Calculate Your Take-Home Salary
Enter your CTC or gross salary to get your exact monthly in-hand pay with all deductions
Salary Summary
New vs Old Regime Tax Comparison
Salary Component Breakdown
Complete Salary Details
What Is CTC and How Does It Differ from Take-Home?
Understanding the gap between what your employer pays and what reaches your bank account
CTC (Cost to Company) is the total annual expense an employer incurs for an employee — it includes your salary, employer's PF contribution, gratuity, insurance, and any other benefits. It is the number quoted in offer letters. It is not what you receive.
Your Gross Salary is CTC minus employer-side contributions (Employer PF, Gratuity, etc.) — the sum of all components that appear on your payslip before any deductions. Your Net or In-Hand Salary is Gross minus all deductions: Employee PF, Professional Tax, Income Tax (TDS) and any other statutory deductions.
The standard CTC structure in Indian private sector companies allocates roughly 40–50% as Basic Pay, 40–50% of Basic as HRA (50% for metros, 40% for non-metros), and distributes the remainder across Special Allowance, LTA, Medical Allowance, Bonus and benefits. The exact split significantly impacts tax liability — higher Basic means higher PF contributions (both sides) and potentially higher HRA exemption if you pay rent.
Salary Components Explained
Every element of a typical Indian payslip — earnings, allowances and deductions
| Component | Typical %/Amount | Taxable? | Notes |
|---|---|---|---|
| Basic Pay | 40–50% of CTC | Fully taxable | Base for PF, Gratuity, HRA computation |
| HRA (House Rent Allowance) | 40–50% of Basic | Partially exempt | Exempt amount: min of (HRA received, 50%/40% of Basic, Actual Rent − 10% Basic) |
| Special Allowance | Balance of CTC | Fully taxable | Flexible component — no exemption in either regime |
| LTA (Leave Travel Allowance) | ₹10,000–₹30,000/yr | Exempt (Old Regime) | Exempt for actual travel cost; 2 journeys in a 4-year block |
| Employer PF (EPF) | 12% of Basic (max ₹1,800/mo) | Not in CTC to employee | Employer contribution; not part of gross salary but part of CTC |
| Employee PF (EPF) | 12% of Basic (max ₹1,800/mo) | Deductible under 80C | Deducted from gross; qualifies as 80C investment in Old Regime |
| Gratuity | 4.81% of Basic | Exempt up to ₹20L | Employer side; payable after 5 years of service |
| Professional Tax | ₹200/mo (max ₹2,400/yr) | Deductible | State-specific; not applicable in all states |
| Standard Deduction New FY24-25 | ₹75,000 (New) / ₹50,000 (Old) | Reduces taxable salary | Flat deduction for all salaried employees; no proof required |
HRA Exemption
Only relevant if you actually pay rent. Submit rent receipts to HR. Landlord PAN required if annual rent exceeds ₹1 lakh.
Old Regime OnlyProvident Fund (EPF)
12% of Basic (capped at ₹1,800/mo) deducted from salary. Employer contributes an equal amount. Withdrawal tax-free after 5 years.
Mandatory (Private)LTA Exemption
Leave Travel Allowance is exempt for actual travel cost within India — for 2 journeys in a 4-year block. Only rail/air/bus fare counts, not hotel or food.
Old Regime OnlyProfessional Tax
Levied by state governments — up to ₹2,500/year. Applicable in Maharashtra, Karnataka, West Bengal etc. Not charged in Delhi, UP, Rajasthan.
State-specificGratuity
Employer-funded retirement benefit — 4.81% of Basic. Part of CTC but paid as lump sum on leaving after 5+ years. Exempt up to ₹20 lakh.
Part of CTCRestructure for Tax Savings
Ask HR to restructure your salary — increase NPS contribution, add LTA/medical components, or increase PF — to reduce taxable income under the Old Regime.
