How is PF calculated in a salary?

Employee PF is calculated at 12% of Basic + DA salary. The statutory cap is ₹15,000 of Basic, meaning the maximum mandatory employee PF contribution is ₹1,800 per month (12% of ₹15,000). Employees can voluntarily contribute more. Employer also contributes 12% of Basic (split into 3.67% EPF and 8.33% EPS), plus 0.5% EDLI and 0.5% admin charges.

What is Professional Tax and who deducts it?

Professional Tax (PT) is a state-level tax deducted from salary by the employer and deposited with the state government. Not all states levy PT — Delhi, Haryana, UP, and Rajasthan do not charge PT. States that do include Maharashtra (up to ₹200/month), Karnataka (₹200/month for salary above ₹15,000), West Bengal, Andhra Pradesh, and Telangana. The maximum PT under any state is ₹2,500 per year.

How is TDS calculated on salary?

TDS on salary is calculated on your estimated annual taxable income. Under the New Regime: Gross Annual Salary minus Standard Deduction of ₹75,000 gives the taxable income, on which the new slab rates apply. Under the Old Regime: Gross minus Standard Deduction (₹50,000) minus HRA exemption minus 80C/80D deductions gives taxable income. Tax is calculated on slabs, a 4% Health & Education Cess is added, and the result is divided by 12 for the monthly TDS amount.

Is the Gratuity amount included in CTC?

Yes, many employers include a Gratuity provision in the CTC structure. The Gratuity provision is calculated at 4.81% of Basic salary per year (which equals 15/26 days of Basic per year). This amount is set aside by the employer but is only paid to the employee after 5 years of continuous service. When included in CTC, it reduces your actual take-home salary even though you cannot access it immediately.

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CTC to In-Hand Salary Calculator — Free Online

Q: How do I calculate in-hand salary from CTC?

To calculate in-hand salary from CTC: Step 1 — Find your Gross Salary (CTC minus Employer PF and Gratuity provision). Step 2 — Deduct Employee PF (12% of Basic, capped at ₹1,800/month). Step 3 — Deduct ESI (0.75% of Gross if Gross is under ₹21,000/month). Step 4 — Deduct Professional Tax (state-specific, up to ₹200/month). Step 5 — Deduct TDS (calculated on taxable income under your chosen tax regime). The result is your monthly in-hand (take-home) salary.

Q: What is the difference between CTC and gross salary?

CTC (Cost to Company) is the total annual cost an employer incurs for an employee, including Employer PF (12% of Basic), Gratuity provision (4.81% of Basic), and all allowances. Gross Salary is the salary before employee-side deductions like Employee PF, ESI, TDS, and Professional Tax — but it excludes employer-side costs. In-hand salary is what you actually receive after all deductions from your gross salary.

Q: Which tax regime gives higher in-hand salary — Old or New?

For most salaried employees earning under ₹15 lakh annually, the New Tax Regime (FY 2026-27) gives higher in-hand salary because it has lower tax rates and a ₹75,000 standard deduction, and income up to ₹12 lakh is effectively tax-free due to the Section 87A rebate. The Old Regime can be beneficial if you have significant deductions under 80C (₹1.5 lakh), 80D, and HRA exemption that exceed the difference in slab rates.

Q: Is HRA fully exempt from tax?

HRA (House Rent Allowance) is only partially exempt under the Old Tax Regime. The exemption is the minimum of: (1) Actual HRA received, (2) 50% of Basic salary for metro cities or 40% for non-metro cities, and (3) Actual rent paid minus 10% of Basic salary. In the New Tax Regime, HRA exemption is not available, but the higher standard deduction (₹75,000) partially compensates for this.

Calculate your exact monthly take-home salary from annual CTC. Covers Employee PF, ESI, Professional Tax, TDS under Old and New Tax Regime (FY 2026-27). Instant results — no signup needed.

Annual CTC (₹ Lakhs)

Enter your annual CTC in lakhs (e.g. 6 for ₹6,00,000)

Basic Salary % of CTC

Typically 35–50% of CTC. Check your offer letter.

City Type (for HRA Exemption)

Tax Regime (FY 2026-27)

80C Investments (₹)

PPF, ELSS, LIC premium, home loan principal, etc. Max ₹1,50,000.

80D Health Insurance Premium (₹)

Medical insurance premium. Max ₹25,000 self (₹50,000 for senior citizens).

