CTC to In-Hand Salary Calculator
Convert your CTC (Cost to Company) to actual in-hand salary. Compare old vs new tax regime and understand complete salary breakdown.
Salary Details
Total Cost to Company per year
Usually 40-50% of CTC
House Rent Allowance
For HRA exemption calculation
Age affects some tax deductions
Tax Regime
Monthly In-Hand Salary
₹72,416
86.9% of CTC
Annual Summary
Deductions Breakdown
Tax Regime Comparison
Old Regime
₹22,090
Tax
New Regime
₹37,305
Tax
Old regime saves ₹15,215 in tax
Tax Saving Tips
- • Maximize 80C: Invest in ELSS, PPF (₹1.5L)
- • HRA: Pay rent and claim exemption
- • Health Insurance: 80D deduction (₹25K)
- • NPS: Additional ₹50K under 80CCD(1B)
- • Home Loan: Save ₹2L on interest (Sec 24)
CTC Breakdown
Hidden Components in CTC:
These don't appear in your payslip but are part of CTC
Monthly Breakdown
Understanding Your Salary
What is CTC (Cost to Company)?
CTC is the total amount a company spends on an employee annually. It includes your gross salary, benefits, bonuses, and employer contributions (PF, gratuity). Your actual take-home salary (in-hand) is significantly lower than CTC due to various deductions.
Hidden Components in CTC
Companies include employer PF contribution (12% of basic) and gratuity provision (4.81% of CTC) in your CTC. These amounts don't show up in your monthly payslip, but they're technically part of what the company pays for you. This is why in-hand salary is typically 65-75% of CTC.
How to Negotiate Salary
Don't just focus on CTC. Negotiate for higher basic salary (affects PF and other benefits) and ensure transparent breakdown. Ask: "What will be my monthly in-hand salary?" A ₹10L CTC with 40% basic gives better benefits than 30% basic, even if CTC is same.
HRA Exemption Rules
- Exemption is minimum of: Actual HRA received, Rent paid minus 10% of basic, or 50% of basic (metro) / 40% (non-metro)
- Rent Receipts: Need rent receipts above ₹1L/year
- Live with Parents: You can pay them rent and claim HRA
- PAN Required: If annual rent exceeds ₹1 lakh
Old vs New Tax Regime: Which to Choose?
| Aspect | Old Regime | New Regime |
|---|---|---|
| Tax Rates | Higher slabs | Lower slabs |
| Deductions | 80C, 80D, HRA, etc. allowed | No deductions allowed |
| Best For | High investments (₹2L+) | Low investments, simple tax filing |
| Rebate | Up to ₹5L income | Up to ₹7L income |
How to Maximize Take-Home Salary
- Claim HRA: If paying rent, ensures HRA portion is tax-free
- Invest in 80C: ₹1.5L in ELSS, PPF, EPF saves up to ₹46,800 tax
- Flexible Benefits: Ask employer for fuel, food allowances (tax-free)
- NPS Investment: Additional ₹50K deduction (₹15,000 tax saving)
- Health Insurance: ₹25K deduction saves ₹7,800 in tax
- Choose Right Regime: Calculate both and pick lower tax option
Why CTC ≠In-Hand Salary
For a ₹10 LPA CTC, typical breakdown: Gross salary ₹8.5L (85%), minus PF ₹48K (5.6%), minus tax ₹50K-1L (6-12%), minus PT ₹2.4K (0.3%) = In-hand ₹7-7.5L (70-75% of CTC). The "missing" ₹2.5-3L goes to PF (yours + employer), gratuity provision, and taxes.
Frequently Asked Questions
What is in-hand salary for ₹10 LPA CTC?
For ₹10 LPA, in-hand salary is typically ₹58,000-₹62,000 per month (₹7-7.5L annually), which is 70-75% of CTC. Exact amount depends on salary structure, tax regime, and deductions claimed.
Why is in-hand salary much less than CTC?
CTC includes hidden components: Employer PF (12% of basic), gratuity provision (4.81%), plus your deductions like employee PF (12%), income tax (TDS), and professional tax. Together these reduce in-hand to 65-75% of CTC.
Can I negotiate my CTC breakdown?
Yes! Negotiate for higher basic salary % (better for PF and benefits), more allowances like fuel/food (tax-free components), and transparent breakdown showing exact monthly in-hand. Don't just accept the CTC number.
Old or new tax regime - which is better?
If you invest ₹2L+ yearly (80C, 80D, home loan), old regime is better. If you invest little and want simpler tax filing, new regime with lower rates works better. Use our calculator to compare both.
How much tax on ₹12 LPA salary?
New regime: ~₹80,000-₹1L/year. Old regime with full deductions (₹2L): ~₹50,000-₹70,000/year. The 20-30% tax bracket typically applies to this income range, but deductions significantly reduce liability.
What percentage should basic salary be?
Ideally 40-50% of CTC. Higher basic means higher PF contribution (both yours and employer's), better gratuity, and bigger HRA. A ₹10L CTC with 50% basic (₹5L) is better than 30% basic (₹3L) for long-term wealth building.
How to calculate HRA exemption?
HRA exemption = Minimum of: (1) Actual HRA received, (2) Rent paid - 10% of basic salary, (3) 50% of basic for metro cities or 40% for non-metro. Save rent receipts as proof.
What is professional tax?
Professional Tax is a state tax on salaried individuals. It's typically ₹200/month (₹2,400/year) in most states, but varies - Maharashtra charges ₹2,500/year, Karnataka ₹2,400/year. It's deducted from your monthly salary.
Can I save tax if salary is below ₹7 lakhs?
Yes! Under new regime, salaries up to ₹7L have zero tax (after ₹50K standard deduction). Under old regime, it's ₹5L. Even if you earn ₹7.5L, smart deductions under old regime can bring taxable income below ₹5L = zero tax.
What is the difference between gross and net salary?
Gross salary = All earnings (basic + HRA + allowances + bonuses) before any deductions. Net salary (in-hand) = Gross minus all deductions (PF + Tax + PT). Net is what actually hits your bank account each month.