Why Your Hike Feels Smaller
- Marginal tax: the extra salary is taxed at your highest slab, so the after-tax raise is often smaller in percentage terms than the headline raise.
- Inflation: if prices rise 6% and your take-home rises 6%, you are no better off.
- Crossing ₹12.75 lakh: just above this salary the rebate stops covering your tax, so a hike can add noticeable tax all at once. Marginal relief softens the jump.
Compare regimes in detail with the New vs Old Tax Regime Calculator. Read more on lifestyle creep.