What is the difference between CTC and in-hand salary?

CTC (Cost to Company) is the total amount your employer spends on you, including basic salary, HRA, allowances, employer EPF, gratuity provision, and bonuses. In-hand salary is what you actually receive in your bank account each month after deducting employee EPF, professional tax, ESI (if applicable) and income tax (TDS). The share you take home depends on your salary structure, PF basis and tax regime; the calculator shows your exact figure.

How is in-hand salary calculated from CTC?

Gross salary = CTC − employer EPF − gratuity provision (about 4.81% of basic) − employer ESI (if applicable). Monthly in-hand = (gross salary − annual bonus − employee EPF − employee ESI − professional tax − income tax on the fixed pay) ÷ 12. The bonus is paid separately after its own tax. The exact amount depends on your basic salary percentage, PF basis, tax regime and HRA exemption.

What percentage of CTC is basic salary?

Basic salary is typically 40-50% of CTC in most Indian companies. Under the Labour Codes (in force from 21 November 2025), wages for PF and gratuity must be at least 50% of total remuneration: excluded allowances above 50% are added back. Check your offer letter for the exact split.

Which tax regime should I choose, old or new?

For Tax Year 2026-27, the new regime is always cheaper for salaries up to ₹12.75 lakh, because of the ₹75,000 standard deduction and the section 156 rebate up to ₹12 lakh of taxable income. Above that, the old regime usually needs roughly ₹6–8.5 lakh of total deductions (including the ₹50,000 standard deduction and HRA) to win. Use our Tax Savings Optimizer for a detailed comparison.

CTC to In-Hand Salary Calculator

Convert your annual CTC to monthly in-hand salary. See the full breakdown of Basic, HRA, EPF, Professional Tax and income tax deductions for Tax Year 2026-27.

Salary Structure

Annual CTC (₹)

Basic Salary (% of CTC)

Typically 40-50% of CTC. Under the Labour Codes, PF and gratuity wages are at least 50% of pay (excluded allowances above 50% are added back), so a low basic may understate them.

City Type

50% cities: Delhi, Mumbai, Kolkata, Chennai, Bengaluru, Hyderabad, Pune, Ahmedabad

Additional Details

Monthly Rent Paid (₹)

For HRA exemption (old regime)

Tax Regime

Annual Bonus / Variable (₹)

Included in CTC but paid separately, so it is excluded from monthly pay

PF Calculated On

EPF wage ceiling is ₹25,000/mo from 17 Sep 2026 (was ₹15,000). Check your payslip.

Monthly In-Hand Salary

Salary Breakdown (Monthly)

Basic Salary

HRA

Special Allowance

Gross Salary (excl. bonus)

Deductions

EPF (Employee)

ESI (Employee, 0.75%)

Professional Tax

Income Tax (TDS)

Total Deductions

What reaches your bank

of your CTC is paid in hand

In hand Provident fund Gratuity Income tax Prof. tax & ESI

Held back for later (PF + gratuity)

Annual Summary

Component	Monthly	Annual

Employer Contributions Included in Your CTC

Employer EPF

Employer ESI (if applicable)

Gratuity Provision

Gratuity provision is 15/26 of one month's basic per year (about 4.81% of annual basic). Tax includes 4% cess and surcharge with marginal relief; the old regime deducts HRA, ₹50,000 standard deduction, your EPF under section 123 (old 80C) and professional tax. Professional tax is assumed at ₹2,400/yr and varies by state. Calculations are approximate and based on standard salary structures. Actual in-hand salary may vary based on company policies, variable pay timing, and specific benefits.

What is a CTC to In-Hand Salary Calculator?

A CTC to In-Hand Salary Calculator converts your annual Cost to Company (CTC) into the actual monthly amount you receive in your bank account: your take-home pay or net salary. CTC includes your basic salary, allowances (HRA, special allowance), employer contributions (EPF, gratuity), and variable pay (bonuses). But not all of this reaches you every month.

Your employer deducts Employee Provident Fund (EPF), professional tax, and income tax (TDS) before crediting your salary. This calculator breaks down every component so you can see exactly where your CTC goes: how much is your gross salary, how much is deducted, and what remains as your monthly in-hand pay.

