CTC (Cost to Company) and take-home (in-hand) salary are very different numbers. A Rs 15 lakh CTC offer typically translates to Rs 80,000–90,000 per month in hand — not Rs 1.25 lakh as many candidates assume. Understanding the gap helps you negotiate better and plan more accurately. This guide breaks down every deduction, with real worked examples across CTC ranges.
Answer Engine Summary
In-hand salary from CTC in India is typically 65–80% of CTC after deducting employer PF, gratuity provision, employee PF, income tax (TDS), and professional tax. At Rs 15L CTC, expect Rs 83,000–90,000/month in-hand under the new tax regime. Use the RupeeKit Salary In-Hand Calculator for a personalised estimate.
Last updated: 13 July 2026
Educational information only. Verify applicability with official guidance and qualified professionals where needed.
What is CTC and why is it not your actual salary?
CTC (Cost to Company) is the total amount a company spends on an employee per year. It includes your cash salary but also employer PF contributions, gratuity provision, medical insurance premium, ESOPs, joining bonus, and other benefits. Many of these do not reach your bank account directly.
Your "gross salary" is what the company pays you as cash (before tax deductions). Your "net salary" or "take-home salary" is what lands in your bank after TDS, employee PF, and professional tax are deducted.
The most common CTC components are: (1) Basic Salary — typically 30–50% of CTC. (2) HRA (House Rent Allowance) — typically 40–50% of Basic. (3) Special Allowance — balancing figure to make up CTC. (4) Other allowances (LTA, Medical). (5) Employer PF — 12% of Basic (provident fund contribution). (6) Gratuity provision — 4.81% of Basic. (7) Variable pay / bonus — paid quarterly or annually.
- Employer PF (12% of Basic) is part of CTC but does not reach your salary account directly
- Gratuity provision (~4.81% of Basic) is part of CTC; the general rule requires 5 years of continuous service, though eligible fixed-term employees qualify after 1 year
- Variable pay / bonus is often included in CTC at target but may be partially paid
- Health insurance premium paid by employer is part of CTC (no cash benefit)
CTC to In-Hand Salary — What Gets Deducted?
Breakdown of PF, TDS, professional tax and gratuity deductions
Step-by-step: how to derive take-home from CTC
Step 1 — Identify non-cash CTC components: Employer PF (12% of Basic) + Gratuity (4.81% of Basic) + Insurance premium + any other benefits. Subtract these from CTC to get Gross Monthly Salary.
Step 2 — Calculate Gross Monthly Salary: Gross Salary = (CTC − Employer PF − Gratuity) / 12.
Step 3 — Compute Employee PF: 12% of Basic salary per month (or capped at Rs 1,800/month if Basic ≤ Rs 15,000).
Step 4 — Compute TDS (monthly): Estimate annual taxable income = Gross Salary × 12 − Standard Deduction (Rs 75,000 under new regime) − eligible employer NPS deduction under Section 80CCD(2), if included in the salary structure. Do not subtract the employee's Section 80CCD(1B) self-contribution under the new regime. Apply the new-regime rules and divide the annual tax estimate by 12.
Step 5 — Professional Tax: Typically Rs 200/month in most states (varies — Karnataka, Maharashtra, AP, Telangana apply it; many states do not).
Step 6 — In-Hand = Gross Monthly Salary − Employee PF − TDS − Professional Tax.
Worked examples: CTC to take-home at different salary levels
Example 1 — Rs 10 lakh CTC (new regime): Assume Basic = Rs 4L/year (40% CTC). Employer PF = 12% × 4L = Rs 48K. Gratuity = 4.81% × 4L = Rs 19.2K. Gross annual salary = 10L − 48K − 19.2K = Rs 9.33L → Rs 77,700/month. Employee PF = 12% × 33,333/month Basic = Rs 4,000/month. Taxable income = 9.33L − 75K SD = Rs 8.58L. Tax (new regime): 4–8L = 20K; 8–8.58L (10%) = 5,800. Total = Rs 25,800 → monthly TDS ≈ Rs 2,150. In-hand ≈ Rs 77,700 − Rs 4,000 − Rs 2,150 − Rs 200 = Rs 71,350/month.
