Updated June 2026

Salary Calculator

Your CTC is ₹12 lakh but only ₹72,000 hits your bank? See the exact deduction trail — EPF, professional tax, income tax — and how much you actually take home each month.

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City Type
Tax Regime
In-Hand
EPF
Income Tax
Professional Tax
Monthly In-Hand Salary

₹96,200

Annual Take-Home

₹11.54 L

Monthly CTC

₹1.00 L

Monthly Breakdown

Basic Salary₹40,000
HRA₹20,000
Special Allowance₹38,200
Gross Salary₹98,200

Monthly Deductions

Employee EPF−₹1,800
Professional Tax−₹200
Income Tax (New Regime)−₹0
Total Deductions−₹2,000

Employer EPF: ₹1,800/month is part of your CTC but doesn't appear in your payslip as take-home. It goes directly to your PF account.

How CTC to In-Hand Salary Works in India

Every Indian fresher's first shock: the offer letter says ₹10 lakh CTC, but the first salary credit is ₹58,000 — not ₹83,333. The gap isn't a scam; it's the structure of Indian compensation. CTC (Cost to Company) includes everything your employer spends — your take-home, your PF savings, insurance, and even gratuity provisions you'll never see until you leave.

Here's the typical flow: CTC → Gross Salary → Net Salary (In-Hand). Your gross is CTC minus employer-side costs (employer EPF, insurance, gratuity). Your net is gross minus employee deductions (your EPF share, professional tax, TDS for income tax).

The Salary Structure Breakdown

A standard Indian salary slip has these components:

  • Basic Salary (40-50% of CTC) — The foundation. EPF, HRA, and gratuity are all calculated on this. Companies that keep it low reduce their EPF liability — but also reduce your retirement savings.
  • HRA (40-50% of Basic) — House Rent Allowance. Partially or fully tax-exempt if you pay rent. Metro employees get 50% of basic as HRA; non-metro get 40%.
  • Special Allowance — The balancing component. Whatever's left after Basic + HRA + employer EPF is dumped here. Fully taxable, no exemption.
  • Employer EPF (12% of Basic) — Goes to your PF account. Part of CTC but never in your bank account. Capped at ₹1,800/month if company follows the ₹15,000 wage ceiling.

Why Your In-Hand Is 60-75% of CTC

Let's trace a ₹12,00,000 CTC through the deduction pipeline:

  • Basic (40%): ₹4,80,000 → ₹40,000/month
  • HRA (50% of Basic): ₹2,40,000 → ₹20,000/month
  • Employer EPF (12% of Basic, capped): ₹21,600 → ₹1,800/month
  • Special Allowance (balance): ₹4,58,400 → ₹38,200/month
  • Gross salary: ₹98,200/month (CTC minus employer EPF)

Now subtract employee deductions:

  • Employee EPF: −₹1,800/month
  • Professional Tax: −₹200/month
  • Income Tax (New Regime): −₹7,500/month (approx at ₹12L)
  • In-hand: ~₹88,700/month

Metro vs Non-Metro: Impact on HRA and Tax

If you live in Delhi, Mumbai, Kolkata, or Chennai (metro cities), your HRA exemption is calculated as 50% of basic salary. For all other cities, it's 40%. This single difference can mean ₹20,000-50,000 more in annual tax savings for metro employees paying high rent under the old regime.

How to Maximize Your In-Hand Salary

  1. Choose the right tax regime — Run both scenarios in this calculator. If your deductions are below ₹3.75L (at ₹12L income), new regime wins.
  2. Restructure your salary — Ask HR to increase HRA or add food coupons/LTA. These are partially tax-exempt.
  3. Claim all eligible deductions — Under old regime: 80C (₹1.5L), 80D (₹25K-50K), home loan interest (₹2L), and NPS (₹50K extra). Many employees miss the NPS deduction alone.
  4. Rent receipts matter — Even if paying rent to parents, you can claim HRA exemption (they declare it as rental income). This alone saves ₹30,000-80,000 in tax.

EPF Wage Ceiling: ₹15,000 Rule

The statutory EPF wage ceiling is ₹15,000/month. If your basic exceeds this, the mandatory EPF contribution is capped at 12% of ₹15,000 = ₹1,800/month. Many companies follow this to reduce costs. Some allow you to contribute on full basic (called "PF on actual") — better for retirement but reduces in-hand by thousands.

Frequently Asked Questions

What is the difference between CTC and in-hand salary?
CTC (Cost to Company) is the total amount your employer spends on you annually — including your basic pay, allowances, employer EPF contribution, insurance, and other benefits. In-hand salary is what actually hits your bank account after subtracting employee EPF, professional tax, and income tax. For most salaried Indians, in-hand salary is 60-75% of CTC.
How is basic salary calculated from CTC?
Basic salary is typically 40-50% of CTC in most Indian companies. It's the fixed component that determines your HRA, EPF, and gratuity. A higher basic means more EPF contribution (better for retirement) but higher taxable income. Some companies keep it low (30-35%) to reduce EPF liability and give more as tax-free allowances.
Why is my in-hand salary much less than my CTC?
The gap between CTC and in-hand comes from: (1) Employer EPF — 12% of basic goes to your PF account, not your bank. (2) Income tax — TDS deducted monthly. (3) Professional tax — ₹200/month in most states. (4) Insurance premiums, gratuity provisions, and other employer-side costs included in CTC. A ₹12L CTC typically results in ₹75,000-85,000 monthly in-hand depending on tax regime and deductions.
What is professional tax and who pays it?
Professional tax is a state-level tax on salaried individuals and professionals. It's capped at ₹2,500/year (typically ₹200/month). Not all states levy it — Karnataka, Maharashtra, West Bengal, Andhra Pradesh, and Tamil Nadu do. Your employer deducts it from salary and deposits it with the state government. It's deductible from taxable income under both old and new regimes.
Should I choose old or new tax regime for better in-hand salary?
New regime gives better in-hand if your deductions under old regime are less than ₹3.75L (at ₹12L CTC). If you have significant deductions — 80C (₹1.5L), 80D (₹25K-50K), HRA exemption (₹2-4L), and home loan interest (₹2L) — old regime may save more. Use the tax regime toggle in this calculator to instantly compare both scenarios.
How does EPF affect my in-hand salary?
EPF reduces your monthly in-hand by 12% of basic salary (capped at ₹1,800/month if basic exceeds ₹15,000 — the statutory wage ceiling). However, employer also contributes 12% to your PF. So you're effectively getting 24% of basic as forced savings with 8.25% tax-free returns. Many high-salary employees opt for VPF (Voluntary PF) for additional tax-free investing.
Is HRA taxable if I don't pay rent?
Yes. HRA is fully taxable if you don't pay rent. If you do pay rent, the HRA exemption is the minimum of: (1) Actual HRA received, (2) Rent paid minus 10% of basic salary, (3) 50% of basic (metro) or 40% (non-metro). This is why our calculator asks for monthly rent — it significantly impacts your tax under the old regime.
What components are included in CTC but not in take-home?
Common CTC components that don't appear in take-home: employer EPF (12% of basic), employer ESI (if applicable), gratuity provision (4.81% of basic), group health insurance, meal coupons/food cards, NPS employer contribution, telephone/car lease benefits, and performance bonuses (paid separately). Only fixed monthly components form your regular in-hand salary.

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