You cracked the interview. The offer letter says ₹10,00,000 per annum. You're expecting ₹83,333 per month in your account. Then your first salary credit shows ₹71,500 — and you're left wondering where ₹12,000 went every month. This is the classic CTC trap that surprises millions of Indian employees every year. The CTC to in-hand calculator solves this instantly: enter your CTC and it shows you exactly what lands in your bank after every deduction.
This guide explains every component that sits between your CTC and your take-home: Provident Fund (employer and employee), gratuity, income tax under old and new regimes, professional tax, and the various allowances that can boost your in-hand pay when structured correctly.
Find Your Exact Take-Home Salary from CTC
Enter your CTC and salary structure — see your monthly in-hand under both old and new tax regimes instantly.
What is CTC? Understanding Every Component of Your Cost to Company
CTC (Cost to Company) is the total annual amount a company spends on an employee — it includes your salary, benefits, and employer-side statutory contributions. It is NOT what you take home. Here's a standard CTC breakdown for a ₹10 LPA offer:
| CTC Component | Monthly (₹) | Annual (₹) | Notes |
|---|---|---|---|
| Basic Salary | 41,667 | 5,00,000 | Usually 40–50% of CTC |
| HRA | 20,833 | 2,50,000 | Usually 50% of basic (metro) |
| Special Allowance | 10,000 | 1,20,000 | Fully taxable |
| Leave Travel Allowance (LTA) | 2,500 | 30,000 | Exempt with proof (2x in 4 years) |
| Gross Salary (before PF) | 75,000 | 9,00,000 | |
| Employer PF Contribution | 5,000 | 60,000 | 12% of basic — part of CTC, not salary |
| Gratuity (employer) | 2,404 | 28,846 | 4.81% of basic — goes to you after 5 years |
| Total CTC | 82,404 | 9,88,846 ≈ ₹10L |
Notice that employer PF (₹5,000/month) and gratuity (₹2,404/month) are part of your CTC but you never see them in your monthly salary. That alone accounts for ₹7,400/month of the CTC-to-in-hand gap.
Deductions That Reduce Your Gross to In-Hand Salary
Once the gross salary is established, several deductions reduce it to your actual take-home:
1. Employee PF (₹5,000/month)
12% of basic salary is deducted from your salary and deposited into your EPF account. This is your own money accumulating for retirement (plus 8.25% tax-free interest), but it reduces your monthly in-hand by ₹5,000.
2. Income Tax (varies by regime — see next section)
For a ₹10 LPA salary under the old regime with standard deductions and 80C investments, annual tax may be approximately ₹46,000–₹60,000. Under the new regime with no deductions, it's approximately ₹54,600 (after the ₹75,000 standard deduction). Divided over 12 months, TDS is ₹4,000–₹5,000/month.
3. Professional Tax (₹200/month in most states)
Levied by state governments. Maharashtra, Karnataka, and West Bengal charge ₹200/month (₹2,400/year) for salaries above ₹15,000/month. Some states like Delhi, Rajasthan, and Haryana have abolished it.
Resulting In-Hand (₹10 LPA Example — Old Regime)
| Item | Monthly (₹) |
|---|---|
| Gross Salary | 75,000 |
| − Employee PF | −5,000 |
| − TDS (income tax / 12) | −4,500 |
| − Professional Tax | −200 |
| In-Hand Take-Home | ~₹65,300 |
Old vs New Tax Regime: Which Saves More Tax on Your Salary?
From FY 2024-25, the new tax regime is the default. But you can opt back to the old regime annually. Here's how the two compare for a ₹10 LPA gross salary:
| Item | Old Regime | New Regime |
|---|---|---|
| Gross Salary | ₹9,00,000 | ₹9,00,000 |
| Standard Deduction | −₹50,000 | −₹75,000 |
| HRA Exemption | −₹1,50,000 | ₹0 |
| Section 80C | −₹1,50,000 | ₹0 |
| Section 80D (health insurance) | −₹25,000 | ₹0 |
| Taxable Income | ~₹5,25,000 | ~₹8,25,000 |
| Tax Payable (incl. 4% cess) | ~₹26,000 | ~₹54,600 |
| Monthly TDS | ~₹2,167 | ~₹4,550 |
For this profile, the old regime saves ~₹28,600/year (~₹2,383/month). However, this assumes you actually invest ₹1.5 lakh in 80C instruments (PPF, ELSS, LIC, etc.) and pay rent. If you're not utilising these deductions, the new regime's simplicity wins.
Rule of thumb: Old regime wins if your total deductions (HRA + 80C + 80D + home loan interest) exceed ₹3.75 lakh for a ₹10 LPA salary.
Gratuity and PF: The Invisible Parts of Your CTC That Pay Later
Two CTC components that never appear in your monthly salary but have real long-term value:
Gratuity
- Calculated as:
(Basic Salary ÷ 26) × 15 × Years of Service - Employer contributes 4.81% of basic salary into a gratuity fund each year.
- Payable only after 5 continuous years of service.
