Question 1

What is the New Wage Code 2025 and how does it affect my salary?

Accepted Answer

The New Wage Code (Code on Wages, 2019), effective from 21 November 2025, mandates that basic salary must be at least 50% of your CTC (up from the previous 40%). This increases your basic pay, which means higher PF contributions (good for retirement) but potentially lower immediate take-home pay due to increased deductions.

Question 2

How much will my take-home salary reduce under the New Wage Code?

Accepted Answer

For a typical ₹12 LPA CTC, monthly take-home may reduce by approximately ₹2,000-5,000 depending on your state and tax regime. However, your annual PF contribution increases by ~₹43,000, significantly boosting your retirement corpus.

Question 3

When does the 50% basic pay rule become mandatory?

Accepted Answer

The New Wage Code with 50% basic pay rule becomes effective from 21 November 2025. Employers must restructure salaries to comply with this requirement.

Question 4

What is the new regime ₹60,000 rebate in FY 2025-26?

Accepted Answer

For FY 2025-26 (AY 2026-27), the new tax regime offers a rebate of up to ₹60,000 that is directly deducted from your computed tax liability. This rebate is applied before calculating cess and surcharge, significantly reducing tax burden for middle-income earners.

Question 5

Which is better: Old Rules or New Wage Code (50% basic)?

Accepted Answer

New Wage Code (50% basic) is better for long-term retirement planning due to higher PF accumulation. However, Old Rules provided higher immediate take-home pay. From 21 Nov 2025, all employers must follow the New Wage Code, so it's mandatory rather than optional.

Question 6

Does the calculator support all Indian states?

Accepted Answer

Yes, the calculator includes professional tax rates for all major Indian states including Maharashtra (₹2,500), Karnataka (₹2,400), Tamil Nadu (₹2,400), West Bengal (₹2,500), and others. Professional tax is automatically included in the in-hand salary calculation.

New Wage Code Calculator 2025: Compare Old vs New Rules

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