Last updated: 2026-10-21
Why is in-hand salary less than CTC?
CTC (Cost to Company) is everything your employer spends on you in a year, not what you receive. These parts come out before your salary reaches you:
- Employer's PF: 12% of basic (often capped at ₹1,800 a month) goes to your PF account. It's your money, but you can't spend it now.
- Gratuity: about 4.81% of basic, paid only if you stay 5+ years.
- Your own PF: another 12% of basic is deducted from your salary.
- Professional tax: up to ₹2,500 a year, depending on your state.
- Income tax (TDS): your yearly tax, spread over 12 months.
- Variable pay: bonuses are part of CTC but are paid once or twice a year.
In-hand salary for common CTCs (FY 2026-27, new regime)
Assuming basic at 50% of CTC, PF capped at ₹1,800 a month, gratuity in CTC, ₹2,400 professional tax and no variable pay:
| CTC | Monthly in-hand | Yearly tax |
|---|---|---|
| ₹6 lakh | ≈ ₹45,000 | ₹0 |
| ₹10 lakh | ≈ ₹77,500 | ₹0 |
| ₹12 lakh | ≈ ₹93,800 | ₹0 |
| ₹15 lakh | ≈ ₹1,10,800 | ≈ ₹88,500 |
| ₹20 lakh | ≈ ₹1,44,000 | ≈ ₹1,77,900 |
| ₹25 lakh | ≈ ₹1,74,800 | ≈ ₹2,97,300 |
How to increase your take-home pay
- Ask for employer NPS (80CCD(2)). Up to 14% of basic is tax-free even in the new regime.
- Check which regime is cheaper. This calculator picks the lower one automatically.
- Use the capped PF option if your employer offers it, to get more cash each month. Your retirement savings will grow more slowly.
- Claim HRA in the old regime if you pay high rent in a big city.
Frequently asked questions
What is the in-hand salary for ₹12 lakh CTC?
About ₹93,800 a month under the new regime, with basic at 50% of CTC, PF capped at ₹1,800 a month and gratuity included in CTC. There's no income tax at this level in FY 2026-27, because taxable income stays under ₹12 lakh after the ₹75,000 standard deduction.
Is employer PF part of my CTC?
Usually yes. Most companies include their 12% PF share in CTC, which is why your gross salary is lower than CTC. Check your offer letter's salary structure.
What is the difference between gross salary and in-hand salary?
Gross salary is CTC minus employer PF and gratuity. In-hand salary is gross salary minus your own PF, professional tax and income tax.
Why does my in-hand pay change in some months?
Employers adjust TDS during the year, for example after you submit investment proofs in January–March, or when a bonus is paid. Your total tax for the year stays the same.
Add HRA, 80C, 80D and more to see which regime saves you most.