CTC vs In-Hand Salary: What is the Difference?
CTC (Cost to Company) is the total amount your employer spends on you in a year. In-hand salary (take-home pay) is what actually lands in your bank account every month. The difference comes from the employer’s PF contribution, your own PF, professional tax, income tax (TDS) and, in many companies, gratuity, insurance and variable pay that is paid later.
This CTC to in-hand salary calculator shows your monthly take-home pay, annual take-home and deductions for both the new and the old income tax regime, using the latest slabs.
How In-Hand Salary is Calculated
The calculator uses these assumptions, which match a typical private-sector salary structure:
- Basic salary is 50% of fixed CTC (CTC minus variable pay).
- Employee PF and employer PF are each 12% of basic salary.
- Professional tax is ₹2,400 a year (it differs by state).
- Variable pay or bonus is taxed in the year it is paid and is not part of the monthly take-home.
If your employer limits PF to the ₹15,000 wage ceiling, your PF deduction is lower and your take-home is higher than this estimate.
New Tax Regime Slabs for FY 2026-27
| Taxable income | Tax rate |
|---|---|
| Up to ₹4,00,000 | Nil |
| ₹4,00,001 to ₹8,00,000 | 5% |
| ₹8,00,001 to ₹12,00,000 | 10% |
| ₹12,00,001 to ₹16,00,000 | 15% |
| ₹16,00,001 to ₹20,00,000 | 20% |
| ₹20,00,001 to ₹24,00,000 | 25% |
| Above ₹24,00,000 | 30% |
- A standard deduction of ₹75,000 is available to salaried taxpayers.
- The Section 87A rebate makes tax zero if taxable income is up to ₹12 lakh, which means a salary of about ₹12.75 lakh is effectively tax-free. Just above ₹12 lakh, the tax is limited to the income above ₹12 lakh (marginal relief).
- A 4% health and education cess is added to the tax.
The old regime (₹50,000 standard deduction, slabs of 5%, 20% and 30% above ₹2.5 lakh, ₹5 lakh and ₹10 lakh, and many deductions) can still be better if your deductions such as 80C, HRA and home loan interest are large. Check your HRA with our HRA calculator.
In-Hand Salary Examples (New Regime, No Bonus)
| Annual CTC | Monthly PF (employee) | Income tax a year | Monthly in-hand |
|---|---|---|---|
| ₹6,00,000 | ₹3,000 | ₹0 | ₹43,800 |
| ₹12,00,000 | ₹6,000 | ₹0 | ₹87,800 |
| ₹15,00,000 | ₹7,500 | ₹83,460 | ₹1,02,845 |
| ₹20,00,000 | ₹10,000 | ₹1,67,440 | ₹1,32,513 |
| ₹30,00,000 | ₹15,000 | ₹4,19,640 | ₹1,84,830 |
Example: ₹12 lakh CTC
Basic is ₹6 lakh, so the employer and employee PF are each ₹72,000 a year. Taxable income is 12,00,000 − 72,000 (employer PF) − 75,000 = ₹10,53,000, which is below ₹12 lakh, so tax is zero. In-hand salary is about ₹87,800 a month. On the old regime the same CTC gives ₹77,894 a month because of the tax payable.
How to Use This Salary Calculator
- Enter your annual CTC and any variable pay or bonus that is part of it.
- Choose the tax regime.
- Read the monthly and annual in-hand salary and the PF and tax deductions. Use Preview & Save to keep a report.
Tip: For the PF part, see how it grows over the years with the EPF calculator, and add extra with the VPF calculator.
Ways to Increase Your Take-Home Pay
- Compare both regimes every year; the better one can change as your deductions change.
- Ask HR whether PF can be calculated on the ₹15,000 ceiling if you want more cash in hand.
- Use employer NPS contributions (Section 80CCD(2)), which are deductible even in the new regime within limits.
- Claim HRA correctly if you are in the old regime and pay rent.
Old vs New Tax Regime: Which Gives More Take-Home Pay?
For most salaried people with CTC up to about ₹12.75 lakh, the new regime means zero tax, so it is usually better unless you have very large deductions. For higher incomes, compare. The old regime can win only when your total deductions (80C, HRA, home loan interest, NPS, medical insurance) are very large, so test both with your real numbers.
Use the calculator for the new regime and the old regime with your CTC, then plug your actual deductions in the HRA calculator and 80C planner (EPF, PPF, ELSS) before deciding.