Salary Breakdown
What is CTC and How is In-Hand Salary Calculated?
CTC (Cost to Company) is the total annual expense your employer incurs for employing you — it includes your gross salary, employer's PF contribution, gratuity provisions, and any other benefits. Your in-hand (take-home) salary is what actually gets credited to your bank account after statutory deductions. The formula is: In-Hand = Gross Salary − Employee PF − Income Tax (TDS) − Professional Tax. Gross salary = CTC minus employer's PF contribution and gratuity. Basic salary is typically 40–50% of CTC, with HRA and special allowances making up the rest.
In-Hand Salary Examples by CTC (New Tax Regime, 2025)
₹6 LPA CTC: Monthly gross ≈ ₹48,000. PF deduction ≈ ₹1,730/month. No income tax (below ₹7 lakh threshold under new regime). Professional tax ≈ ₹200/month. Monthly in-hand ≈ ₹46,000. ₹10 LPA CTC: Monthly gross ≈ ₹80,000. PF ≈ ₹2,880/month. TDS ≈ ₹625/month. Professional tax ≈ ₹200/month. Monthly in-hand ≈ ₹76,000–₹77,000. ₹15 LPA CTC: Monthly gross ≈ ₹1,20,000. PF ≈ ₹4,320/month. TDS ≈ ₹5,000–₹6,000/month. Professional tax ≈ ₹200/month. Monthly in-hand ≈ ₹1,10,000–₹1,11,000. These are estimates — actual amounts vary by employer salary structure.
New Tax Regime vs Old Tax Regime — Which to Choose?
The new tax regime (default from FY 2023–24) offers lower tax slab rates but removes most exemptions and deductions — no HRA, no 80C, no 80D, no LTA. The old regime has higher base rates but allows these deductions. For employees with CTC below ₹12 lakh and minimal deductions, the new regime is simpler and typically results in equal or lower tax. For employees with home loans, HRA, and full 80C utilisation, the old regime may still be more beneficial. The standard deduction of ₹75,000 applies under the new regime from FY 2024–25.
PF Deduction — How It Works
Employee Provident Fund (EPF) contribution is 12% of your basic salary, deducted from your gross pay each month. Your employer also contributes 12% — but this comes from their side and is not deducted from your salary. The employee's 12% goes entirely into your EPF account. Of the employer's 12%: 3.67% goes to EPF and 8.33% goes to EPS (Employee Pension Scheme). If your basic salary is ₹24,000/month, your PF deduction = ₹2,880/month. This money accumulates tax-free at 8.25% p.a. and is available at retirement or after leaving employment.
Professional Tax — State-Wise Deduction
Professional tax is a state-level tax levied on salaried employees. It varies significantly by state. Maharashtra deducts ₹200/month (₹2,400/year) for salaries above ₹10,000. Karnataka deducts ₹200/month for most salary brackets. West Bengal, Andhra Pradesh, Telangana, and Tamil Nadu also levy professional tax. States like Delhi, Haryana, Punjab, Rajasthan, Uttar Pradesh, and Gujarat do not levy professional tax. This calculator uses ₹2,400/year as the standard estimate — adjust based on your state.
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Frequently Asked Questions
In-hand = Gross Salary − Employee PF (12% of Basic) − Income Tax (TDS) − Professional Tax. Gross salary = CTC minus employer PF and gratuity. Basic is typically 40–50% of CTC. The rest is HRA, special allowances, and other components.
For ₹10 LPA under the new tax regime with PF, approximate monthly in-hand is ₹76,000–₹77,000. Deductions: employee PF ≈ ₹2,880/month, TDS ≈ ₹625/month, professional tax ≈ ₹200/month. Actual amount varies by your employer's salary structure.
New regime (default): lower rates, no HRA/80C/80D deductions, ₹75,000 standard deduction. Old regime: higher base rates but allows HRA, 80C up to ₹1.5L, 80D, home loan interest, etc. For CTC below ₹12L with few deductions, the new regime is usually better. Above ₹12L with full deduction claims, compare both.
PF is mandatory for employees with basic salary up to ₹15,000/month at companies with 20+ employees. Above ₹15,000 basic, it is optional — both employee and employer can choose to opt out. Many companies include PF for all employees regardless. Select "No" in the calculator if your employer doesn't deduct PF.
Professional tax is a state-level salary deduction. Maharashtra, Karnataka, West Bengal, Andhra Pradesh, Telangana, and Tamil Nadu charge it — typically ₹200/month. Delhi, Haryana, Punjab, Rajasthan, Gujarat, and UP do not. This calculator uses ₹2,400/year as the standard estimate.