Quick Answer
Enter your annual CTC and, if you know it, your basic salary percentage, PF option and professional tax. The calculator removes the employer's PF and gratuity (which are part of CTC but not paid monthly), deducts your own PF, professional tax and income tax for FY 2026-27, and shows your monthly in-hand salary. Under the new regime, salaries up to about ₹12.75 lakh of taxable gross pay no income tax because of the ₹75,000 standard deduction and the ₹60,000 rebate.
What Is CTC — and Why Isn't It Your Salary?
CTC (Cost to Company) is the total amount your employer spends on you in a year. It's the big number in offer letters, but it isn't what lands in your bank account. CTC includes money that is set aside for you rather than paid monthly — the employer's Provident Fund contribution and gratuity — and your monthly pay is then reduced further by your own PF, professional tax and income tax. The result, your in-hand or take-home salary, is often 15–30% lower than CTC ÷ 12.
This CTC to in-hand salary calculator (CTC से इन-हैंड सैलरी) does the full calculation for FY 2026-27, under both the new and the old income-tax regimes, so you can compare job offers, plan your budget and choose a regime before declaring it to your employer.
How to Use It
- Enter your annual CTC — the fixed part from your offer letter.
- Set your basic salary as a percentage of CTC (40% is a common default; check your offer letter).
- Choose the PF option: 12% of basic, 12% of the ₹15,000 statutory wage ceiling, or no PF.
- Say whether gratuity is included in your CTC and enter your state's professional tax.
- Pick a regime. For the old regime, enter HRA exemption, extra 80C, 80D and NPS.
- Read the result: monthly in-hand salary, yearly figures, a full breakdown and a comparison of both regimes.
The Formula, Step by Step
| Step | What happens |
|---|---|
| 1. Basic salary | CTC × basic % (for example 40%) |
| 2. Employer PF | 12% of basic (or of ₹15,000 × 12) — part of CTC, credited to your PF account |
| 3. Gratuity | 4.81% of basic if your CTC includes it — paid when you leave after eligibility |
| 4. Gross salary | CTC − employer PF − gratuity |
| 5. Taxable income | Gross − standard deduction (and, in the old regime, other deductions) |
| 6. Income tax | Slab tax − rebate, + surcharge (high incomes), + 4% cess |
| 7. In-hand salary | Gross − employee PF − professional tax − income tax |
The 4.81% gratuity figure comes from the gratuity formula: 15 days' pay for each year of service on a 26-day month, i.e. 15 ÷ 26 ÷ 12 ≈ 4.81% of annual basic.
Income Tax Rules Used (FY 2026-27)
New regime (default): standard deduction ₹75,000; slabs — nil up to ₹4 lakh, 5% for ₹4–8 lakh, 10% for ₹8–12 lakh, 15% for ₹12–16 lakh, 20% for ₹16–20 lakh, 25% for ₹20–24 lakh and 30% above ₹24 lakh. A section 87A rebate of up to ₹60,000 means no tax on taxable income up to ₹12 lakh, with marginal relief just above that so your tax never exceeds the income above ₹12 lakh. Most deductions (80C, HRA, 80D) are not available, and professional tax is not deductible. Budget 2026 kept these slabs unchanged for FY 2026-27.
Old regime: standard deduction ₹50,000; deductions for professional tax, HRA exemption, 80C (your PF counts towards the ₹1.5 lakh limit), 80D health insurance and an extra ₹50,000 for NPS under 80CCD(1B); slabs — nil up to ₹2.5 lakh (₹3 lakh for ages 60–79, ₹5 lakh for 80+), 5% to ₹5 lakh, 20% to ₹10 lakh, 30% above; rebate of up to ₹12,500 when taxable income is ₹5 lakh or less.
Both regimes: surcharge for taxable income above ₹50 lakh (10%, rising in steps; capped at 25% in the new regime), with marginal relief, plus 4% health and education cess on tax and surcharge.
Worked Examples
All examples assume basic = 40% of CTC, PF at 12% of full basic, gratuity included and professional tax of ₹2,400 a year:
| Annual CTC | Gross salary | Tax — new regime | In-hand / month (new) | In-hand / month (old, no deductions) |
|---|---|---|---|---|
| ₹12 lakh | ₹11,19,312 | ₹0 | ₹88,276 | ₹78,284 |
| ₹18 lakh | ₹16,78,968 | ₹1,25,625 | ₹1,22,045 | ₹1,08,720 |
| ₹25 lakh | ₹23,31,900 | ₹2,74,794 | ₹1,61,226 | ₹1,44,228 |
Even with substantial old-regime deductions, the new regime often wins. For an ₹18 lakh CTC with ₹1.8 lakh HRA exemption, full 80C (₹1.5 lakh including PF), ₹25,000 under 80D and ₹50,000 NPS, the old regime gives about ₹1,17,003 per month — still less than the new regime's ₹1,22,045. Your situation may differ, which is why the calculator always shows both.
Understanding PF Options
- 12% of basic: the most common setup in large companies. You and your employer each contribute 12% of basic; both amounts go to your EPF/EPS account.
- 12% of the ₹15,000 ceiling: some employers restrict PF to the statutory wage ceiling — ₹1,800 a month each — which increases your in-hand pay but reduces retirement savings.
- No PF: for organisations not covered by EPF or employees who are exempt.
Remember that employer PF is not "lost": it's your money, earning interest for retirement, home purchase or emergencies (with withdrawal rules). Track it with our EPF Calculator.