Professional Tax State

Monthly In-Hand Salary

—

Annual: —

Monthly Gross Salary

—

CTC: —

Component	Monthly (₹)	Annual (₹)
Gross Salary	—	—
(-) Employee PF (12% of Basic, max ₹1,800)	—	—
(-) Employee ESI (0.75% — if Gross ≤ ₹21,000)	—	—
(-) Professional Tax	—	—
(-) TDS (Income Tax / month)	—	—
= Monthly In-Hand Salary	—	—

💡 Calculating regime comparison…

How to Use the CTC Salary Calculator

Enter your Annual CTC in Lakhs
Type your total Cost to Company as mentioned in your offer letter or increment letter. Enter in lakhs — for example, type 6 for a CTC of ₹6,00,000.
Set your Basic Salary percentage
Enter the Basic salary percentage as defined in your salary structure. It is typically 40–50% of CTC. Check your offer letter or payslip. If unsure, use the default of 40%.
Select your City Type for HRA
Choose Metro if you work in Delhi, Mumbai, Bangalore, Chennai, Kolkata, or Hyderabad. This affects HRA exemption — metro cities get 50% of Basic as HRA, non-metro cities get 40%.
Choose your Tax Regime
Select New Regime (recommended for most) or Old Regime. If you choose Old Regime, enter your 80C investments and 80D health insurance premium to get a more accurate TDS calculation.
Select your Professional Tax state and click Calculate
Choose your working state from the dropdown, then click the orange Calculate button. Your complete salary breakdown appears instantly — monthly in-hand, annual salary, and a full deductions table.

How the CTC Salary Calculator Works — The Formula

This calculator follows the standard Indian payroll methodology used by HR teams across the country. Here is the step-by-step formula applied:

Step 1 — CTC Breakdown:
Annual Basic = CTC × Basic% (typically 40%)
Annual HRA = Basic × 50% (Metro) or 40% (Non-Metro)
Employer PF = 12% of Basic, capped at ₹21,600/year
Gratuity Provision = Basic × 4.81%
Special Allowance = CTC − Basic − HRA − Employer PF − Gratuity

Step 2 — Gross Salary:
Gross = Basic + HRA + Special Allowance

Step 3 — Employee Deductions:
Employee PF = 12% of Basic, capped at ₹1,800/month
ESI = 0.75% of Gross (only if Gross ≤ ₹21,000/month)
Professional Tax = State-specific slab (₹0 to ₹200/month)

Step 4 — TDS (New Regime, FY 2026-27):
Taxable Income = Gross − Standard Deduction (₹75,000)
Tax on slabs: 0-4L=0%, 4-8L=5%, 8-12L=10%, 12-16L=15%, 16-20L=20%, 20-24L=25%, >24L=30%
Rebate u/s 87A: Zero tax if taxable income ≤ ₹12 lakh
Monthly TDS = (Total Tax + 4% Cess) ÷ 12

Step 5 — In-Hand Salary:
Monthly In-Hand = Gross/12 − Employee PF − ESI − Professional Tax − Monthly TDS

Formula reviewed and validated by Vipul Jaganiya, Indian Payroll Compliance expert specialising in PF, ESI, and Income Tax computation for salaried employees under the Indian taxation framework.

Real-World Examples — CTC to In-Hand Salary

The following examples show the actual in-hand salary for three common CTC levels under the New Tax Regime for FY 2026-27, assuming 40% Basic, metro city, Maharashtra Professional Tax, and no ESI (all gross salaries exceed ₹21,000/month).

Annual CTC	Monthly Gross	Employee PF	Prof. Tax	Monthly TDS	Monthly In-Hand
₹4,00,000 (4 LPA)	₹27,983	₹1,600	₹200	₹0 (under 87A rebate)	₹26,183
₹6,00,000 (6 LPA)	₹42,583	₹1,800	₹200	₹0 (under 87A rebate)	₹40,583
₹10,00,000 (10 LPA)	₹71,667	₹1,800	₹200	₹2,358	₹67,309
₹15,00,000 (15 LPA)	₹1,07,500	₹1,800	₹200	₹9,858	₹95,642
₹20,00,000 (20 LPA)	₹1,43,333	₹1,800	₹200	₹19,858	₹1,21,475

* Assumes 40% Basic, metro HRA, Maharashtra PT, New Tax Regime FY 2026-27. Actual figures may vary based on salary structure and individual deductions.

