CTC to In-Hand Salary Calculator

What Is CTC and How Is In-Hand Salary Different?

CTC (Cost to Company) is the total annual expense your employer incurs to employ you. It includes your gross salary plus employer-side costs like the employer's EPF contribution (12% of basic salary) and a gratuity provision (4.81% of basic) that gets paid only after 5 years of service. These costs are real money the company spends but you never see them credited to your account monthly.

In-hand salary — also called take-home or net salary — is what actually gets credited to your bank account after three deductions: employee EPF (12% of basic), professional tax (up to Rs 200/month depending on your state), and income tax (based on your chosen regime).

For a Rs 10 lakh CTC, the gross salary is approximately Rs 9.33 lakh after removing employer EPF and gratuity. Your monthly in-hand under the new regime is approximately Rs 73,531 — that's 88% of CTC because income tax is zero at this level under the new regime's Section 87A rebate.

How CTC Breaks Down Into Salary Components

A typical CTC breaks down into these components:

• Basic Salary — 40-50% of CTC. Base for EPF, HRA, and gratuity calculations. Higher basic means more EPF and better HRA exemption in the old regime.
• HRA (House Rent Allowance) — 40-50% of basic (50% for metro cities, 40% for non-metro). Tax-free if you pay rent and claim exemption under old regime.
• Special Allowance — The remainder after basic, HRA, EPF, and gratuity. Fully taxable. Most modern salary structures shift more to special allowance to reduce EPF contributions.
• Employer EPF — 12% of basic, paid by employer to your EPF account. Part of CTC but not your gross salary. Builds retirement corpus.
• Gratuity Provision — 4.81% of basic (= 15 days salary per year). Included in CTC by most companies. Paid as a lump sum after 5 years of service under the Payment of Gratuity Act, 1972.

Deductions That Reduce Your Take-Home

Three deductions reduce your gross salary to in-hand salary every month:

• Employee EPF — 12% of basic salary (same amount as employer's contribution). Goes to your EPF account. Qualifies for 80C deduction under old regime.
• Professional Tax — Levied by state governments, capped at Rs 2,500/year by Article 276 of the Constitution. Rs 200/month is the typical amount in Karnataka, Maharashtra (above Rs 25,000 gross), Andhra Pradesh. Zero in Delhi, UP, Rajasthan, Haryana, Punjab.
• Income Tax — The largest variable deduction. Under the new tax regime for FY 2025-26, income up to Rs 12 lakh is effectively zero-tax due to the Section 87A rebate of Rs 60,000. For higher incomes, new regime slabs are: 4-8L at 5%, 8-12L at 10%, 12-16L at 15%, 16-20L at 20%, 20-24L at 25%, 24L+ at 30%.

New Regime vs Old Regime: Which Gives More Take-Home?

For most salaried employees in FY 2025-26, the new tax regime gives significantly higher in-hand salary. Here's why:

The old regime wins only in rare cases where your total deductions are very high — typically you need 80C at Rs 1.5 lakh + 80D at Rs 50,000 + home loan interest of Rs 2 lakh or more. With standard 80C and HRA only, the new regime is better at almost all income levels from FY 2025-26 onwards.

Example: Rs 10 Lakh CTC to In-Hand (FY 2025-26)

Why zero income tax? Gross salary Rs 9,32,769 minus standard deduction Rs 75,000 = taxable income Rs 8,57,769. Tax on this = Rs 25,777. Since taxable income is below Rs 12 lakh, Section 87A rebate covers the entire tax. Net income tax = Rs 0.