Salary Calculator: CTC to In-Hand

Understanding CTC vs In-Hand Salary

CTC (Cost to Company) is the total amount a company spends on an employee annually, while in-hand salary is the actual amount you receive in your bank account after all deductions.

Common Salary Components in India

1. Basic Salary

Typically 40-50% of CTC. Forms the base for calculating other components like PF and gratuity.

2. House Rent Allowance (HRA)

Usually 40-50% of basic salary. Partially or fully tax-exempt if you live in rented accommodation.

3. Provident Fund (PF)

12% of basic salary contributed by both employee and employer. Employee contribution is deducted from salary.

4. Professional Tax

State-specific tax ranging from ₹200-₹2,500 per month depending on your salary and state.

5. Income Tax (TDS)

Deducted based on your tax slab under the old or new tax regime.

Salary Breakdown Example

For a CTC of ₹6,00,000 per annum:

• Basic Salary: ₹2,40,000 (40%)
• HRA: ₹1,20,000 (20%)
• Special Allowance: ₹1,80,000
• Employer PF: ₹28,800
• Gratuity: ₹11,200
• Other Benefits: ₹20,000

Deductions:

• Employee PF: ₹28,800
• Professional Tax: ₹2,400
• Income Tax: ₹12,500 (approx)

In-Hand Salary: ₹45,858 per month (approx)

Tax Saving Tips for Higher Take-Home

• Invest in ELSS, PPF, or NPS under Section 80C (up to ₹1.5 lakh)
• Claim HRA exemption if living in rented accommodation
• Opt for NPS for additional ₹50,000 deduction under Section 80CCD(1B)
• Claim medical insurance premium under Section 80D
• Choose between old and new tax regime based on your investments

Frequently Asked Questions

What is the difference between gross salary and CTC?

Gross salary is the amount before deductions (like PF and tax), while CTC includes employer contributions like PF, gratuity, and other benefits.

How much tax do I pay on ₹10 lakh CTC?

Under the new tax regime (2024-25), you'll pay approximately ₹75,000 in income tax annually on ₹10 lakh CTC, depending on your deductions.

Is PF deducted from in-hand salary?

Yes, employee PF contribution (12% of basic) is deducted from your gross salary before calculating in-hand salary.