Professional Tax by State
Professional tax is a small state tax on employment, deducted from salary by the employer. The maximum allowed is ₹2,500 a year. Many states charge ₹200 a month (₹2,400 a year), Maharashtra's annual total for higher salaries is ₹2,500, and several states — including Delhi, Haryana, Uttar Pradesh and Rajasthan — don't levy it on salaries at all. Enter 0 if your state doesn't charge it, or the amount shown on your payslip.
Comparing Two Job Offers
Two offers with the same CTC can pay very different monthly salaries. One company may set basic at 50% and include gratuity; another may keep basic at 35% and pay a larger special allowance. A higher basic means more PF and gratuity (long-term savings) but less cash each month. Run each offer through the calculator with its actual basic percentage, PF rule and gratuity setting, and compare both the monthly in-hand figure and the savings that build up in PF. Also ask whether part of the CTC is variable pay, joining bonus or ESOPs — those don't arrive monthly.
What the Calculator Doesn't Include
- Variable pay and bonuses — taxed when paid; enter only fixed CTC for a monthly figure.
- Reimbursements and perks such as meal cards, fuel or phone allowances, which have their own tax treatment.
- Employer NPS (80CCD(2)), home-loan interest and other special deductions.
- ESI for salaries below its threshold, and company-specific deductions such as insurance premiums.
- Non-resident taxation and income other than salary (interest, rent, capital gains).
For a detailed tax computation including other income, use our Income Tax Calculator. For HRA, see the HRA Calculator.
Tips to Increase Take-home Pay
- Choose the right regime at the start of the year using the comparison.
- Use the old regime only if your deductions are large — rent, a home loan, full 80C and 80D.
- Ask about flexible benefit plans that convert taxable allowances into tax-efficient reimbursements (in the old regime).
- Plan bonuses: they can push income into a higher slab for that year.
- Negotiate on fixed pay, not just CTC, when changing jobs — our Salary Hike Calculator helps you compare.
Private and Free
Your salary details never leave your device: every calculation runs in your browser, with nothing sent to a server and no sign-up. The link updates with your CTC and structure, so you can bookmark or share a scenario if you want to.
Quick Glossary
- CTC: cost to company — everything the employer spends on you in a year.
- Gross salary: CTC minus employer PF and gratuity.
- In-hand salary: what is credited to your bank account after all deductions.
- Section 87A rebate: a tax rebate that removes tax for incomes below a limit.
- Marginal relief: a rule that stops tax rising by more than the income above a threshold.
Why Use This Calculator?
It uses the FY 2026-27 rules for both regimes, models real salary structures (basic %, PF ceiling, gratuity, professional tax), explains every rupee in a breakdown table and keeps your data private. Related: Gratuity Calculator and Home Loan Eligibility.
CTC to In-hand Salary Calculator — Key Facts
| Tax year | FY 2026-27 (AY 2027-28) |
|---|---|
| New regime std. deduction | ₹75,000 |
| New regime zero tax | Taxable income up to ₹12 lakh |
| Employer PF | 12% of basic (part of CTC) |
| Gratuity | 4.81% of basic (if in CTC) |
| Cess | 4% on tax + surcharge |
Frequently Asked Questions
How is in-hand salary calculated from CTC?
CTC minus the employer's PF contribution and gratuity gives gross salary. From gross salary, your own PF contribution, professional tax and income tax are deducted. What remains, divided by 12, is your monthly in-hand salary.
Why is my in-hand salary much lower than CTC ÷ 12?
CTC includes money you don't receive every month — employer PF (saved in your PF account) and gratuity (paid when you leave after eligibility) — plus deductions such as your own PF, professional tax and income tax.
How much tax will I pay on ₹12 lakh CTC under the new regime?
With a typical structure (40% basic, PF on full basic, gratuity in CTC), gross salary is about ₹11.2 lakh and taxable income after the ₹75,000 standard deduction is below ₹12 lakh, so income tax is nil thanks to the section 87A rebate.
Up to what salary is there no tax in FY 2026-27?
Under the new regime, taxable income up to ₹12 lakh has no tax because of the ₹60,000 rebate. With the ₹75,000 standard deduction, that is gross salary of up to ₹12.75 lakh for salaried employees.
What is the employer PF contribution?
Usually 12% of basic salary (plus dearness allowance), paid by the employer into your EPF/EPS. Many companies include it in CTC. Some calculate it only on the statutory wage ceiling of ₹15,000 per month.
Is gratuity part of my monthly salary?
No. Gratuity is commonly shown in CTC at 4.81% of basic but is paid as a lump sum when you leave after at least five years of continuous service (with some exceptions).
Which tax regime should I choose?
The calculator compares both. The new regime is the default and usually better unless you have large deductions such as HRA, a home loan, full 80C and 80D. Check the comparison line below the result.
Is professional tax deducted in the new regime?
Your employer still deducts professional tax from salary, but it is not allowed as a deduction from taxable income under the new regime. It is deductible under the old regime.
What basic salary percentage should I use?
Many companies set basic at 40–50% of CTC. Check your offer letter; a higher basic increases PF and gratuity and reduces monthly in-hand cash.
Does the calculator include bonus and variable pay?
Enter only the fixed part of CTC for monthly in-hand. Performance bonus is usually paid once or twice a year and taxed in that month.
Is this calculation exact?
It is a close estimate. Your actual salary slip depends on your company's allowances, reimbursements, NPS, meal cards and the investment declarations you submit.
Is it free?
Yes, completely free with no sign-up. Calculations run in your browser.
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