CTC vs in-hand salary
CTC (Cost to Company) is everything your employer spends on you — it includes parts you never see in your bank account, like the employer's PF contribution and gratuity. Your in-hand (take-home) salary is what's left after PF, professional tax and income tax are deducted from your gross.
How this is calculated
- Gross salary = CTC − employer PF contribution (12% of basic, if it's part of your CTC).
- Employee PF = 12% of basic, deducted from your salary and saved for you.
- Professional tax ≈ ₹2,400/year (varies by state; some have none).
- Income tax (TDS) = tax on your taxable income under the chosen regime, with the standard deduction and rebate applied.
- In-hand = Gross − employee PF − professional tax − income tax.
Frequently asked questions
Why is my in-hand much less than my CTC?
Because CTC includes employer PF and gratuity (not paid to you monthly), and your in-hand is after PF, professional tax and income tax. A 12-lakh CTC commonly lands around ₹85k–₹95k in hand.
Is this exact?
It's a close estimate. Your actual payslip depends on your company's exact structure (HRA, allowances, gratuity, NPS, insurance) and your state's professional tax.
New or old regime for salary?
Most salaried people now save more on the new regime unless they have large 80C/HRA/home-loan deductions. Try both here.