CTC to In-hand Salary: How to Calculate Your Take-home Pay
In short: in-hand salary = CTC − employer PF − gratuity provision − employee PF − ESI (if eligible) − professional tax − income tax. Under the new regime for FY 2026-27, salary income up to ₹12.75 lakh (after the ₹75,000 standard deduction) pays no tax.
Hinglish me: CTC me se employer PF, gratuity, apna PF, professional tax aur income tax ghatao, jo bache wahi in-hand hai.
What sits inside a CTC
CTC (cost to company) is everything the employer spends on you in a year, including money you never see in your bank account every month:
- Employer PF: 12% of PF wages. With the ceiling at ₹25,000 from 17 September 2026, many employers contribute ₹3,000 a month (12% of ₹25,000), or 12% of full basic if their policy says so.
- Gratuity provision: usually 4.81% of basic (that is 15/26 ÷ 12). You get it only when you leave after the qualifying period.
- Insurance, meal cards, variable pay: variable pay is paid only if targets are met, so leave it out of a monthly in-hand estimate.
What is deducted from your gross salary
- Employee PF: 12% of PF wages, the same base as the employer share.
- ESI: 0.75% of gross wages, only if gross wages are ₹21,000 a month or less. See the ESI calculator.
- Professional tax: set by your state, capped at ₹2,500 a year. Maharashtra and Karnataka charge ₹200 a month (₹300 in February). Delhi, UP, Haryana and Rajasthan have no professional tax, and Odisha abolished it from 1 April 2026.
- Income tax (TDS): based on the regime you choose.
Income tax for FY 2026-27 (new regime)
The Income-tax Act, 2025 replaced the 1961 Act from 1 April 2026, but Budget 2026 kept the slabs the same:
| Taxable income | Rate |
|---|---|
| Up to ₹4 lakh | Nil |
| ₹4 to 8 lakh | 5% |
| ₹8 to 12 lakh | 10% |
| ₹12 to 16 lakh | 15% |
| ₹16 to 20 lakh | 20% |
| ₹20 to 24 lakh | 25% |
| Above ₹24 lakh | 30% |
Salaried people get a ₹75,000 standard deduction, and a rebate makes taxable income up to ₹12 lakh tax-free. Add 4% health and education cess on the tax. Professional tax cannot be deducted in the new regime. Under the old regime the standard deduction is ₹50,000 and the slabs are 5%, 20% and 30%.
Example 1: CTC ₹9 lakh
| Item | Per year |
|---|---|
| CTC | ₹9,00,000 |
| Basic (50% of CTC) | ₹4,50,000 |
| Less: employer PF (₹3,000 × 12) | ₹36,000 |
| Less: gratuity provision (4.81% of basic) | ₹21,645 |
| Gross salary | ₹8,42,355 |
| Less: employee PF | ₹36,000 |
| Less: professional tax (Maharashtra) | ₹2,500 |
| Taxable income (₹8,42,355 − ₹75,000) | ₹7,67,355, so tax is nil after rebate |
| In-hand | ₹8,03,855 (about ₹66,988 a month) |
Example 2: CTC ₹18 lakh
| Item | Per year |
|---|---|
| CTC | ₹18,00,000 |
| Basic (50% of CTC) | ₹9,00,000 |
| Less: employer PF (on ₹25,000 ceiling) | ₹36,000 |
| Less: gratuity provision | ₹43,290 |
| Gross salary | ₹17,20,710 |
| Taxable income (after ₹75,000) | ₹16,45,710 |
| Tax: 5% of 4L + 10% of 4L + 15% of 4L + 20% of ₹45,710 | ₹1,29,142 |
| Plus 4% cess | ₹1,34,308 total |
| Less: employee PF and professional tax | ₹38,500 |
| In-hand | ₹15,47,902 (about ₹1,28,992 a month) |
If your employer contributes PF on the full basic instead of the ceiling, both PF lines go up and in-hand comes down, but your PF savings grow by the same amount.
Quick checklist before you accept an offer
- Ask whether PF is on the ₹25,000 ceiling or on full basic.
- Ask how much of the CTC is variable or a one-time bonus.
- Check whether gratuity and insurance are included in the CTC figure.
- Check your state's professional tax.
- Compare the old and new tax regimes if you have big deductions such as a home loan.
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This guide is for general information and planning only, based on rules as reported up to 9 November 2026. Rules change, so confirm with the official source, your employer or institution, or a qualified adviser before you act on it.
Frequently asked questions
How do I calculate in-hand salary from CTC?
Subtract employer PF and the gratuity provision from CTC to get gross salary. Then subtract employee PF, ESI if eligible, professional tax and income tax. What is left is your in-hand salary.
Is salary up to ₹12 lakh tax-free in FY 2026-27?
Yes, under the new regime taxable income up to ₹12 lakh gets a full rebate. With the ₹75,000 standard deduction, salary up to ₹12.75 lakh pays no income tax.
How much PF is deducted from salary?
The employee pays 12% of PF wages. Many employers apply it on the ₹25,000 ceiling (₹3,000 a month) and some on full basic pay.
Is gratuity part of CTC?
Many employers include a gratuity provision of about 4.81% of basic pay in CTC. You receive it only when you leave after completing the qualifying service.