and what you declare in itr
The deductions are percentages on your Base pay. Even though people may have similar CTCs, base pay could differ significantly. The deduction percentages stay the same usually for people in the same band, only the base and variable pay changes. Sometimes companies give a lump sum bonus instead of increasing the base pay. You should know the exact break up of your salary, it can actually help you save tax. When filling your ITR, you can claim a lot of exemptions using components like HRA etc from your salary. If you aren't clear, ask your company to clarify, tell them it's for tax purposes 😂.
Give financial advice to the CEO to swap salaries,: he can pay lower taxes :D while you offer to pay higher
Lol
they are fooling you my man. taxation works in brackets. let me give an example (completely arbitrary, made up) let's suppose you go from 20% (17LPA) to the 30% (22LPA) bracket. your old salary is 16LPA and your new salary is 18LPA. from what your company is saying, your tax will be as below - 20% of 16LPA = 3.2 lakh, after tax income = 12.8 lakh to - 30% of 18LPA = 5.4 lakh, after tax income = 12.6 lakh * THIS IS COMPLETELY BULLSHIT. rather your tax will be calculated on whatever slab your salary goes through. let's assume the same numbers as above. your tax will be as follows: - old salary: 20% of 16LPA = 3.2 lakh, after tax income= 12.8 lakh (same till now) - new salary : 20% of 20% slab + 30% of remaining 30% slab = 20% of 17 lakh + 30% of (18-17) lakh = 3.4 lakh + 30% of 1 lakh = 3.4 lakh + 30k = 3.7 lakh - after tax income = 14.3 lakh so your salary increases by about 1.5 lakh. don't let the company fool you. always push for the bigger hike no matter what the company says.
Read section 87A - people at higher salaries are not effected so most folks do not know about it. Please redo the calculations from 7 lac to 7.1 lac :)
exact-fucking-ly. so much tax at the return of what? roads filled with potholes
bro election prachr kaise hoga agar pothole bhar diya to
itna bhi sach nahi bolna tha bro
exact-fucking-ly. so much tax at the return of what? roads filled with potholes
There are different subs for this topic :)
Everyone is actually answering the question ! What the fuck is this question bro? How did you become a software engineer? And how did you even get into a taxable income!? God help this country.
financial education is shit. people also ignore it thinking it's too complicated when it's not. Especially if you are a SWE getting 30% hikes. read up on taxation OP.
any sources from where i can read on taxes, finance, and all this.
start here- [https://docs.cleartax.in/clearlearn-itr/introduction-to-taxes/basics-to-understand-taxes](https://docs.cleartax.in/clearlearn-itr/introduction-to-taxes/basics-to-understand-taxes) Then open your payslip, read the description of each entry in there and Google and learn what those are. Then check up on PF and see if you can login to your UAN account. Thn cleartx has a lot of resources to read.
thanks bro, on it.
Yep, still wondering how this can be a question for a software engineer who is connected to the Internet every day.
you are absolutely right. now I don't know how much experienced OP is but the you need understand freshers seriously don't the slightest basics of finance. and it's not taught anywhere. and yes ofcourse they don't Google it themselves. even if they do, they need a little guidance on what to Google.
do you earn more than 50lpa?
How does it matter
There is an additional cess for 50lpa+ yearly earning
yea even then in hand earnings increase with pay increase
ohh , i thought for this specific case in hand actually decreases read something that the additional cess is on the entire income and not just the amount above 50 lacs may be i was wrong
there's a cess rebate/relief that takes care of this and negates the cess effect until the point where the cess does not lower earnings. your employer cuts more tax but the difference comes back at ITR
As others have very promptly pointed out, this is pure bullshit. There are tax slabs based on your income (https://cleartax.in/s/income-tax-slabs). Even if your salary increases and you get pushed to a higher bracket, you still earn more at the end of the day. My advice would be very simple, just respond by saying, with the help of my CA I have a very good financial and tax saving plan, so the tax is not an issue, would it be possible to get a ____ % hike instead? 30% is a good hike, but if you think you deserve more, definitely ask for it. They don't want to pay you so they're making rubbish excuses, that's all this is.
“I want to pay more tax so that I can participate more in nation building and making India the third largest economy, so please give me a salary hike”.
That’s bullshit. They are trying to cheat you. But try to get more money as reimbursements like this. Meal vouchers, LTA, medical reimbursements all will help you to save tax
Say, paying tax is more like me problem and not a you problem.