Frequently Asked Questions

How do I calculate in-hand salary from CTC?

In-hand salary = Gross Salary minus Employee PF (12% of Basic, max ₹1,800/month) minus ESI (0.75% if Gross ≤ ₹21,000/month) minus Professional Tax (state-specific) minus TDS (income tax divided by 12 months). Gross salary itself is CTC minus Employer PF and Gratuity provision. Use this calculator for an instant, accurate result for any CTC.

What is the difference between CTC and gross salary?

CTC (Cost to Company) is the total annual cost the employer bears for you — it includes Employer PF (12% of Basic), Gratuity provision (4.81% of Basic), and all salary components. Gross Salary is what appears on your payslip before employee-side deductions, but after removing employer-side costs from CTC. Your actual in-hand salary is what you receive after PF, ESI, PT, and TDS are deducted from Gross Salary.

Which tax regime gives higher in-hand salary — Old or New?

For most salaried employees earning under ₹12 lakh annually, the New Tax Regime gives higher in-hand salary because income up to ₹12 lakh is effectively tax-free (due to the ₹60,000 rebate under Section 87A). For incomes above ₹12 lakh, the Old Regime can be better if you have significant 80C investments (₹1.5 lakh), 80D premiums, and substantial HRA exemption. Use the regime toggle in this calculator to compare both.

What percentage of CTC is Basic salary in India?

Basic salary in India typically ranges from 35% to 50% of CTC. Most IT companies and mid-size organisations set it at 40–50%. A higher Basic salary means higher PF contributions (which reduces take-home but increases retirement savings) and higher HRA (which can increase tax exemption under the Old Regime). The exact percentage is defined in your salary structure — check your offer letter or payslip.

Is HRA fully exempt from tax?

HRA is only partially exempt under the Old Tax Regime. The exemption is the minimum of three amounts: (1) Actual HRA received, (2) 50% of Basic salary for metro cities or 40% for non-metro, and (3) Actual rent paid minus 10% of Basic salary. In the New Tax Regime, HRA exemption is not available, but the higher standard deduction of ₹75,000 partially compensates. If you pay significant rent in a metro city, Old Regime with HRA exemption may save more tax.

How is Employee PF calculated in salary?

Employee Provident Fund is deducted at 12% of Basic + DA salary. The statutory cap for mandatory PF is based on ₹15,000 of Basic — so the maximum mandatory deduction is ₹1,800 per month. If your Basic exceeds ₹15,000, you and your employer can either contribute on actual Basic (voluntary PF) or cap it at ₹15,000. Your employer also contributes 12% of your Basic (3.67% to EPF, 8.33% to EPS pension fund).

What is Professional Tax and which states charge it?

Professional Tax is a state-level tax deducted from salary. States that levy PT include Maharashtra (up to ₹2,500/year), Karnataka (₹2,400/year for salary above ₹15,000), West Bengal, Andhra Pradesh, Telangana, Tamil Nadu, and Gujarat. States with NO Professional Tax include Delhi, Haryana, Uttar Pradesh, and Rajasthan. The maximum PT under any Indian state is ₹2,500 per year as per the Constitution.

Does the Gratuity provision reduce my take-home salary?

Yes, when an employer includes Gratuity provision in CTC, it reduces your effective take-home salary even though the money is not paid to you immediately. The Gratuity provision is 4.81% of Basic per year (= 15/26 days of Basic). It is held by the employer and paid to you only after 5 years of continuous service. Some employers show CTC with Gratuity, others without — always check whether your offered CTC is inclusive or exclusive of Gratuity.

How is TDS deducted from salary every month?

Your employer estimates your full-year taxable income at the start of the financial year based on your salary structure and investment declarations. The total annual tax is calculated on this estimate (plus 4% Health and Education Cess), then divided by 12 to get the monthly TDS amount. If you switch between Old and New Regime or miss investment declarations, your employer may adjust TDS in the remaining months of the year to ensure correct total deduction.

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CTC to In-Hand Salary Calculator — Free Online

How to Use the CTC Salary Calculator

How the CTC Salary Calculator Works — The Formula

Real-World Examples — CTC to In-Hand Salary

Frequently Asked Questions

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