CTC to In-hand Salary Calculator 2026

Strip out the bits that don't actually reach your bank: employer PF contribution (12% of basic capped per EPFO rules), gratuity provision (4.81% of basic), and any insurance or NPS employer share. What remains is gross salary. From gross, subtract employee PF (12% of basic), professional tax (Rs 200 per month in most states), and TDS based on regime and slab. Divide by 12 for monthly take-home. On a Rs 12 lakh CTC with 50% basic, you typically take home around Rs 80,000-85,000 monthly under the new regime, depending on HRA, special allowance and where you live.

CTC is the total cost the company incurs for hiring you, so it includes everything the employer pays out, even if the money never lands in your account. Employer PF, gratuity provision, group medical premium, NPS employer contribution and even certain training budgets get bundled into CTC. But employer PF goes straight to your EPFO account and you can only access it after retirement, resignation followed by 2 months gap, or specified emergencies. So while it's your money in a long-term sense, it doesn't show up in monthly take-home. New employees often feel shortchanged when they see the difference; transparent HR teams break this down upfront.

Gratuity is not deducted from your salary monthly. The 4.81% of basic that you see in the CTC sheet is an employer-side provision the company sets aside or pays into a gratuity fund (LIC group scheme typically). You only receive gratuity at separation, and only after completing 5 years of continuous service (or in case of death/disability). So while it inflates your CTC on paper, your monthly take-home is unaffected by the gratuity line. At payout, up to Rs 20 lakh is tax-free under Section 10(10) for non-government employees covered under the Payment of Gratuity Act.

Professional tax is a state-level levy, so the amount varies. Maharashtra, Karnataka, West Bengal, Tamil Nadu, Andhra Pradesh, Telangana, Gujarat, Madhya Pradesh, Kerala and a few others charge it; states like UP, Delhi, Haryana and Rajasthan don't. The maximum is capped by the Constitution at Rs 2,500 per year. In Maharashtra and Karnataka, salaried persons earning above the threshold pay Rs 200 per month, with Rs 300 in February to make up the Rs 2,500 ceiling. Employer deducts and deposits it. You can claim the entire amount paid as a deduction under Section 16(iii) when filing ITR under the old regime.

Most Indian companies set basic at 40-50% of CTC. Going much lower triggers Code on Wages issues and reduces gratuity and PF. Going much higher inflates retirement contributions and shrinks take-home. A balanced split that I usually recommend: basic 50%, HRA at 50% of basic for metros (40% for non-metros), Rs 1,600 per month transport (largely irrelevant under new regime), some LTA, and the rest as special allowance. Keep basic high enough to meet PF wage definition (basic + DA) and gratuity calculations, but not so high that PF deductions eat into monthly cash flow. The right mix depends on city and tax regime choice.

Under the new regime (default from FY 2023-24), tax is lower at most slabs but you give up HRA, 80C, 80D, home loan interest under 24(b) and most other deductions. You still get Rs 75,000 standard deduction and 80CCD(2) employer NPS. Under the old regime, you can claim all those deductions but slabs are higher and 87A rebate is only up to Rs 5 lakh. For someone with rent, EPF, life insurance and home loan, old regime often takes home more. For a young professional with no major deductions, new regime almost always wins. Run both numbers; even Rs 1,000 a month adds up annually.

Variable pay is usually shown in CTC at 100% target, but companies pay 70-100% based on performance and business results, so it is safer to model in-hand salary on a base case, such as 80% variable payout, rather than assuming full CTC. Bonus and variable are fully taxable as salary in the year of receipt, and TDS is deducted at the marginal slab rate when paid out. They don't enter monthly in-hand because they hit your account quarterly or annually. Sign-on bonus often comes with a clawback clause if you leave within 12-24 months, so factor that into your effective compensation.