CTC to In-Hand Salary Calculator — How It Works (FY 2025-26)
Your CTC (Cost to Company) is not what lands in your bank account. Between your CTC and your take-home are three mandatory deductions — Employee Provident Fund (EPF), gratuity provision, and income tax. This calculator breaks all three down with exact FY 2025-26 numbers so you know exactly what you'll earn.
What Gets Deducted From Your CTC?
The three primary deductions from a salaried employee's CTC are:
- Employee PF: 12% of your basic salary, capped at ₹1,800/month (₹21,600/year) if basic exceeds ₹15,000/month.
- Gratuity: Estimated at (Basic ÷ 26) × 15 ÷ 12 per month. It's only paid out after 5 years of continuous service but is deducted from CTC regardless.
- Income Tax: Based on your taxable income and the regime you choose. Under the New Regime (default from FY 2024-25), the standard deduction is ₹75,000. Under Old Regime, it's ₹50,000 plus HRA exemption.
Professional tax (₹200/month in most states) is an additional deduction not included here as it varies by state.
New Regime vs Old Regime — Which Gives More In-Hand?
For most salaried people in FY 2025-26, the New Regime gives higher in-hand salary — especially at CTC levels below ₹15 lakh — because the tax slabs are lower and the 87A rebate covers taxable income up to ₹12 lakh. The Old Regime only wins if you have substantial HRA exemptions, 80C investments, and home loan interest deductions that collectively exceed the tax benefit of the New Regime's lower slabs.
| Income Range | New Regime Rate | Old Regime Rate |
|---|---|---|
| ₹0 – ₹2.5 Lakh | 0% | 0% |
| ₹2.5L – ₹4 Lakh | 0% (new slab) | 5% |
| ₹4L – ₹5L | 5% | 5% |
| ₹5L – ₹8L | 5% | 20% |
| ₹8L – ₹10L | 10% | 20% |
| ₹10L – ₹12L | 10% | 30% |
| Above ₹12L | 15%–30% | 30% |
Use our Income Tax Calculator for a detailed regime comparison, or our HRA Exemption Calculator to check how much rent exemption you qualify for before deciding.
Understanding Your Salary Structure
A typical private sector salary has: Basic (40–50% of CTC) + HRA (40–50% of Basic) + Special Allowance (the balance). The Special Allowance is fully taxable — it's simply the CTC leftover after Basic, HRA, PF and gratuity. Keeping your basic lower means lower PF deduction and higher take-home, but also a smaller gratuity and PF corpus over time.
Frequently Asked Questions
Everything you need to know about salary structure and take-home pay in India.
In-hand salary = CTC minus Employee PF (12% of basic, capped at ₹1,800/month), minus Gratuity provision (Basic ÷ 26 × 15 ÷ 12), minus Income Tax. Professional tax (usually ₹200/month) is an additional state-specific deduction not included here. Under Old Regime, HRA exemption reduces your taxable income — which lowers the tax deduction and increases in-hand.
Employee PF = 12% of basic salary, capped at ₹21,600/year (₹1,800/month) if basic exceeds ₹15,000/month. The employer contributes a matching 12%, split between EPF and EPS — but this is part of your CTC, not an additional benefit. Both contributions earn 8.25% interest (FY 2025-26 rate) and are tax-free on withdrawal after 5 years.
No. HRA exemption under Section 10(13A) is only available under the Old Tax Regime. Under New Regime, the full HRA received is taxable. This is one of the main reasons high-rent metro employees often benefit from Old Regime — especially if they pay ₹1.5L+ in rent per year. Use our HRA Calculator to estimate your exact exemption.
Basic salary is typically 40–50% of CTC. Lower basic = lower PF deduction and higher take-home, but lower HRA exemption and gratuity payout. Higher basic = better retirement corpus and gratuity. Most IT companies set basic at 40%. Government and PSU roles often set it at 50–60%. You can sometimes negotiate the split with your employer at offer stage.
Gratuity is usually included in CTC by private employers. The annual provision is (Basic ÷ 26) × 15 ÷ 12 per month. It is only paid out after 5 years of continuous employment. If you leave before 5 years, you don't receive it — but it was still deducted from your CTC each month. Always check your offer letter to see if gratuity is shown separately or within CTC.