From CTC to in-hand salary
Your CTC (cost to company) is everything your employer spends on you in a year. Several parts of it never reach your bank account:
- Employer PF — 12% of basic pay goes to your EPF account. It is part of CTC but not of your gross salary.
- Employee PF — another 12% of basic is deducted from your gross salary.
- Professional tax — up to ₹2,500 a year in states that levy it.
- Income tax (TDS) — deducted every month based on your expected income for the year.
- Bonus and variable pay — part of CTC but paid once or twice a year, so it does not appear in the monthly figure.
In-hand salary = Gross salary − Employee PF − Professional tax − Income tax
Income tax slabs for FY 2026-27 (new regime)
Budget 2026 kept the new-regime slabs unchanged. The new regime is the default unless you opt for the old one.
| Taxable income | Tax rate |
|---|---|
| Up to ₹4 lakh | Nil |
| ₹4–8 lakh | 5% |
| ₹8–12 lakh | 10% |
| ₹12–16 lakh | 15% |
| ₹16–20 lakh | 20% |
| ₹20–24 lakh | 25% |
| Above ₹24 lakh | 30% |
- Standard deduction: ₹75,000 for salaried employees.
- Section 87A rebate: no tax if taxable income is up to ₹12 lakh. With the standard deduction, a salary of up to ₹12.75 lakh pays no income tax.
- Marginal relief: just above ₹12 lakh, your tax cannot exceed the income above ₹12 lakh.
- Cess: 4% health and education cess on the tax; surcharge applies above ₹50 lakh.
Old regime: when can it be better?
The old regime has higher rates (5% from ₹2.5 lakh, 20% from ₹5 lakh, 30% above ₹10 lakh) and a ₹50,000 standard deduction, but allows deductions like 80C (up to ₹1.5 lakh, including your PF), 80D health insurance, HRA exemption and home-loan interest (up to ₹2 lakh). It can win if your total deductions are large — typically ₹4–5 lakh or more. The calculator shows both so you can compare.
In-hand salary examples
| Annual CTC | Monthly in-hand | Income tax for the year |
|---|---|---|
| ₹6 lakh | ₹46,200 | Nil |
| ₹10 lakh | ₹79,533 | Nil |
| ₹12 lakh | ₹96,200 | Nil |
| ₹15 lakh | ₹1,13,356 | ₹94,130 |
| ₹20 lakh | ₹1,47,208 | ₹1,87,907 |
| ₹30 lakh | ₹2,07,112 | ₹4,69,061 |
Worked example (₹15 lakh CTC): employer PF ₹21,600 → gross salary ₹14,78,400. Taxable income after the ₹75,000 standard deduction is ₹14,03,400; slab tax ₹90,510 + 4% cess = ₹94,130. In-hand for the year: ₹14,78,400 − ₹21,600 PF − ₹2,400 professional tax − ₹94,130 tax = ₹13,60,270, or about ₹1,13,356 a month.
How to use this salary calculator
- Enter your annual CTC from your offer letter.
- Set basic pay as a share of CTC (check your salary structure; 40–50% is common).
- Add any bonus or variable pay included in the CTC.
- Choose whether PF is deducted and whether it is capped at ₹15,000 basic.
- Enter your state's professional tax.
- Pick the tax regime; for the old regime, add your 80C investments and other deductions.
Frequently asked questions
How is in-hand salary calculated from CTC?
Take out the employer's PF (12% of basic) to get gross salary, then deduct the employee's PF, professional tax and income tax. Divide the rest (minus any annual bonus) by 12 for the monthly in-hand.
What is the in-hand salary for ₹12 lakh CTC?
About ₹96,200 a month under the new regime for FY 2026-27 (basic 50%, PF capped, ₹2,400 professional tax). There is no income tax at this level.
Is salary up to ₹12.75 lakh tax-free?
Under the new regime, yes: the ₹75,000 standard deduction brings taxable income to ₹12 lakh, and the Section 87A rebate cancels the tax on it.
Which tax regime is better for me?
The new regime suits most people with few deductions. The old regime can save tax if your deductions (80C, 80D, HRA, home-loan interest) add up to roughly ₹4–5 lakh or more. Enter your numbers to compare.
Why is my in-hand salary lower than CTC ÷ 12?
CTC includes the employer's PF, gratuity and bonus, and your salary has PF, professional tax and TDS deducted before it is paid.