Personal Finance FAQs

In-hand salary is the amount that actually reaches your bank account each month. It is calculated after deducting income tax, provident fund (PF), professional tax, and other mandatory deductions from your gross salary.

Many people confuse CTC with take-home pay, but CTC includes components you don’t immediately receive (like employer PF contributions or benefits). If you want to see an exact breakdown for your salary, you can use the In-Hand Salary Calculator.

Form 16 is a certificate issued by your employer that summarises your salary and the tax deducted (TDS) during the financial year. It acts as proof that tax has been paid on your behalf.

While filing your income tax return, Form 16 helps you verify salary figures, deductions, and taxes already paid. For a line-by-line explanation, see our Form 16 Guide.

The old tax regime allows deductions (like 80C, HRA, 80D), while the new regime offers lower slab rates but removes most deductions. There is no universally “better” option — the right choice depends on your income level and how many deductions you actually use.

A quick comparison using your real numbers helps avoid assumptions. You can compare both options using the Tax Regime Calculator.

Legal tax reduction comes from planning, not shortcuts. Common methods include using deductions (like PF, ELSS, NPS, health insurance), optimising salary structure, and choosing the right tax regime.

The goal is not to eliminate tax, but to pay only what is legally required. Our Salary Optimisation Guide explains this in detail.

A salary slip breaks your pay into earnings (basic, HRA, allowances) and deductions (PF, tax, professional tax). Understanding this helps you verify whether tax and PF are calculated correctly.

If the components feel confusing, our Salary Slip Explained article walks through each line item.

A monthly budget is a simple plan for how your income will be spent and saved. It ensures that essentials are covered, savings are prioritised, and discretionary spending stays within limits.

Budgeting is not about restriction — it’s about clarity. You can create one using the Monthly Budget Calculator.

An emergency fund is money set aside for unexpected events like job loss, medical emergencies, or urgent repairs. It prevents you from relying on loans or credit cards during crises.

Most households aim for 3–6 months of essential expenses. You can estimate yours using the Emergency Fund Calculator.

There is no single correct percentage. Savings depend on income stability, goals, and responsibilities. The key is consistency — saving something regularly matters more than saving a lot occasionally.

To align savings with goals, try the Savings Goal Calculator.

The 50-30-20 rule is a simple guideline: 50% needs, 30% wants, 20% savings. It works as a starting framework, not a strict rule.

Indian expenses vary widely, so flexibility is essential. Learn how to adapt it in 50-30-20 Explained.

Good money management comes from awareness, planning, and review — not extreme frugality. Tracking expenses, budgeting, and reviewing progress once a month is usually enough.

Our Money Management Basics guide covers this step by step.

Term insurance should replace your income if something happens to you. The amount depends on income, dependents, loans, and future goals — not just a fixed multiple.

A realistic estimate can be done using the Cover Requirement Calculator.

If anyone depends on your income, term insurance is essential. It provides financial protection at a low cost and ensures your family’s lifestyle is not disrupted.

Learn why it matters in our Term Insurance Guide.

Health insurance primarily covers hospitalisation expenses, including room charges, doctor fees, and procedures. Coverage details vary by policy and insurer.

Understanding exclusions is critical. Our Health Insurance Basics explains this clearly.

Riders add specific protections (like critical illness or accidental cover). Some riders add value, others don’t. The decision depends on personal risk exposure.

See examples in Insurance Riders Explained.

Insurance protects your financial base, while investments grow wealth. Protection should always come before investing.

This distinction is explained in Insurance vs Investment.

SIP (Systematic Investment Plan) allows you to invest a fixed amount regularly in mutual funds. It builds discipline and reduces timing risk over long periods.

Start with the SIP Investing Hub.

The required SIP depends on how early you start and expected returns. Starting early significantly reduces the monthly burden.

See real scenarios in ₹1 Crore SIP Scenarios.

SIPs suit most investors because they remove timing stress. Lump-sum investing can work when markets are clearly undervalued and the investor is comfortable with volatility.

Compare both in Lumpsum vs SIP.

Real returns measure growth after inflation and tax. They show whether your wealth is actually increasing in purchasing power.

Learn more in Real Returns Guide.

Beginners should focus on simplicity, diversification, and long-term discipline — not frequent trading.

Visit the Investing Hub to start.

EMI (Equated Monthly Installment) is the fixed payment made towards a loan. It includes both interest and principal repayment.

Use the EMI Calculator to understand the breakup.

Prepayment reduces interest but also locks money into the loan. Sometimes investing surplus funds may offer better long-term outcomes.

This trade-off is explained in Prepayment vs Investing.

Home loans are long-term borrowings with EMIs spread over many years. Early years mostly pay interest, later years repay principal.

Read the Home Loan Guide for details.

Personal loans should be used only for genuine needs, not lifestyle upgrades, because interest rates are high.

Explore implications in the Loans Hub.

Choosing shorter tenures, negotiating rates, and timely prepayments reduce interest significantly.

Tools in the Loans Hub can help plan this.