CTC to In-Hand Salary Calculator — India

How to Calculate In-Hand Salary from CTC

Your CTC (Cost to Company) is everything your employer spends on you — not what reaches your bank account. To get from CTC to in-hand salary, work through these steps:

• Step 1 — Remove the employer's hidden parts. If employer PF and gratuity sit inside your CTC, subtract them first. What remains is your gross salary.
• Step 2 — Find your taxable income. From gross salary, subtract the standard deduction (₹75,000 new regime / ₹50,000 old regime) and, in the old regime only, your HRA exemption, 80C, 80D and professional tax deductions. Professional tax is not deductible under the new regime.
• Step 3 — Apply the slab rates for FY 2026-27, then the Section 87A rebate, any surcharge, and the 4% health & education cess. That gives your total income tax for the year (your monthly TDS is roughly this divided by 12).
• Step 4 — Subtract what leaves every month: your employee PF contribution and professional tax.
• Step 5 — Divide by 12. Gross − tax − employee PF − professional tax, divided by 12, is your monthly in-hand salary.

Example: on a ₹12 lakh CTC (50% basic, PF capped, employer PF + gratuity inside CTC), gross salary is ₹11,49,540. Taxable income in the new regime is ₹10,74,540 after the ₹75,000 standard deduction (professional tax is not deductible under the new regime, though it is still deducted from your pay) — the tax on it (₹47,454) is fully wiped out by the Section 87A rebate, so income tax is zero and in-hand comes to ₹93,795 a month. Change any input above and watch each number move — that is the fastest way to learn your own payslip.

New vs Old Tax Regime FY 2026-27: Which Is Better?

The new regime offers lower slab rates, a ₹75,000 standard deduction, and a Section 87A rebate that wipes out tax on taxable income up to ₹12 lakh — but it gives up almost all deductions. The old regime keeps higher rates but lets you claim HRA exemption, 80C (₹1.5 lakh), 80D and more, with a ₹50,000 standard deduction.

Choose the new regime if you pay little or no rent, have few investments in 80C, or your CTC is up to about ₹12.75 lakh (where new-regime tax is zero). For most salaried employees without a home loan or large HRA, the new regime wins — the verdict line on the calculator above tells you by exactly how much.

Choose the old regime if your deductions are large: high rent with a big HRA component, full ₹1.5 lakh of 80C, health premiums, and home-loan interest can together cut taxable income by ₹4–6 lakh, which can beat the new regime's lower rates — typically at higher incomes. Run both numbers before you declare your regime to payroll; salaried employees can switch every year.

Why Is In-Hand Salary Less Than CTC?

Because CTC is the employer's total cost, and several parts of it never pass through your monthly bank credit:

• Employer PF — the company's EPF contribution is inside CTC but goes straight to your PF account.
• Gratuity — about 4.81% of basic is set aside inside CTC and paid only after 5 years of service.
• Employee PF — your own 12% (or capped ₹1,800/month) is deducted from gross pay. It is still your money, just locked in EPF.
• Income tax (TDS) — deducted monthly based on your projected annual tax.
• Professional tax — a small state tax, roughly ₹200/month in states that levy it.
• Variable pay / bonus — counted in CTC but paid once or twice a year, not monthly.

Add these up and a ₹12 lakh CTC commonly becomes roughly ₹9.8–11.3 lakh of actual annual take-home depending on the regime and PF mode. The gap is not your employer cheating you — it is how the CTC is packaged. Always negotiate and compare offers on in-hand, not CTC.