What is CTC in salary?

CTC (Cost to Company) is the total annual cost that an employer incurs for an employee. It includes gross salary, employer PF contribution, gratuity, and other benefits. CTC is always higher than your take-home salary.

How is in-hand salary calculated from CTC?

In-hand salary = CTC − Employer PF − Employee PF − Professional Tax − Income Tax (TDS). Common deductions include 12% of basic salary to PF from both sides and professional tax up to ₹2,400/year depending on your state.

What is the standard deduction for salaried employees?

From FY 2023-24 onward, salaried employees get a standard deduction of ₹50,000 per year, which directly reduces their taxable income.

What is the new tax regime vs old tax regime?

The new tax regime (default from FY 2023-24) offers lower tax slabs but allows fewer deductions. The old regime allows deductions like HRA, 80C, 80D but has higher base rates. Use this calculator to compare both.

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Salary Calculator

Calculate your in-hand salary from CTC. Breakdown includes HRA, PF, Professional Tax, standard deduction, and net monthly take-home. Free, accurate, private.

Annual CTC (₹) *

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Annual Salary Breakdown

Monthly In-Hand Salary

Frequently Asked Questions

What is CTC?

CTC (Cost to Company) is the total annual cost to the employer — includes gross salary, employer PF, gratuity, and other benefits. Your take-home is typically 40–50% of CTC.

How is in-hand salary calculated?

In-hand = CTC − employer PF − employee PF − professional tax − income tax (TDS). Basic is typically 40–50% of CTC. HRA exemption reduces taxable income further.

What is HRA exemption?

House Rent Allowance exemption is the minimum of: (1) actual HRA received, (2) rent paid − 10% of basic, or (3) 50% of basic for metro cities, 40% for non-metro. This reduces your taxable income.

What is Professional Tax?

State-level tax deducted from salary. Karnataka: ₹200/month (₹150 in Feb). Maharashtra: up to ₹200/month. Delhi, UP, Rajasthan have no professional tax.

What is standard deduction?

₹50,000/year flat deduction for all salaried employees from FY 2023-24. This directly reduces your taxable income, lowering your tax liability.

New vs old tax regime? Which should I choose?

New regime (default): lower slab rates but fewer deductions. Old regime: higher base rates but allows deductions like HRA, 80C, 80D. Most salaried employees save more with old regime. Compare both annually.

What is the employer PF contribution?

Employer contributes 12% of basic salary to your Provident Fund (PF) account — it's free money for retirement, not a deduction from your salary.

Why is my in-hand salary so much lower than CTC?

Employer PF (12%), Employee PF (12%), Professional Tax (up to ₹200/month), and Income Tax (20–30% of taxable income) are the main deductions. Together, they often reduce take-home to 40–55% of CTC.

Can I change my HRA if I move to a different city?

Yes, HRA changes if your rent changes or you move to a metro/non-metro city. Inform HR with updated rent agreement. This may increase/decrease your take-home salary.

What is gratuity and how does it affect my salary?

Gratuity (retirement benefit) is usually 4.81% of basic salary (accumulated for 5+ years service). It's part of CTC but paid as a lump sum only at retirement/separation.

How do I calculate my annual income tax slab?

New regime slabs (FY 2024-25): 0–₹3L (0%), ₹3–6L (5%), ₹6–9L (10%), ₹9–12L (15%), ₹12–15L (20%), ₹15L+ (30%). Plus 4% health and education cess on tax.

Can I get my PF money before retirement?

Partial withdrawal allowed for education, home purchase, or medical emergencies (after 7 years). Full withdrawal only at retirement (after 5 years without withdrawals).

Understanding Your Salary Breakdown

CTC (Cost to Company) is what your employer pays in total — it includes your salary, employer PF contribution (12% of basic), gratuity fund, and other benefits. However, your in-hand salary (take-home) is typically 40–50% lower due to mandatory deductions.

Your take-home salary in India depends on: Basic salary (usually 40–50% of CTC), HRA exemptions (based on rent paid and location), Professional Tax (state-dependent, up to ₹2,400/year), Employee PF (12% of basic, capped at ₹18,000/month), and Income Tax (based on new regime slabs).

This calculator uses India's new tax regime (default from FY 2023-24) with updated slab rates and a flat standard deduction of ₹50,000 — giving lower tax for most salaried employees.

📋 Salary Planning Guide

💰

Budget Rule: 50-30-20

Allocate 50% for needs (rent, food, utilities), 30% for wants (dining, entertainment), 20% for savings (EMI, investments, emergency fund).

🎯

Emergency Fund

Keep 6 months of expenses in a liquid savings account. This protects against job loss, medical emergencies, or unexpected expenses.

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Tax-Saving Investments

Invest in Section 80C (PPF, ELSS, Life Insurance) up to ₹1.5L annually to reduce taxable income. This directly lowers your tax liability.

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PF & Retirement

Your employer PF (12%) + your contribution (12%) = 24% annual savings. This grows tax-free and becomes significant by retirement.

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📌 Typical Salary Split

Basic Pay 40–50% of CTC

HRA 40–50% of Basic

Employer PF 12% of Basic

Employee PF 12% of Basic

Gratuity 4.81% of Basic