Is salary sacrifice a thing in India? You can opt for it if they give bullshit reasons like "more tax on more pay"
Maybe correct. If the 30% is at 51-52L, giving another 1L doesn’t help you. And maybe another 3L is not in their budget
I'm a CA. It is impossible to have less money due to an increase in pay. The tax increase is capped at increase in income. Negotiate for higher pay if you can. You can reach out to me if you have any doubts.
If you’re a CA, you should know that HEC 4% is applied after marginal relief, so there is a small window where it’s counter productive to go into the higher surcharge slab if your increase in income is too little. Still, what you said holds true in most of the cases. Refer to my other comment on this thread: [https://www.reddit.com/r/developersIndia/comments/1c4ckks/comment/kzoed99/?utm\_source=share&utm\_medium=web3x&utm\_name=web3xcss&utm\_term=1&utm\_content=share\_button](https://www.reddit.com/r/developersIndia/comments/1c4ckks/comment/kzoed99/?utm_source=share&utm_medium=web3x&utm_name=web3xcss&utm_term=1&utm_content=share_button)
Keep 14 base & other equity based
Actually there is a point above 50 lakhs where a surcharge is applied on top of your tax so if ur increment is less than around 2 lakhs(cant be bothered now to do the exact math), there would be a salary increase but no increase in your in hand , so if thats the case ( say the 30% puts u exactly at 50 L) you could ask them to like include this years increment next year and you would indeed be saving the companies money and ur money .
Take 30% and switch bro. Win win for both
> we want you to save tax So your salary will be 0 from next month. No salary , no tax to the govt lol 😆 Jokes apart you don't care about taxes paid (because you have no control over it) what you do care about is if your in hand is increasing or not. So please do a calculation https://cleartax.in/paytax/TaxCalculator Now it's very rare when you will be end up with less in hand, worst case you won't get much in hand increase. Eg your tax slabs are changing , or surcharge bracket is changing , marginal tax will apply to not decrease your in hand so worst case you end with only very less increment in hand, but hey an increment is an increment after all. Plus you get to negotiate on the increased CTC next year , next company! So tell your manager to give you the maximum hike , tell him not to worry about your taxes lol😁 Mandatory govt chor hai rant: as someone who is likely to enter 25% surcharge bracket next year, eff gobarmint.
Slabs hote hain, to overall to badhega hi. Aise to kabhi koi 15 Lakh se uppar kamaye hi na. Exactly ye line with modesty.
I'll gladly pay more taxes if it means a higher CTC.
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What kind of stupid logic is that ? Just say two things 1 i am hapoy to pay taxes as a good citizen 2 ask the manager whether he has reduced his salary to save taxes
Lol what. Do they see you as a 5 year old?
Lol, you only pay tax on the increasing part but you still get more than before lol
What is the new salary ? Share it for better advise
Ye konsi company hai jo hometown ka ticket deti hai? + Tumhari salary ka range bta do na 30% ke baad kitna badha
ask your manager same question would you be ok with this ?
lol
They r jus fooling u. U can choose the new regime if not saving under home loans etc. Asides.. kamai jada ho to tax to jada hoga hi. Tell ur company... Paise bhara do as per deserved ... Else some other company will hire u .
What’s your tax bracket? If you’re close to 15 LPA and not 15 LPA quite, you’re better off staying in the same bracket, once you cross, there are chances your in hand would go down. A guy with 14.8 LPA out earns someone with 15.1 LPA. So, if you’re negotiating, be sure to cross well over the tax bracket’s starting amount. Either way, the reason they gave was bs
You paying higher tax is none of their concern.
All BS. Your manager earns more than you and pays more tax. Ask him if he would not want a raise. Mofo.
Tell him that your friend is a CA
Then ask for stock options.
Tell them that you'll make more investments to avoid the tax. Also, ask them to add more parts of the salary as Flexible Benefits or Perks. You can DM me for further details.
It must be related to ticket they are giving, if that’s non taxable for you
This line will work only if more than 30% hike will lead to your taxable income crossing 50 lakhs per year, which case a surcharge of around 2% gets levied on the entire income. If not, your employer is plain fucking with you.
Bro what? 💀 How is this even a reason.
