Monthly Budget Template for India

The choice between India's old and new tax regimes shapes how a budget works in practice. Under the new regime (2025-26), income up to INR 12 lakh is effectively tax-free for salaried individuals after the standard deduction - a simpler structure with lower rates but virtually no deductions. Under the old regime, the headline rates are higher, but deductions under Section 80C (up to INR 1.5 lakh for PPF, ELSS, EPF, life insurance), HRA exemption, NPS (additional INR 50,000 under 80CCD(1B)), and home loan interest under Section 24 can reduce taxable income substantially. Which one works out better depends on how many deductions an individual can actually claim.

EPF contributions at 12% of basic salary from both employee and employer mean that a meaningful portion of income never reaches the bank account. For someone earning INR 8 lakh in basic salary, that is INR 96,000 per year from each side directed to EPF before any other deductions. The in-hand salary - the number that actually gets credited after EPF, professional tax, and TDS - is the only realistic starting point for budgeting. PPF at 7.1% interest with full EEE status and NPS with its additional INR 50,000 tax deduction offer distinct pathways for supplementing EPF, each with different lock-in periods and withdrawal rules.

Indian expense patterns have a rhythm that generic budgets miss. Festival spending in October and November, school fee cycles in April and October, and the familiar March rush to complete tax-saving investments all create predictable peaks. Spreading an INR 1.5 lakh Section 80C target across twelve monthly SIPs of roughly INR 12,500 tends to be more manageable than scrambling for a lump sum at year-end. HRA exemptions for those paying rent can add another INR 1-2 lakh of tax reduction under the old regime, making rent receipts and careful declaration worth the administrative effort.