Indian Salary: CTC to In-Hand Calculator Guide
We break down how Indian salaries work - from CTC to in-hand. Understand PF, gratuity, HRA, and the new vs old tax regime.
In India, the salary you're offered (CTC) and the salary you receive (in-hand) are very different numbers. A ₹15 LPA offer might mean only ₹1 lakh per month in your bank account. Let's break down exactly how it works.
What is CTC?
CTC (Cost to Company) includes everything your employer spends on you:
| Component | Typical % of CTC |
|---|---|
| Basic Salary | 40-50% |
| HRA (House Rent Allowance) | 20-25% |
| Special Allowance | 15-25% |
| PF (Employer Contribution) | 12% of Basic |
| Gratuity | 4.81% of Basic |
| Insurance & Perks | Variable |
The catch: PF employer contribution and gratuity aren't in your monthly salary - they're deferred benefits.
CTC to In-Hand: Real Examples
Using our Indian Salary Calculator, here's what different CTCs actually mean:
₹6 LPA (₹50,000/month CTC)
| Component | Monthly | Annual |
|---|---|---|
| Basic | ₹20,000 | ₹2,40,000 |
| HRA | ₹10,000 | ₹1,20,000 |
| Special Allowance | ₹15,200 | ₹1,82,400 |
| PF (Employer) | ₹2,400 | ₹28,800 |
| Gratuity | ₹962 | ₹11,544 |
| Insurance | ₹1,438 | ₹17,256 |
| Gross | ₹50,000 | ₹6,00,000 |
Deductions:
| Deduction | Monthly |
|---|---|
| PF (Employee 12%) | ₹2,400 |
| Professional Tax | ₹200 |
| Income Tax (New Regime) | ₹0 |
| In-Hand | ₹42,600 |
At ₹6 LPA, the new tax regime means zero income tax!
₹10 LPA (₹83,333/month CTC)
| Component | Monthly | Annual |
|---|---|---|
| Basic | ₹33,333 | ₹4,00,000 |
| HRA | ₹16,667 | ₹2,00,000 |
| Special Allowance | ₹25,333 | ₹3,04,000 |
| PF (Employer) | ₹4,000 | ₹48,000 |
| Other Components | ₹4,000 | ₹48,000 |
Deductions:
| Deduction | Monthly |
|---|---|
| PF (Employee) | ₹4,000 |
| Professional Tax | ₹200 |
| Income Tax | ₹4,167 |
| In-Hand | ₹66,966 |
Annual In-Hand: ₹8,03,600 (vs ₹10 LPA CTC)
₹15 LPA (₹1,25,000/month CTC)
| Deduction | Monthly |
|---|---|
| PF (Employee) | ₹6,000 |
| Professional Tax | ₹200 |
| Income Tax (New Regime) | ₹12,500 |
| In-Hand | ₹97,300 |
Annual In-Hand: ₹11,67,600
₹25 LPA (₹2,08,333/month CTC)
| Deduction | Monthly |
|---|---|
| PF (Employee) | ₹10,000 |
| Professional Tax | ₹200 |
| Income Tax | ₹30,833 |
| In-Hand | ₹1,55,300 |
Annual In-Hand: ₹18,63,600
₹50 LPA (₹4,16,667/month CTC)
| Deduction | Monthly |
|---|---|
| PF (Employee) | ₹15,000 |
| Professional Tax | ₹200 |
| Income Tax | ₹91,667 |
| In-Hand | ₹2,89,800 |
Annual In-Hand: ₹34,77,600
New vs Old Tax Regime: Which is Better?
India now has two tax regimes. Here's the comparison:
New Tax Regime (Default from FY 2023-24)
| Income Slab | Tax Rate |
|---|---|
| Up to ₹3,00,000 | Nil |
| ₹3,00,001 - ₹7,00,000 | 5% |
| ₹7,00,001 - ₹10,00,000 | 10% |
| ₹10,00,001 - ₹12,00,000 | 15% |
| ₹12,00,001 - ₹15,00,000 | 20% |
| Above ₹15,00,000 | 30% |
Standard deduction: ₹75,000 (increased in 2024)
Old Tax Regime
| Income Slab | Tax Rate |
|---|---|
| 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% |
Deductions allowed: 80C (₹1.5L), 80D (₹25-50K), HRA, LTA, etc.