- For ₹10 LPA with ₹5,000 basic/month: 5-year gratuity = (5,000 ÷ 26) × 15 × 5 = ₹1,44,231
- Tax-free up to ₹20 lakh (as per Payment of Gratuity Act, 1972).
Employee Provident Fund (EPF)
- Employee contributes 12% of basic salary; employer matches 12% (but 8.33% of employer's share goes to EPS — Employee Pension Scheme).
- On ₹41,667 basic: employee EPF = ₹5,000/month, employer EPF = ~₹642/month, employer EPS = ~₹1,250/month.
- EPF earns 8.25% interest (FY 2025-26), compounded annually, completely tax-free on maturity after 5 years.
- You can check your EPF balance on the EPFO portal (epfindia.gov.in) using your UAN.
How to Legally Increase Your In-Hand Salary Without Changing CTC
Smart salary structuring can boost your monthly take-home by ₹3,000–₹8,000 without any actual raise:
- Opt for Voluntary PF (VPF) reduction: If your employer allows, reduce employee PF contribution to the statutory minimum (12%). Some employees over-contribute, reducing take-home unnecessarily.
- Maximise tax-free allowances: Ask HR to restructure your CTC to include meal coupons/Sodexo (₹2,200/month tax-free), phone/internet reimbursement (₹2,000–₹3,000/month), and LTA.
- NPS employer contribution: Employer NPS contribution up to 10% of basic is tax-free for the employee AND deductible for the employer under Section 80CCD(2). This reduces your taxable salary effectively.
- Choose new tax regime if deductions are low: For fresh graduates or those with no rent/investments, the new regime's lower slab rates result in less TDS and higher in-hand.
- Submit investment proofs early (January): If you delay submitting proof, your employer deducts higher TDS in February–March. Submit Form 12BB before January 15 every year.
How to Use the Tool (Step by Step)
- 1
Enter your annual CTC
Type the total CTC mentioned in your offer letter (e.g. ₹10,00,000).
- 2
Enter bonus and variable pay
Add any performance bonus or variable component included in CTC.
- 3
Select tax regime
Choose old or new tax regime to calculate income tax deduction.
- 4
View in-hand salary
See monthly take-home after PF, professional tax, and income tax deductions.
Frequently Asked Questions
What is the in-hand salary for ₹10 LPA CTC in India?+−
For a ₹10 LPA CTC, your in-hand salary typically ranges from ₹65,000 to ₹72,000 per month depending on your tax regime, city (professional tax varies), HRA structure, and PF contributions. A typical breakdown: gross salary ₹75,000, minus employee PF ₹5,000, minus TDS ₹2,500–₹5,000, minus professional tax ₹200. The new tax regime generally results in slightly lower in-hand than the old regime for someone with good 80C investments.
Why is CTC different from gross salary?+−
CTC (Cost to Company) includes gross salary plus employer-side costs that never directly reach you: employer PF contribution (12% of basic), employer ESI contribution (if applicable), gratuity provision (4.81% of basic), and sometimes group health insurance premium. For a ₹10 LPA CTC, these employer costs account for ₹85,000–₹90,000 annually, meaning your gross salary is only about ₹9–₹9.1 lakh even though the CTC says ₹10 lakh.
What is the difference between employee PF and employer PF?+−
Both employee and employer contribute 12% of the employee's basic salary to EPF. Employee PF (12%) is deducted from your salary — it reduces your take-home. Employer PF (12%) comes from the company's own pocket — it's part of your CTC. Of the employer's 12%, only about 3.67% goes to your EPF account; the remaining 8.33% goes to the Employee Pension Scheme (EPS). The full employee contribution of 12% goes into your EPF account.
Is the new tax regime better for a ₹10 LPA salary?+−
It depends on your deductions. If you invest ₹1.5 lakh in 80C instruments, pay rent (HRA exemption), and have a health insurance premium (80D), the old regime saves more tax — potentially ₹25,000–₹30,000 annually on a ₹10 LPA salary. If you don't utilise these deductions (common for first-jobbers), the new regime's lower slab rates result in less tax. Use our CTC calculator to compare both regimes with your actual numbers.
When do I receive gratuity from my employer?+−
Gratuity is paid when you leave the organisation after completing 5 years of continuous service (minimum). It is also paid on retirement, death, or disablement regardless of tenure. The formula is (Last basic salary ÷ 26) × 15 × Years of service. On ₹5 lakh basic salary completing 10 years: (41,667 ÷ 26) × 15 × 10 = ₹2,40,385. Gratuity up to ₹20 lakh is fully tax-exempt for private sector employees.
Can I reduce my EPF contribution to increase in-hand salary?+−
Yes, with limitations. As an employee, you are mandatorily required to contribute 12% of your basic salary (up to ₹15,000 basic cap) to EPF. However, if your basic salary exceeds ₹15,000/month, you and your employer can mutually agree to cap EPF contributions at 12% of ₹15,000 = ₹1,800/month each, instead of the full 12% of actual basic. This is common in higher-salary brackets and can significantly boost your in-hand pay. Consult your HR/payroll team.
Find Your Exact Take-Home Salary from CTC
Enter your CTC and salary structure — see your monthly in-hand under both old and new tax regimes instantly.
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