Understanding Your Take-Home Pay with a 7 LPA Package at Infosys

After successfully being selected at Infosys with a package of 7 LPA (Lakhs Per Annum) with a variable pay component, it's natural to wonder about your take-home pay. This comprehensive guide will break down the various components of your salary, deductions, and your estimated take-home pay.

Basic Salary and Allowances

Typically, 50% of your CTC (Cost to Company) is allocated to the basic salary. For a 7 LPA package, this would equate to:

Basic Salary: 3.5 LPA

The remaining amount is divided into various allowances such as HRA (House Rent Allowance) and other allowances. Assuming the following:

HRA: 20% of Basic 0.7 LPA Other Allowances: 3.8 LPA (this includes a variable pay component)

Deductions

Provident Fund (PF) Deduction

The PF (Provident Fund) is a mandatory contribution to your retirement fund. Typically, 12% of your basic salary goes into PF:

PF Deduction: 0.42 LPA

Professional Tax

Professional Tax varies by state and can be approximately 2500 per annum, which translates to around 0.025 LPA.

Income Tax

The new tax slabs for the financial year 2023-24 for individuals under 60 years are as follows:

Up to 2.5 lakh: No tax 2.5 lakh to 5 lakh: 5% 5 lakh to 7.5 lakh: 10%

Assuming you have no significant deductions, here's how the tax would be calculated:

Calculations:

Total Income: 7 LPA (CTC) - PF (0.42 LPA) - Professional Tax (0.025 LPA) Total Income: 7 LPA - 0.42 LPA - 0.025 LPA 6.55 LPA Tax Calculation: 5% on 2.5 LPA 12500 10% on 1.55 LPA 15500 Total Tax: 28000

Estimated Take-Home Pay Calculation

Gross Salary: 7 LPA

Total Deductions:

PF: 0.42 LPA Professional Tax: 0.025 LPA Income Tax: 0.28 LPA Total Deductions: 0.42 0.025 0.28 0.725 LPA

Annual Take-Home Pay: 7 LPA - 0.725 LPA 6.275 LPA

Monthly Take-Home Pay: 6.275 LPA / 12 Approximately 52292 per month

Summary

Based on the given assumptions, your estimated take-home pay would be around 52292 per month. However, this can vary based on actual deductions and tax-saving investments you may have. For precise calculations, consider consulting with your HR or a financial advisor.

Important Points to Consider

There are several deductions that can impact your take-home pay, including:

PF Contributions: A mandatory 12.5% contribution from both you and your employer. Gratuity: A payment made if you stay in the company for more than 5 years, which is also included in your CTC. Medical Expenses: The cost of medical insurance for you and your dependents is typically included in the CTC and deducted from your in-hand salary. Professional Tax: An optional tax based on your city and company, typically ranging from 200 to 500 per month. Income Tax: The tax you pay on your net earnings, which can be minimized through HRA claims or other investments.

Considering all these points, you may end up with an in-hand salary of around 46-47k per month.