Taxable salary is the figure that actually gets taxed: your gross salary including taxable perks, minus the exemptions and salary-level deductions the law allows. It is neither your CTC nor your take-home pay, and it is the number payroll uses to work out TDS on salary every month.

How the number is built

Start with everything the employer pays or provides for the year: basic, DA, HRA, special allowance, bonus, and the value of taxable perquisites. Then take away, in this order:

1. Allowances that are exempt in full or in part, such as HRA, LTA and the allowances covered by Section 10(14) (old regime only)
2. The standard deduction
3. Professional tax actually paid in the year (old regime)

What remains is “income from salary”. Other income and Chapter VI-A deductions such as 80C and 80D are applied after that, to reach total taxable income. They are not part of taxable salary itself, which is why the Form 16 shows them on separate lines.

A short example

Take the old regime for FY 2025-26, with a standard deduction of Rs 50,000. An employee has gross salary of Rs 12,00,000, an HRA exemption of Rs 1,20,000 and professional tax of Rs 2,400.

The same person has a take-home well below this, because PF and tax come off the monthly pay, and a CTC well above it, because employer PF and gratuity sit in CTC. Three different numbers, three different purposes.

What changed with the new Act

The 2025 Act still builds salary income the same way. Secondary sources map the salary charging provision to Section 15, the definition to Section 16, perquisites to Section 17 and salary deductions to Section 19, but confirm the mapping on the portal before you cite a number to anyone. In the new regime, the exemptions and professional tax deduction mostly fall away, so taxable salary is closer to gross minus the standard deduction.

Frequently asked questions

Is taxable salary the same as net salary?

No. Net salary is what lands in the bank after PF, tax and other deductions. Taxable salary is a tax-computation figure and is usually much higher than net pay.

Are reimbursements part of taxable salary?

Genuine reimbursements against bills, such as a phone bill reimbursement, are normally outside it. A flat allowance paid without bills generally is not.

Which Form 16 line shows it?

Part B of Form 16 shows gross salary, exemptions, deductions and the resulting salary income. For tax year 2026-27 onwards the certificate is Form 130.

Plug in your own figures with the income tax calculator, or see how it differs from pay in hand using the take-home salary calculator.