Payroll Deductions Explained: What’s Taken from Your Salary in India

When you get your salary, what you see isn’t always what you earn. Payroll deductions, the amounts subtracted from your gross salary before you receive your take-home pay. These include taxes, retirement contributions, and other legally required or voluntary withholdings. In India, these deductions aren’t random—they follow rules set by the Income Tax Department, EPFO, and state governments. Knowing what’s taken out helps you plan better, spot errors, and make smarter financial choices.

One of the biggest deductions is Income Tax, the tax you pay on your earnings based on your slab rate. TDS is automatically deducted by your employer each month. Then there’s the Provident Fund (PF), a mandatory savings scheme where both you and your employer contribute 12% of your basic salary. This money grows tax-free and is yours when you retire or leave a job. Another common one is Professional Tax, a state-level tax that varies from ₹200 to ₹2,500 a year depending on where you live. In Uttar Pradesh, including Prayagraj, it’s usually ₹200 monthly. Some companies also deduct for health insurance, group life insurance, or loan repayments—but those are optional.

These deductions aren’t just numbers on a payslip. They shape your long-term security. PF builds your retirement nest egg. Income tax deductions under Section 80C, like ELSS or PPF, reduce your taxable income. Even small things like professional tax add up over time. If you’re confused about why your salary is lower than expected, check your payslip line by line. Look for missing PF contributions, wrong tax slabs, or unauthorized deductions. Many people overpay taxes because they don’t submit proof of investments—like rent receipts or insurance premiums—on time. That’s money you could’ve kept.

Understanding payroll deductions means you’re not just passively receiving a salary—you’re actively managing your money. Whether you work in a government office in Prayagraj, a startup in Noida, or a factory in Lucknow, these rules apply to you. The posts below break down exactly how these deductions work, how to claim refunds, what’s optional, and how to fix mistakes. You’ll find real examples from Indian pay structures, step-by-step guides on reading your payslip, and tips to maximize your take-home pay without breaking any rules.