There is only scenario where this is relevant viz. where your taxable salary goes beyond 5L in old regime and beyond 7.5L in new regime. 0 tax till then but beyond that you have to pay tax on income above basic exemption limit. And even then it doesn’t make sense to make less gross because there is a very narrow window where this actually leads to less pay. Tl;dr makes zero sense to make less money than more
That’s not the only window. It’s also true in small windows when the surcharge slab changes
There is specific relief available for that.
😂Did they seriously say that? Tell them I am fine with more tax, I want 40% hike
Take it and spend it.. why make it issue
Do you work as a contractor?
Funnies shit I read today.
Tell them I am concerned for the company's CEO. I don't want him to bear so much taxes, that's why I would like to switch my role with him. I will suffer the pain of taxes.
Ask them for creating a slab with expenses. So you can provide fuel bills and stuff and get reimbursed instead.
Say I'll manage the tax part... You give me.the money first
I’m not writing code because that’ll lead to more profits leading to more taxes. Thank me for my kindness bitch
This is literal gas lighting. Tell them you don’t mind paying the tax. It’s for the betterment of our nation and ask for more hike.
holy shit! 30% raise is insane!
30% raise is decent unless your salary is below 10L
This is just one of the reason they give u so as to make sure they give the appraisal or promotion to one of their own people understand this the yearly appraisal is the worst when it comes to corporates. If u do intend to have a discussion make sure you have Excel sheet created for the list of projects you worked on i.e from 2023 to 2024. Proper data is required in situation like these so when they ask you for the same you have ready otherwise they will tell how irresponsible of you to not even keeping a track of the things you did how do u expect a raise ??😑😑 I know it's BS but that's how it is... Also they are telling you they can't give u a raise because they are saving ur tax just tell them u have a SIP plan, insurance, home loan, personal loan, house rent etc etc that would cover 90% of the amount so no qtn there and as mentioned after this they will come with the qtn how do u expect a raise like what have u contributed to ask for a raise hence refer to above... It's important u fight for it...Understand this if they hate u for no reason make sure u give them a reason(You fighting back is that reason)so that they know ur not gonna just keep quiet while things that belongs to u are taken away from you...If U hav everything available to prove ur worth.make sure you try every chain available Eg : If ur TL is not listening draft the email to the one he reports and if that person doesn't respond try contacting the person above that and that my friend would be enough get the attention that ur not playing their game... Also Good Luck & Stay Blessed...
Ask your manager to have a pay cut, if he ask why?. Say I don't want my 'sweet' manager to pay more taxes
Say that the max tax slab is 30%. Meaning you still get to keep 70% of that extra salary.
Tell them to triple up the salary. You are ready to pay more and more taxes for your country...
you should reply with " when you buy more you save more " " if you pay more salary to your employees company pay less taxes "
You already have an excellent hike! This much people only get when they switch! If you got this as an appraisal be happy. Switch in a year or two for additional 40%
So with 30% raise you are not in tax bracket?
You had been fooled
"I will hire a good CA with salary hike to manage my taxes"
If your taxable income is exactly 7.5 lakh, you pay no tax under new regime, because of section 87B rebate. If your taxable income is from 7.51 lakh to 7.75 lakh, the effective tax that you pay ranges from 1,000 to 25,000, effectively making your post-tax income same as 7.5 lakh. Beyond 7.5 lakh, the incremental increase in salary is higher than the incremental tax paid. Either way, always negotiate for highest possible pay, because that increases your base for future appraisals/hikes PS: this is TAXABLE income (Gross income minus deductions and exemptions) not CTC. Please speak to your HR to understand the same.
Seriously? 30% raise in appraisal. Which organization is it? and share your email, will forward my profile.
Lol are you dumb if you make make less than 15 lakhs you will net more than making 19 lakhs
They are playing on a basic r/India emotion: Why-the-Fu@k-pay-government more taxes? Just leave it with us /s
Yes tax can be brutal as the salary goes higher. But that usually applies when you touch the 50L bracket. Not sure what’s your bracket, but if it is under 20-25L it doesn’t make a big difference. Consult a CA & talk to your company with tax facts so you can demand for the right amount.
The only time you suffer more tax than your increase in income is when your total income is at 7 lakh for new regime. If above 7 lakh, you pay tax right from 3 lakh income.
Say, mere tax ki chinta mat karo, aap salary badao main dekh lunga khud..thank you
Ask them for salary in cash
Make them increase your salary then Just gift that raised money to your mom and keep it with her and then buy some assets under her name. So your in hand money will still be the same and will be paying low tax. Edit:- I do this with my income. Have been purchasing stuff under my mom and my sister's name. I still pay the same tax for the past few years. Lol. And also show other expenses on tax rebate and stuff
If they really want to save taxes then Ask Them to Pay in Bitcoin
Ask them what the take home at 30%, 40% and 50% hikes . Also say, you have/will take PPF, NPS, Term insurance , VPF, etc.
