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

CTC (Cost to Company) is the total expense a company incurs on an employee per year. It includes your gross salary plus employer contributions like EPF and ESI. In-hand salary (or net take-home pay) is what you actually receive in your bank account after deductions such as employee PF, ESI, professional tax, and income tax (TDS).

How is Basic Salary calculated from CTC?

Basic salary is typically 40-50% of CTC. In most standard CTC structures, it is set at 40% of CTC. Basic salary is the foundation on which HRA, PF, gratuity, and many other components are calculated. A higher basic leads to higher PF contributions but also higher taxable income.

What is HRA and how is it different for Metro and Non-Metro cities?

HRA (House Rent Allowance) is a component of salary meant to help employees with rental expenses. For metro cities (Delhi, Mumbai, Chennai, Kolkata), HRA is typically 50% of basic salary. For non-metro cities, it is 40% of basic salary. You can claim HRA tax exemption under the old tax regime if you pay rent.

How does EPF (Provident Fund) affect my in-hand salary?

Both the employer and employee contribute 12% of basic salary to EPF. If basic salary exceeds Rs.15,000/month, the contribution is capped at Rs.1,800/month (12% of Rs.15,000). Employee PF is deducted from your salary, reducing your in-hand pay. Employer PF may or may not be included in your CTC depending on company policy.

When is ESI applicable?

ESI (Employee State Insurance) is applicable when the employee's monthly gross salary is Rs.21,000 or below. The employee contributes 0.75% and the employer contributes 3.25% of gross salary. ESI provides medical, sickness, maternity, and disability benefits to employees.

What is Professional Tax and which states charge it?

Professional Tax is a state-level tax levied on salaried individuals. The maximum amount is Rs.2,500 per year. States like Maharashtra, Karnataka, West Bengal, Telangana, and Andhra Pradesh charge professional tax. Some states like Tamil Nadu, Delhi, Uttar Pradesh, and Haryana do not levy professional tax.

Which tax regime should I choose - Old or New?

The New Tax Regime (FY 2025-26) offers lower slab rates with a standard deduction of Rs.75,000 but does not allow most deductions (80C, 80D, HRA exemption). The Old Regime allows deductions under 80C (up to Rs.1.5 lakh), 80D (health insurance), HRA exemption, etc. If your total deductions exceed Rs.3-4 lakh, the old regime may save more tax. Use our calculator to compare both regimes.

What are the new tax regime slabs for FY 2025-26?

The new tax regime slabs for FY 2025-26 are: Up to Rs.4 lakh: 0% (No tax), Rs.4-8 lakh: 5%, Rs.8-12 lakh: 10%, Rs.12-16 lakh: 15%, Rs.16-20 lakh: 20%, Rs.20-24 lakh: 25%, Above Rs.24 lakh: 30%. Standard deduction: Rs.75,000. Tax rebate available for income up to Rs.12 lakh.

Can I generate a payslip using this tool?

Yes! Switch to the Payslip Generator tab to create a professional payslip. Enter your company details, employee information, earnings, and deductions. You can preview the payslip on screen and download it as a PDF using the print function. The payslip includes earnings breakdown, deductions, and net pay in words.

Is the salary calculation accurate?

This calculator provides an estimated salary breakdown based on standard CTC structures. Actual in-hand salary may vary based on your company's specific salary structure, additional allowances, bonus components, variable pay, and other factors. For precise calculations, consult with your HR department or a CA.

Free Tool • Updated FY 2025-26

Free CTC to In-Hand Salary Calculator

Instantly calculate your monthly take-home salary from CTC. Get a detailed breakdown of Basic, HRA, PF, ESI, Professional Tax, and Income Tax for FY 2025-26. Generate professional payslips for free.

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CTC to In-Hand Salary Calculator

LatestUpdated for FY 2025-26 | New & Old Tax Regime | HRA + 80C Optimizer

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Understanding CTC to In-Hand Salary in India

CTC (Cost to Company) is the total amount a company spends on an employee annually. However, the actual salary you receive in your bank account, known as in-hand or take-home salary, is significantly lower due to various deductions. Understanding the difference between CTC and in-hand salary is crucial for financial planning.

CTC Breakdown Components

A standard CTC in India includes the following components:

Basic Salary: Typically 40-50% of CTC. This is the core component on which PF, HRA, and gratuity are calculated.
House Rent Allowance (HRA): 50% of basic for metro cities (Delhi, Mumbai, Chennai, Kolkata) and 40% for non-metro cities. HRA exemption can be claimed under the old tax regime.
Special Allowance: The balancing component after basic and HRA. Fully taxable.
Employer PF Contribution: 12% of basic salary (capped at Rs.1,800/month if basic exceeds Rs.15,000/month).
Employer ESI: 3.25% of gross salary (applicable only if monthly gross is Rs.21,000 or below).

EPF (Provident Fund) Rules

The Employees' Provident Fund (EPF) is a retirement savings scheme managed by EPFO. Both employer and employee contribute 12% of basic salary. Key rules:

Mandatory for establishments with 20 or more employees.
If basic salary exceeds Rs.15,000/month, PF contribution can be restricted to Rs.1,800/month (12% of Rs.15,000).
Employee PF contribution qualifies for Section 80C deduction under the old tax regime.
Interest earned on EPF is tax-free up to Rs.2.5 lakh contribution per year.

Need to register your company for EPF? Register for EPF with RegisterKaro.

ESI Rules and Eligibility

The Employees' State Insurance (ESI) scheme provides medical, sickness, maternity, and disability benefits. Key points:

Applicable when employee's monthly gross salary is Rs.21,000 or below.
Employee contribution: 0.75% of gross salary.
Employer contribution: 3.25% of gross salary.
Mandatory for factories with 10+ workers and other establishments with 20+ employees.

Professional Tax Rates by State (2025)

Professional Tax is a state-level tax with a maximum cap of Rs.2,500 per year. Here are rates for major states:

Maharashtra: Rs.200/month (Rs.300 in February) = Rs.2,500/year
Karnataka: Rs.200/month = Rs.2,400/year
West Bengal: Rs.150/month = Rs.1,800/year
Telangana & Andhra Pradesh: Rs.200/month = Rs.2,400/year
Madhya Pradesh: Rs.208/month = Rs.2,496/year
Gujarat, Kerala, Goa: Rs.200/month
Tamil Nadu, Delhi, Haryana, UP, Rajasthan: No Professional Tax

Income Tax Slabs FY 2025-26

New Tax Regime (Default)

Up to Rs.4,00,000: Nil
Rs.4,00,001 - Rs.8,00,000: 5%
Rs.8,00,001 - Rs.12,00,000: 10%
Rs.12,00,001 - Rs.16,00,000: 15%
Rs.16,00,001 - Rs.20,00,000: 20%
Rs.20,00,001 - Rs.24,00,000: 25%
Above Rs.24,00,000: 30%

Standard Deduction: Rs.75,000. Tax rebate under Section 87A available for taxable income up to Rs.12,00,000.

Old Tax Regime (Below 60 years)

Up to Rs.2,50,000: Nil
Rs.2,50,001 - Rs.5,00,000: 5%
Rs.5,00,001 - Rs.10,00,000: 20%
Above Rs.10,00,000: 30%

Standard Deduction: Rs.50,000. Allows deductions under 80C, 80D, HRA exemption, home loan interest, etc.

Need expert help with your tax filing? File your ITR with RegisterKaro or get assistance with TDS return filing.

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