Plan EarlyHow Take-Home Salary Is Calculated
Step-by-step from CTC to net monthly salary — with every deduction explained
- 1
Start with Annual CTC
CTC = Basic + HRA + Special Allowance + LTA + Employer PF + Gratuity + any other benefits. The full cost your company incurs for you annually.
- 2
Subtract Employer-Side Costs → Gross Salary
Remove Employer PF (12% of Basic, max ₹21,600/yr) and Gratuity (4.81% of Basic) from CTC. What remains is your Gross Annual Salary — the sum of all components in your payslip before deductions.
- 3
Compute Taxable Income
Gross Salary minus Standard Deduction (₹75K new / ₹50K old) and any applicable exemptions (HRA, LTA under Old Regime) and Chapter VI-A deductions (80C, 80D etc. in Old Regime). This is the income on which income tax slabs are applied.
- 4
Calculate Income Tax (TDS)
Apply progressive tax slab rates to taxable income under the chosen regime. Subtract 87A rebate if applicable. Add 4% Health & Education Cess. This annual tax is divided by 12 and deducted monthly as TDS (Tax Deducted at Source) from your gross salary.
- 5
Subtract Statutory Deductions
Employee PF: 12% of Basic (max ₹1,800/month). Professional Tax: up to ₹200/month (state-dependent). These are deducted from gross monthly salary every month without exception.
- 6
Net Monthly In-Hand = Gross Monthly − All Monthly Deductions
Final take-home = Gross Monthly Salary − Monthly TDS − Monthly Employee PF − Monthly Professional Tax. This is the amount credited to your bank account on salary day.
Gross Monthly = (CTC − Employer PF − Gratuity) ÷ 12
Monthly TDS = Annual Income Tax ÷ 12
Monthly PF = 12% × Basic Monthly (max ₹1,800)
Monthly PT = ₹200 (approx, state-specific)
Take-Home = Gross Monthly − TDS − PF − PTSmart Salary Negotiation & Structuring Tips
Maximise your take-home salary through smart negotiation and legal salary restructuring
Negotiate a Flexible Benefits Plan
Many companies offer a Flexible Benefits Plan (FBP) where you can choose how your salary is structured — opting for more non-taxable or tax-exempt allowances like LTA, fuel, telephone, and meal vouchers over taxable Special Allowance.
Compare Net, Not CTC
When evaluating job offers, always compare net take-home salaries — not CTC. A ₹15 LPA offer with good HRA structure and low variable component can give more in-hand than ₹18 LPA with high variable and poor structure.
Voluntary PF — More or Less?
Contributing more to Voluntary PF (VPF) reduces take-home but saves income tax under 80C (Old Regime only). Under the New Regime, there's no tax benefit — extra VPF only locks up money. Choose based on your regime and savings goal.
Optimise HRA — Pay Real Rent
If you live in a rented house, HRA exemption is powerful — up to 50% of Basic is tax-free if you pay rent in a metro. Even paying rent to family (with proper documentation) can unlock the exemption in the Old Regime.
Choose Regime at Start of Year
Declare your preferred tax regime to your HR/payroll team in April. They will compute TDS accordingly. If you don't declare, the employer defaults to the New Regime. You can still change when filing your ITR.
Understand Your Increment Correctly
A 20% hike on CTC does not mean a 20% increase in take-home. Higher income pushes you into higher tax slabs. Use this calculator to see the exact net increase after a raise — it's always less than the headline CTC percentage.
NPS — Extra ₹50K Deduction
Section 80CCD(1B) gives an additional ₹50,000 deduction beyond the ₹1.5L 80C limit in the Old Regime. If your employer offers NPS under Section 80CCD(2), up to 10% of Basic is deductible — and this benefit is available even under the New Regime.
Variable Pay Changes Everything
Variable or performance pay (bonuses) is fully taxable. A ₹1L bonus at a 30% marginal rate gives you only ₹70K after tax. Factor this into your take-home projections and don't count on bonuses for fixed expenses.
Frequently Asked Questions
Common questions about CTC, take-home salary, PF, HRA and income tax deductions