Use it to compare job offers or to check the numbers on your payslip.

Worked example: in-hand pay on a ₹12 lakh CTC

Illustrative, using the defaults: ₹12 lakh CTC, basic at 40%, a 50% HRA city, ₹15,000 monthly rent, no bonus and EPF on the ₹25,000 wage ceiling, for tax year 2026-27. The employer's EPF (₹36,000) and gratuity provision (₹23,077) come out of CTC first, which leaves a fixed gross of ₹95,077 a month.

Regime	Monthly TDS	Monthly in-hand
New regime	₹0	₹91,877
Old regime	₹8,372	₹83,505

In the new regime, taxable income after the ₹75,000 standard deduction is about ₹10.66 lakh. That is under the ₹12 lakh rebate limit, so no tax is due. The old regime still leaves about ₹1 lakh of tax a year after HRA exemption, standard deduction and EPF under section 123 (old 80C), so you take home about ₹8,400 a month less. Even filling the rest of the section 123 limit would not close that gap here.

How to Use This CTC to In-Hand Calculator

1
Enter your annual CTC
This is the total cost your employer mentions in the offer letter. It includes everything: basic, HRA, EPF, gratuity, bonuses and all allowances.
2
Set your basic salary percentage
Most companies set basic at 40-50% of CTC. A higher basic means higher EPF and gratuity but also higher tax-free HRA. Check your offer letter for the exact split.
3
Select city and tax regime
Metro vs non-metro affects your HRA exemption. Choose your tax regime (the new regime under section 202 is the default for Tax Year 2026-27) to calculate the TDS deduction.
4
View your complete salary breakdown
See the monthly and annual split of every component: basic, HRA, special allowance, EPF, professional tax, income tax, and your final in-hand salary.

What's the Difference Between CTC and In-Hand Salary?

CTC (Cost to Company)

The total amount your employer spends on you annually. Includes basic salary, HRA, allowances, employer EPF/ESI contributions, gratuity provision, bonuses, and benefits like insurance. This is the number in your offer letter.

In-Hand Salary (Take-Home)

The actual amount credited to your bank account each month after all deductions: EPF (employee share), professional tax and income tax (TDS). The share of CTC you take home depends on your salary structure, PF basis and tax regime; the calculator above shows your exact figure.

Gross Salary vs Net Salary

Gross salary = CTC minus employer contributions (employer EPF, gratuity). Net salary = Gross salary minus employee deductions (employee EPF, professional tax, TDS). Net salary is your in-hand pay.

Why CTC Does Not Equal In-Hand

For a ₹12 LPA CTC (40% basic, new regime), your in-hand is about ₹92,000/month, not ₹1,00,000. The gap is employer EPF and employee EPF (up to ₹3,000/mo each on the ₹25,000 wage ceiling), a gratuity provision (about ₹1,900/mo) and professional tax (₹200/mo). Income tax is nil at this level because of the section 156 rebate.

Salary Components Explained

Basic Salary: The fixed core component, typically 40-50% of CTC. It determines HRA, EPF, and gratuity amounts. A higher basic means more tax-saving via HRA but also higher EPF deduction.
HRA (House Rent Allowance): The amount is set by your employer. If you pay rent, part of it can be exempt under the old tax regime; the exemption limit is 50% or 40% of basic depending on the city you live in.
Special Allowance: The balancing component that makes up the difference between gross salary and (basic + HRA). Fully taxable with no special exemptions.
EPF (Employee Provident Fund): 12% of basic (or of the ₹25,000/mo wage ceiling, if your employer caps it) is deducted from your salary, and your employer contributes another 12% (part of it goes to the pension scheme, EPS) under the Code on Social Security, 2020 and the EPF Scheme. Your share qualifies under section 123 (old 80C, old regime only) and earns 8.25% interest for FY 2025-26.
Professional Tax: State-level tax on salaried individuals, typically ₹200/month (max ₹2,500/year). It varies by state: Karnataka, Maharashtra, West Bengal charge it; some states don't.
TDS (Tax Deducted at Source): Your employer deducts estimated income tax monthly based on your declared investments and chosen Income Tax Act regime. This is adjusted during ITR filing.

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