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Salary & Tax

CTC to Take-Home Salary Calculator

Enter your annual CTC to get a complete salary breakdown — Basic, HRA, PF, Gratuity, TDS, and your actual monthly in-hand salary. Supports Old and New tax regime (FY 2024-25).

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+ Old Regime Deductions (80C, 80D, NPS)
💼 Enter your Annual CTC to see breakdown

Understanding Your Indian Salary — CTC vs In-Hand

Most Indians are confused about why their in-hand salary is much less than their CTC. Here's a clear explanation of every component:

What is CTC?

CTC (Cost to Company) is the total amount your employer spends on you annually. It includes your salary plus employer's share of PF, gratuity, and any other benefits. It is NOT what you take home.

What is Gross Salary?

Gross Salary is your CTC minus employer PF and gratuity. This is the amount that appears in your salary slip before deductions. It includes Basic, HRA, LTA, and Special Allowance.

What is Net / In-Hand Salary?

Net salary is what gets credited to your bank account — after deducting Employee PF (12% of Basic), Professional Tax, and TDS (income tax). This is usually 15–30% less than CTC depending on your tax bracket.

Old Regime vs New Regime — Which is Better?

Old Regime allows deductions like HRA exemption, 80C (₹1.5L), 80D, NPS 80CCD(1B), and standard deduction of ₹50,000. New Regime has lower tax rates but very few deductions — only ₹75,000 standard deduction. MoneyTechTools automatically calculates both and tells you which saves more tax for your specific salary and investments.

Frequently Asked Questions

Why is my in-hand salary so much less than my CTC?
CTC includes employer PF contribution (12% of Basic), gratuity (4.81% of Basic), and sometimes other benefits that you don't receive monthly. Additionally, your gross salary is reduced by employee PF (12% of Basic), Professional Tax (₹200–2,500/month by state), and TDS (income tax deducted at source). All these deductions together can reduce take-home by 15–35% of CTC.
What is Basic Salary and how much should it be?
Basic salary is the fixed core component of your salary. It's typically 40–50% of CTC. Higher basic means higher HRA (good for exemption), higher PF contributions (good for retirement savings), higher gratuity, and higher leave encashment — but also higher TDS. Low basic with high special allowance is a common structuring technique to reduce PF and gratuity obligations.
Is PF deduction mandatory?
If your basic salary is ₹15,000 or less per month, EPF is mandatory. If basic is above ₹15,000, you can technically opt out. However, many employers require PF contributions regardless. PF is beneficial — it's a forced savings scheme giving ~8.25% p.a. interest (tax-free up to ₹2.5L/year contribution) with employer matching your contribution.
How is Professional Tax calculated?
Professional Tax is levied by state governments, not the central government. It varies by state: Maharashtra: ₹200/month (for salary above ₹10,000), Karnataka: ₹200/month, Andhra Pradesh: ₹150–200/month, Tamil Nadu: ₹135–200/month. Some states like Delhi have no Professional Tax. Maximum PT is ₹2,500/year.
What is Gratuity and when do I get it?
Gratuity is a retirement benefit paid by your employer when you leave after completing 5 years of continuous service. The formula is: (Basic + DA) × 15/26 × Number of years of service. The employer sets aside 4.81% of Basic monthly for this. You receive the accumulated amount when you leave, retire, or in case of death/disability (5-year condition waived).

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⚠️ Disclaimer: Calculations are based on Finance Act 2024 (FY 2024-25, AY 2025-26). Actual deductions may vary based on your employer's policies, state of employment, and investment declarations. TDS calculation assumes standard income tax slabs and does not account for all possible deductions or special circumstances. Consult a Chartered Accountant for personalised tax advice.
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