CTC Calculator - In-Hand Salary, Old vs New Regime

Your Cost to Company (CTC) and your in-hand salary are two very different numbers, and the gap between them catches many Indian employees off guard.

Reviewed by: CalcMojo Editorial Team

CTC includes everything your employer spends on you: basic pay, allowances, employer PF contribution, gratuity, insurance premiums, and other benefits. Your in-hand salary, or take-home pay, is what lands in your bank account after all deductions. This CTC calculator bridges that gap by breaking down your total CTC into each component and showing the exact amount you receive every month.

Enter your annual CTC and the calculator computes your basic salary, house rent allowance (HRA), special allowance, employer and employee PF contributions, professional tax, and estimated income tax. The result is your monthly and annual take-home salary with a clear breakdown of every deduction and benefit. It uses the latest Tax Year 2026-27 tax slabs under both the old and new tax regimes so you can compare which option saves you more.

Whether you are evaluating a job offer, negotiating a raise, or planning your monthly budget, understanding the gap between CTC and in-hand pay is essential for making informed financial decisions.

What Is CTC (Cost to Company)

CTC is the total annual cost your employer incurs to employ you. It is not your salary; it is the sum of every monetary benefit and contribution associated with your employment. A typical Indian CTC structure includes:

Direct benefits (paid to you):

Basic Salary: Usually 40% to 50% of CTC. This is the base on which most other components are calculated.
House Rent Allowance (HRA): Typically 40% to 50% of basic salary depending on metro vs non-metro city.
Special Allowance / Flexible Benefits: The balancing figure that makes up the remaining direct pay.
Leave Travel Allowance (LTA): A tax-exempt benefit for domestic travel expenses, usually a fixed annual amount.

Indirect benefits (paid on your behalf):

Employer Provident Fund (EPF) Contribution: 12% of basic salary, deposited to your PF account.
Gratuity: Approximately 4.81% of basic salary, accrued toward the gratuity payable when you leave after 5 years.
Employee State Insurance (ESI): Applicable if your gross salary is below ₹21,000 per month.
Health Insurance Premium: Group health insurance paid by the employer.

Deductions from your salary:

Employee Provident Fund: 12% of basic salary deducted from your pay.
Professional Tax: Varies by state, maximum ₹2,500 per year.
Income Tax (TDS): Deducted monthly based on your declared tax regime and investments.

The gap between CTC and take-home pay is typically 25% to 35% for most salaried employees, depending on the CTC structure and tax liability.

How In-Hand Salary Is Calculated

The calculation follows a clear sequence:

Step 1: Determine gross salary. Gross salary is CTC minus employer PF contribution, gratuity provision, and other employer-only benefits (insurance, etc.).

Gross Salary = CTC – Employer PF – Gratuity – Insurance

Step 2: Identify salary components. From gross salary, the standard breakdown is:

Basic: 40-50% of CTC (varies by company)
HRA: 40-50% of Basic
Special Allowance: Gross minus Basic minus HRA minus other fixed allowances

Step 3: Calculate deductions.

Employee PF: 12% of Basic (capped at ₹1,800/month if basic exceeds ₹15,000)
Professional Tax: As per state rules (₹200/month in most states)
Income Tax: Based on total taxable income and chosen tax regime

Step 4: Calculate take-home pay. In-Hand Salary = Gross Salary – Employee PF – Professional Tax – Income Tax (TDS)

For example, on a CTC of ₹10,00,000:

Basic: ₹4,00,000 (40% of CTC)
HRA: ₹2,00,000 (50% of Basic)
Employer PF: ₹48,000 (12% of Basic)
Gratuity: ₹19,231
Special Allowance: ₹2,32,769
Gross Salary: ₹9,32,769
Employee PF: ₹48,000
Professional Tax: ₹2,500
Income Tax (estimated, new regime): ₹41,600
Annual In-Hand: approximately ₹8,40,669
Monthly In-Hand: approximately ₹70,056

Old Tax Regime vs New Tax Regime

India offers two income tax regimes for individual taxpayers. The choice between them significantly impacts your take-home pay.

New Tax Regime (default from FY 2023-24 onward):

The new regime offers lower tax rates but removes most deductions and exemptions.

Up to ₹4,00,000: Nil (with standard deduction of ₹75,000)
₹4,00,001 – ₹8,00,000: 5%
₹8,00,001 – ₹12,00,000: 10%
₹12,00,001 – ₹16,00,000: 15%
₹16,00,001 – ₹20,00,000: 20%
₹20,00,001 – ₹24,00,000: 25%
Above ₹24,00,000: 30%

Rebate under Section 87A: No tax if total income does not exceed ₹12,00,000 (taxable income up to ₹12,75,000 including standard deduction).

Old Tax Regime:

Higher tax rates but allows deductions under Section 80C (₹1.5 lakh), 80D (health insurance), HRA exemption, LTA exemption, and many others.