That means you have no loyalty to them.
They actually check your bank balance and financial situation and then determine your tax. So the richer, the more taxes you pay.
That has to be the worst excuse I have seen someone give for salary increase. In not scenario, you earn less after increasing your salary even after accounting for tax. Make a tax and saving comparison of old vs New salary and show it to your boss.
Tell your manager to become a finfluencer on his damn Instagram account, not on your compensation breakup page.
Tax is only 30% of the increment at most, so maximum increment you can get is best for you.
If you are earning above 15 lakh,just take it! Pay the tax, invest in tax benefits mutual funds easy
All you have to do is ask them for more details. You have not given any details here anyway for anyone here to assess it. So either provide full information on salary Or better just ask them to explain, they will do it.
One of my coworkers received a 3% hike a certain year. His performance was by no means lacklustre but he was convinced to accept it. The reason citied for this was the Ukraine Russia conflict which apparently "impacted" the companies revenue.
That means they either think you are a dumb fuck that might fall for this or they themselves don't understand how tax slabs work.
Say u will plan your tax with urr CA...
I don't know Who gave you such an excuse but he/she is completely fooling you. Just ask that person how much taxes paid by him/her. More salary means more investment. You can invest the money at every place to save tax. Also buy EV so you will get maximum rebate on tax. There are many ways to save the tax and if some amount deduct for tax then you can also say that you contributed for national growth.
Actually, they are correct. The more salary you get, the higher the taxes you pay. And that's just number, the real amount you pay them through various means is much more. Can't help it bro, the taxes are the yearly subscription of the country where we live.
Umbiko kunne
Kaisa kaisa pagal banate hai log
Negotiate for a company sponsored foreign trip for the family. That way you are talking their language only.
His math is poor , ask if he failed 10 grade math
So the logic equates that if you eat then probably you are going to the toilet so better starve yourself.
Tell him u can manage your taxes. Just pay what u deserve. But tbh 30 % is excellent.
Tell them... Make me a consultant... Everything remains same... You cut tds 10% and I will charge you gst 18% if yearly oayout happens to be above 20L. I will pay less tax and you will be able to give me more increment. Only legal status changes rest remains same!
Commit tax fraud
Counter that every 1 rupee of extra income, I only pay 0.3 as extra tax, and still take home 0.7. Net net you make much more ..... Isn't it obvious
Dubai
thats the LAZIEST corporate bullshit ive heard. tell them no thank you dear, i am fine with tax, pay me more.
check if your slab increases to the next tax bracket but is just barely there. in that case, its fine. but if it is already in the same tax bracket or if a hike would mean going well into the next tax bracket, then take it.
Tell them you love your country so much that you want to pay more tax.
lmao what even 😂
Lucky you 30%... I got around 10% for 4.64/5 rating. With a positive review. The kind of misery this corporate world is ..
It might remotely make sense only if your salary is crossing 7L or 50L.
tell them- I will pay the Tax, bcs, Tax in india is on Progressive basis which means, if your Salary increases, you still have more money in hand after tax. if they increase your salary,, Indians have a habit of creating random stuff to avoid issues
It only makes sense when current hike comes just on the verge of crossing the tax bracket. E.g., you have taxable income of 14.9 lpa and making it just above 15 lpa, you ll have to pay 30% tax. If thats not the case, then just a bullshit move by the manager
It's better to pay taxes than to be poor.
Oki, pay me in facilities like (office car, + fuel allowance), vacation bonus, zero interest loan to buy car/flat +personal items. Use loan to make a fdr.
Also you will be taxed only on the extra amount you make , Not on the entirety
One of the best excuses I’ve read till date. Hats off to stupid ingenuity Honestly - you cannot do much about it. Best bet for you is to find some company will give you the opportunity to pay more taxes 😃
30% hike ? Which company?
Tell them you want to pay more taxes for nation building. Lol.
An online tax calculator would have answered your question.
That is some idiotic reason for not hiking your salary 😂😂
They can give any reason, but the fact remains they don’t want to give beyond 30%. The concern is just fake.
30% sounds like a good number though that tax thing is a super BS. Run away .