Salary Calculator (CTC → In-Hand)

CTC (Cost to Company) is the total annual amount your employer spends on you, including parts you never receive in cash such as the employer’s PF contribution and gratuity provisioning. Gross salary is your CTC minus those employer-only components — the pay before your own deductions. In-hand (take-home) salary is what actually reaches your bank account after employee PF, professional tax and income tax are subtracted from the gross. In-hand is always meaningfully lower than CTC.

These three allowances sit inside your gross salary and have very different tax treatments. House Rent Allowance (HRA) is partially or fully exempt from tax under Section 10(13A) if you live in rented accommodation and submit rent receipts — the exempt portion depends on your basic salary, the actual HRA received and your rent paid (metro vs non-metro rules apply). Leave Travel Allowance (LTA) covers travel costs within India for you and your family; two trips in a four-year block are exempt under Section 10(5) on production of proof. Special allowance is a balancing figure — whatever gross pay remains after assigning other named components — and it is fully taxable under both regimes. Under the new tax regime (which this calculator uses by default) HRA and LTA exemptions do not apply, so all three flow into taxable income. Under the old regime they can meaningfully reduce it, which is why the two regimes produce different take-home figures for the same CTC.

At least four structural differences can produce different take-home figures on an identical CTC. First, the basic-salary percentage varies by employer — a 40% basic vs a 50% basic on the same CTC produces different PF and gratuity deductions. Second, some employers cap PF contributions at the statutory 12%-of-₹15,000/month ceiling while others deduct on the full basic. Third, professional tax differs by state — a Maharashtra employee loses ₹2,400 per year while a Delhi employee loses nothing. Fourth, the split between named allowances (HRA, LTA) and special allowance affects old-regime tax differently depending on each person's rent paid and investment profile. Two payslips can show meaningfully different in-hand figures for the same CTC — all of them arithmetically correct.

Several layers sit between CTC and take-home pay. First, the employer’s 12% PF contribution and the 4.81% gratuity provisioning are inside CTC but never paid to you in cash. Then, from the resulting gross, your own 12% employee PF, professional tax (up to ₹2,500/yr) and income tax are deducted. Together these can reduce a ₹12 lakh CTC to roughly ₹10.25 lakh of annual in-hand — about ₹85,000 a month.

Basic salary is the anchor for PF and gratuity — both are a percentage of basic, not of CTC. A higher basic (say 50% vs 40% of CTC) means larger PF and gratuity, so a smaller gross and lower monthly in-hand — but more money is forced into your retirement savings. A lower basic raises immediate take-home at the cost of slower PF growth. There is no single correct basic percentage; 40–50% is the common range, so we default to 50% and let you change it.

EPFO law makes PF mandatory only on the first ₹15,000 of monthly wages, which caps the contribution at ₹1,800/month (₹21,600/year). Many employers instead deduct 12% of your full basic salary. Both are legitimate — it depends on your employer’s policy. Pick “full basic” if your company contributes on actual basic (most common in consumer calculators), or “₹15,000 ceiling” if it contributes only the statutory minimum. The ceiling leaves more cash in hand but builds a smaller PF corpus.

Gratuity is commonly shown inside CTC as a provisioning of 4.81% of basic salary (derived from the 15/26 formula in the Payment of Gratuity Act, 1972). It is not paid every month and is excluded from your in-hand. Under the Act it becomes payable only after five years of continuous service — so it inflates your CTC figure long before you ever receive it.

By default we apply the new tax regime for FY2025-26: a ₹75,000 standard deduction is subtracted from your gross salary, the remainder is taxed across the slabs (0% up to ₹4L, rising to 30% above ₹24L), and the §87A rebate makes income up to ₹12L taxable income effectively tax-free. Employee PF is not deductible in the new regime. This is a simplified estimate; for HRA, 80C and old-regime planning, use the Old vs New Tax Regime calculator or enter your own tax figure in manual mode.

Under the FY2025-26 new regime, the §87A rebate wipes out tax on taxable income up to ₹12 lakh. On a ₹12 lakh CTC with 50% basic, the gross is about ₹10.99 lakh and taxable income (after the ₹75,000 standard deduction) is about ₹10.24 lakh — comfortably under the ₹12 lakh rebate threshold, so the calculated tax is ₹0. Tax starts to bite as your gross taxable income crosses ₹12 lakh.

Professional tax is a small state-level levy on salaried employment, capped by the Constitution at ₹2,500 per year. States like Maharashtra, Karnataka, West Bengal and Tamil Nadu charge it (commonly ₹200/month = ₹2,400/year), while Delhi, Uttar Pradesh and Haryana do not levy it at all. We default to ₹2,400/year but let you edit it — set it to ₹0 if your state has no professional tax.

The biggest lever is the structure of your CTC. A lower basic percentage reduces both employee and employer PF, raising immediate take-home (at the cost of retirement savings). Choosing the ₹15,000 PF wage-ceiling basis, if your employer allows it, also lifts cash in hand. Moving to a state with no professional tax helps marginally. On tax, keeping taxable income at or under ₹12 lakh keeps you fully within the §87A rebate. Remember that more in-hand often means less forced saving.

It will be close but rarely exact. Real payslips include HRA, special allowances, LTA, employer NPS, insurance premiums, variable pay and food coupons that this simplified model folds into a single gross figure. Your actual basic percentage, your employer’s PF policy, your state’s professional tax and your personal tax exemptions all shift the result. Treat the output as a well-grounded estimate, not a substitute for your official salary structure.

This calculator uses the new regime by default because it needs no exemption inputs and suits most salaried people after the FY2025-26 changes. The old regime can still win if you have large deductions — HRA, ₹1.5 lakh under 80C, home-loan interest, 80D health insurance. To compare the two properly for your numbers, use our dedicated Old vs New Tax Regime calculator, then enter the resulting tax here in manual mode.

No. This calculator models the Indian payroll structure specifically — EPF at 12% of basic, gratuity at 4.81%, professional tax and the FY2025-26 income-tax slabs are all India-specific. That is why it is pinned to the rupee with no currency switch. The CTC concept and these statutory components do not exist in the same form elsewhere, so the figures are meaningful only for an Indian salary.