Up to ₹2,50,000: Nil
₹2,50,001 – ₹5,00,000: 5%
₹5,00,001 – ₹10,00,000: 20%
Above ₹10,00,000: 30%

The old regime benefits employees who have significant deductions: home loan interest (Section 24), investment in PPF/ELSS/NPS (Section 80C/80CCD), and high HRA exemption. This calculator shows the tax under both regimes so you can compare.

Components That Reduce Your Take-Home Pay

Provident Fund. Both employer and employee contribute 12% of basic salary. The employer contribution is part of your CTC but does not reach your bank account directly. It grows in your EPF account with interest (currently 8.25% for FY 2024-25). Use our EPF Calculator to see how your PF corpus grows over time.

Gratuity. This is an employer-provided benefit calculated as (15/26) x Basic x Years of Service, payable when you complete 5 years. The monthly provision (approximately 4.81% of basic) is deducted from your CTC but not from your pay.

Professional Tax. A state-level tax deducted from your salary, capped at ₹2,500 per year. Rates vary by state. Maharashtra charges ₹2,500 for salaries above ₹10,000/month. Karnataka charges ₹2,400. Some states like Delhi do not levy professional tax.

Income Tax (TDS). Your employer deducts tax at source monthly based on your projected annual income and declared investments. The amount depends on your tax regime, deductions, and total income.

How to Evaluate a Job Offer Using CTC

When comparing job offers, CTC alone is not enough. Consider these factors:

Fixed vs variable pay. A CTC of ₹15 lakh with ₹3 lakh as performance bonus means your guaranteed pay is ₹12 lakh. Compare fixed components, not total CTC.

In-hand salary comparison. Calculate the in-hand salary for each offer using this calculator. An offer with a higher CTC but lower basic salary may result in lower take-home pay due to higher PF deductions and tax implications.

Benefits value. Employer-paid health insurance, stock options (ESOPs), meal coupons, and leave encashment have real value but do not appear in your bank account monthly.

Tax regime optimization. Run both offers through both tax regimes. Your optimal regime may change based on the salary structure of each offer.

Use the Income Tax Calculator (Old vs New) for a detailed tax computation, the HRA Calculator to check your HRA exemption eligibility, and the Gratuity Calculator to estimate your gratuity benefit.

This calculator provides estimates based on Tax Year 2026-27 tax slabs and rules. Consult a Chartered Accountant before filing.

Frequently Asked Questions

What is the difference between CTC and in-hand salary?

CTC is the total annual cost to your employer including salary, PF, gratuity, insurance, and other benefits. In-hand salary is what you actually receive in your bank account after all deductions (PF, tax, professional tax). The gap is typically 25-35% of CTC.

How is basic salary calculated from CTC?

Most Indian companies set basic salary at 40% to 50% of CTC. Some companies use a fixed percentage while others allow flexibility. Basic salary determines your PF contribution, HRA, and gratuity, so a higher basic means higher PF savings but lower take-home pay.

What is HRA and how is it calculated?

House Rent Allowance is a salary component intended to cover housing costs. It is typically 40% of basic for non-metro cities and 50% for metro cities. HRA can be partially or fully exempt from tax if you pay rent, subject to specific limits calculated under Section 10(13A).

Should I choose the old or new tax regime?

The new regime is better if you have few deductions. The old regime benefits those with significant deductions: home loan interest, PPF/ELSS investments of ₹1.5 lakh+, and high HRA exemption. Use this calculator to compare both and choose the one that results in lower tax.

What is professional tax and how much is it?

Professional tax is a state-level tax on salaried individuals. The maximum is ₹2,500 per year. Rates vary by state. It is deducted monthly from your salary. Some states like Delhi do not levy professional tax.

Does employer PF contribution come out of my salary?

Employer PF (12% of basic) is part of your CTC but is not deducted from your pay. It is deposited directly to your EPF account by the employer. Employee PF (another 12% of basic) is deducted from your salary.

What is the gratuity component in CTC?

Gratuity is an employer-provided benefit accrued at approximately 4.81% of basic salary per month. It is payable when you complete 5 continuous years of service. The provision is included in CTC but does not affect your monthly take-home pay.

How can I increase my take-home salary?

Opt for a lower basic salary (reduces PF deduction but also reduces retirement savings), maximize tax-saving investments under the old regime, claim HRA exemption if paying rent, and choose the tax regime that results in lower tax liability.

Sources & Methodology

Income tax slabs based on Finance Act 2026 for Tax Year 2026-27 as published by the Income Tax Department of India.
EPF contribution rules per the Employees’ Provident Funds and Miscellaneous Provisions Act, 1952.
Professional tax rates based on respective state government notifications.
Gratuity calculation per the Payment of Gratuity Act, 1972 formula: (15/26) x Last Drawn Basic x Years of Service.
Standard deduction of ₹75,000 under the new tax regime per Budget 2024 announcement.

Tax slabs and rules are for Tax Year 2026-27. Verify current rules with a tax professional. Data accurate as of: April 2026