Example 2 — Rs 15 lakh CTC (new regime): Typical structure — Basic Rs 50K/month, HRA Rs 25K, Special Allowance Rs 42K → Gross Rs 1,17,000/month (employer PF Rs 6K and gratuity Rs 2.4K are in CTC but paid separately). Employee PF deduction: Rs 6,000/month. Taxable income for TDS: gross cash salary Rs 14.04L (Rs 1,17,000 × 12) minus standard deduction Rs 75K = Rs 13.29L. Tax: 4–8L = Rs 20K; 8–12L = Rs 40K; 12–13.29L (15%) = Rs 19,350. Total tax = Rs 79,350 + 4% cess = Rs 82,524 → TDS ≈ Rs 6,877/month. In-hand ≈ Rs 1,17,000 − Rs 6,000 − Rs 6,877 − Rs 200 = Rs 1,03,923/month.
Example 3 — Rs 30 lakh CTC (new regime): At this level, the 30% slab applies partially. Expect in-hand of approximately Rs 1,45,000–1,60,000/month. Exact amount depends on Basic split, HRA (old regime only), NPS contributions, and bonus timing. Use the RupeeKit Salary In-Hand Calculator for a precise computation.
Practical Example: Quick reference table — CTC to approximate in-hand
Rs 6L CTC → ~Rs 42,000–46,000/month | Rs 8L CTC → ~Rs 54,000–58,000/month | Rs 10L CTC → ~Rs 70,000–75,000/month | Rs 12L CTC → ~Rs 79,000–85,000/month | Rs 15L CTC → ~Rs 85,000–95,000/month | Rs 20L CTC → ~Rs 1,02,000–1,12,000/month | Rs 25L CTC → ~Rs 1,22,000–1,35,000/month | Rs 30L CTC → ~Rs 1,42,000–1,58,000/month. (New regime; actual varies by PF structure and bonus timing.)
Tips to maximise take-home from CTC
Salary restructuring: ask HR to maximise tax-exempt allowances. Under the new regime, LTA (Leave Travel Allowance) and meal vouchers do not provide a deduction, but under the old regime they do. If you stay in the old regime, structuring higher HRA, LTA, and professional development allowances can reduce taxable income.
Employer NPS: ask your employer to route a portion of CTC as employer NPS contribution. Employer NPS up to 10% of basic salary is fully tax-exempt under Section 80CCD(2) in both old and new regimes — it does not consume any of your Rs 1.5 lakh 80C limit. This can reduce taxable income without reducing CTC.
Voluntary PF: if you want to save more, you can increase voluntary PF contribution (EPFO allows up to 100% of basic). However, it reduces take-home — useful for forced saving, not for maximising monthly cash.
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Frequently Asked Questions
What percentage of CTC is take-home salary in India?
For most salaried employees in India, take-home (net in-hand) salary is 65–80% of CTC. The lower the CTC, the higher the percentage (less tax). At Rs 6–8L CTC, take-home may be 75–80% of CTC. At Rs 20–30L CTC, take-home drops to 60–70% due to higher tax brackets.
Is employer PF part of CTC?
Yes. Most companies include the employer's 12% PF contribution (on Basic salary) as part of CTC. This amount goes to your EPF account, not your salary account. It accumulates and is accessible at retirement or resignation. EPFO rules mandate the 12% employer contribution for establishments with 20+ employees. Source: The Employees' Provident Funds and Miscellaneous Provisions Act, 1952 (administered by EPFO — epfindia.gov.in).
Is gratuity included in CTC?
Many companies include a gratuity provision in CTC (often shown as approximately 4.81% of basic salary per year). The general eligibility condition under the Code on Social Security, 2020 is five years of continuous service, while eligible fixed-term employees qualify after one year under the contract and other statutory exceptions may apply.
How is TDS on salary deducted?
Your employer deducts TDS (Tax Deducted at Source) under Section 192 of the Income Tax Act. You declare your tax regime and investments to HR in April, and HR computes estimated annual tax and deducts 1/12th per month. Shortfalls are collected in the last 2–3 months of the financial year. TDS is deposited to the government and shows in your Form 26AS and AIS on the IT portal (incometax.gov.in).
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