Which to Choose?
| Salary | Old Regime Better If | New Regime Better If |
|---|---|---|
| Under ₹7.5 LPA | Rarely | Usually |
| ₹7.5 - ₹15 LPA | Deductions > ₹2.5L | Deductions < ₹2.5L |
| Above ₹15 LPA | Deductions > ₹3.75L | Deductions < ₹3.75L |
***** If you're paying significant home loan EMI, have high HRA claims, or max out 80C + 80D + NPS, the old regime might still be better. Otherwise, new regime is simpler and often cheaper.
HRA Exemption: The Biggest Deduction
If you live in rented accommodation, HRA exemption can save significant tax:
HRA Exemption = Minimum of:
- Actual HRA received
- 50% of Basic (metro) or 40% (non-metro)
- Rent paid - 10% of Basic
Example: Basic ₹5L, HRA ₹2.5L, Rent paid ₹2.4L/year (₹20K/month), Delhi
- Actual HRA: ₹2,50,000
- 50% of Basic: ₹2,50,000
- Rent - 10% Basic: ₹2,40,000 - ₹50,000 = ₹1,90,000
Exemption: ₹1,90,000 (lowest of three)
This reduces taxable income by ₹1.9L, saving ~₹57,000 in tax at 30% bracket!
PF: Forced Savings or Lock-in?
Your PF contribution (12% of Basic from both you and employer) is:
Pros:
- ₹ Tax-free interest (8%+ currently)
- Employer matches your contribution
- Builds retirement corpus
Cons:
- Money locked until retirement (mostly)
- 12% from your in-hand salary
At ₹15 LPA with ₹6L Basic:
- Your PF: ₹72,000/year
- Employer PF: ₹72,000/year
- Total retirement savings: ₹1,44,000/year
Quick Reference: CTC to In-Hand
| CTC | Approx In-Hand (Monthly) | Approx In-Hand (Annual) |
|---|---|---|
| ₹4 LPA | ₹30,000 | ₹3,60,000 |
| ₹6 LPA | ₹42,600 | ₹5,11,200 |
| ₹8 LPA | ₹55,000 | ₹6,60,000 |
| ₹10 LPA | ₹67,000 | ₹8,04,000 |
| ₹12 LPA | ₹78,000 | ₹9,36,000 |
| ₹15 LPA | ₹97,300 | ₹11,67,600 |
| ₹20 LPA | ₹1,25,000 | ₹15,00,000 |
| ₹25 LPA | ₹1,55,000 | ₹18,60,000 |
| ₹30 LPA | ₹1,80,000 | ₹21,60,000 |
| ₹50 LPA | ₹2,90,000 | ₹34,80,000 |
Approximate figures; actual varies based on salary structure
Metro City Comparison
Same CTC, different cities:
| City | HRA % | In-Hand Impact |
|---|---|---|
| Mumbai | 50% of Basic | Highest HRA exemption |
| Delhi | 50% of Basic | Highest HRA exemption |
| Bangalore | 40% of Basic | Lower HRA exemption |
| Hyderabad | 40% of Basic | Lower HRA exemption |
| Pune | 40% of Basic | Lower HRA exemption |
| Chennai | 40% of Basic | Lower HRA exemption |
Metro cities (Mumbai, Delhi, Kolkata, Chennai) get 50% HRA calculation vs 40% for others.
Calculate Your Exact In-Hand
Every company structures salary differently. Use our Indian Salary Calculator to:
- Convert CTC to in-hand
- Compare old vs new tax regime
- Calculate HRA exemption
- See PF and tax deductions
The Bottom Line
Key takeaways for Indian salaries:
- CTC ≠ In-Hand: Expect 70-85% of CTC as in-hand (depending on tax bracket)
- PF reduces in-hand: But builds retirement savings
- New regime is simpler: Often better unless you have high deductions
- HRA matters: Claim it properly to save significant tax
- Compare offers carefully: Look at in-hand, not just CTC
When evaluating job offers, always calculate the actual in-hand amount. A ₹15 LPA offer with different structures can mean ₹10-15K difference in monthly in-hand salary.