How CTC becomes in-hand salary
CTC (Cost to Company) is everything your employer spends on you — including the employer's PF contribution and any bonus — so your bank credit is always lower. This calculator follows the standard structure: basic is a chosen percentage of CTC (50% is most common), both you and your employer contribute 12% of basic to EPF, professional tax is deducted monthly in most states, and income tax is computed under the default new regime for FY 2026-27 with its ₹75,000 standard deduction and rebate up to ₹12 lakh taxable income.
Worked example: ₹12 lakh CTC
CTC ₹12,00,000 with no bonus, basic at 50% (₹6,00,000). Employer PF of ₹72,000 sits inside CTC, so gross pay is ₹11,28,000. Employee PF deducts another ₹72,000 and professional tax ₹2,400. Income tax: taxable pay ₹11,28,000 − ₹75,000 standard deduction = ₹10,53,000 → slab tax ₹45,300, fully covered by the ₹60,000 rebate → zero tax. In-hand ≈ ₹10,53,600/year ≈ ₹87,800/month — about 88% of CTC, which is why "₹1 lakh per month" offers rarely credit ₹1 lakh.
Frequently asked questions
Why is my in-hand so much lower than CTC ÷ 12?
Because CTC includes money you never see monthly: the employer's PF contribution, gratuity provisions, insurance premiums and annual bonus. Deductions (your PF, professional tax, TDS) reduce it further. Taking home 80–90% of fixed CTC is normal.
Which tax regime does this calculator use?
The new regime — it is the default for FY 2026-27 and best for most salaried people without large deductions. If you claim big 80C/HRA/home-loan deductions, run the income tax calculator to compare both regimes before assuming.
Is PF calculated on basic or on CTC?
On basic salary (plus DA where applicable) at 12% each from you and your employer. Some employers cap the PF wage at ₹15,000/month (contribution ₹1,800); this calculator uses the full-basic convention, so your actual PF may be slightly lower.
Why is bonus excluded from monthly in-hand?
Bonus is usually paid annually or quarterly, not monthly — including it would inflate your apparent monthly salary. It is still included in your taxable income, so the tax figure accounts for it.
Does professional tax apply everywhere?
No. It is a state tax — around ₹200/month in Maharashtra, Karnataka, West Bengal and others, and absent in states like Delhi and Haryana. Set the field to your state's value or zero.
Sources & methodology
Formulas on this page are shown in full above and verified against official sources.
Results are estimates for education and planning — not financial, tax or investment advice. Verify important decisions with a qualified professional.