How CTC to In-Hand Salary is Calculated
Your CTC (Cost to Company) is broken down into several components. The main components are:
- Basic Salary: Typically 40-50% of CTC
- HRA (House Rent Allowance): 50% of basic for metro, 40% for non-metro
- Special Allowance: Remaining amount after basic, HRA, and employer PF
- PF (Provident Fund): 12% of basic (capped at ₹15,000 basic), contributed by both employee and employer
From your gross salary (Basic + HRA + Special Allowance), the following deductions are made:
Formula
In-Hand Salary = Gross Salary - Deductions
Deductions:
- PF (Employee): 12% of Basic (capped)
- Professional Tax: ₹2,400-2,500/year (varies by state)
- Income Tax: Based on tax slabs
- Health & Education Cess: 4% of income taxExample Calculation
Let's calculate the in-hand salary for a CTC of ₹10,00,000 (new regime, metro):
Salary Components:
- • Basic Salary (40%): ₹4,00,000
- • HRA (50% of basic): ₹2,00,000
- • PF Employer (12% of basic): ₹48,000
- • Special Allowance: ₹3,52,000
- • Gross Salary: ₹9,52,000
Deductions:
- • Taxable Income: ₹9,52,000 - ₹75,000 (std deduction) = ₹8,77,000
- • Income Tax: ₹33,850
- • Cess (4%): ₹1,354
- • PF Employee: ₹48,000
- • Professional Tax: ₹2,500
- • Total Deductions: ₹85,704
Result:
Monthly In-Hand: ₹72,191
Annual In-Hand: ₹8,66,296
India-Specific Assumptions
- PF Rate: 12% of basic salary (employee and employer), capped at ₹15,000 basic per month
- Professional Tax: ₹2,400-2,500 per year (varies by state; some states have no PT)
- Standard Deduction: ₹75,000 per year (FY 2025-26)
- Tax Regime: New regime is default with lower rates but fewer deductions
- HRA: 50% of basic for metro cities (Mumbai, Delhi, Kolkata, Chennai, Bangalore, Hyderabad), 40% for non-metro
- Rebate u/s 87A: No tax if taxable income ≤ ₹12,00,000 (new regime) or ≤ ₹5,00,000 (old regime)
Frequently Asked Questions
No. CTC (Cost to Company) is the total amount your employer spends on you annually, including your salary, benefits, PF contributions, and other perks. In-hand salary is what you actually receive in your bank account after all deductions like PF, professional tax, and income tax.
Typically, your take-home salary is 70-80% of your CTC, depending on your tax slab, PF contributions, and other deductions. For example, if your CTC is ₹10 lakh, your monthly in-hand might be around ₹58,000-65,000.
Yes, CTC includes the employer's PF contribution (typically 12% of basic salary). This amount is not part of your in-hand salary but goes into your PF account, which you can withdraw when you leave the company or retire.
HRA (House Rent Allowance) is part of your CTC and is included in your gross salary. In the old tax regime, if you pay rent, you can claim HRA exemption which reduces your taxable income. In the new regime, HRA is fully taxable. Metro cities get 50% of basic as HRA, while non-metro cities get 40%.
It depends on your deductions. The new regime has lower tax rates but doesn't allow most deductions (except standard deduction). The old regime has higher rates but allows deductions like 80C, HRA, home loan interest, etc. Use our Old vs New Regime Calculator to compare both options for your specific case.
This calculator provides an estimate based on standard assumptions. Your actual in-hand may differ due to: variable pay/bonuses, company-specific benefits, additional deductions (like loans or insurance), different PF contribution rates, or state-specific professional tax variations. Always verify with your employer's HR department.
You might also need
Disclaimer: This is an estimate based on FY 2025-26 tax rules and standard salary structures. Actual in-hand salary may vary based on your employer's policies, additional benefits, variable pay, and other factors. This is not financial advice. Always verify with your employer's HR department.
Last updated: April 2026