How to calculate CTC to in-hand salary
Start with the employer's written salary breakup. CTC is the employer's annual cost, gross salary is cash earnings before employee deductions, and in-hand salary is the cash left after those deductions. Dividing the whole CTC by twelve usually mixes cash pay with employer benefits.
1. Annual CTCSeparate employer contributions, benefits, provisions and variable pay.
2. Gross cash salaryIdentify the amount actually paid as salary, before employee deductions.
3. Monthly in-handSubtract employee PF, payroll tax and other actual deductions from monthly gross.
₹12 lakh CTC: a complete worked example
With the default current-year inputs, basic pay is 40% of CTC, HRA is 50% of basic, employer and employee PF are each 12% of basic, and professional tax is ₹200 monthly. CTC contains only gross salary and employer PF. Other non-cash CTC provisions are set to zero in this example. Bonus timing, taxable perquisites and stock awards are not modeled.
The zero income-tax result belongs to this example's ordinary salary, resident-under-60 eligibility and stated tax year. Taxable salary after the ₹75,000 new-regime standard deduction is ₹10,67,400, within the modeled rebate limit. Other income or special-rate income can change the tax result. ₹90,200 is not a promised bank credit for every ₹12 lakh offer.
6, 9, 12, 15 and 18 LPA salary examples
Same simplified structure and new-regime tax-year assumptions as above; monthly figures rounded to rupees. No PF cap is applied. Use these to understand the calculation, then replace the assumptions with your offer details.
Why two offers with the same CTC can pay differently
One offer may include a performance bonus paid annually, while another pays more fixed cash each month. Insurance and gratuity provisions may also sit inside CTC. Enter supported non-cash provisions in the new employer-cost field, and use custom PF amounts when your payslip differs. Bonus timing and taxable perquisites still need a separate payroll calculation. Ask HR for the fixed monthly gross, payout schedule, employer benefits and employee deduction basis before comparing offers.
Employer PF has already been separated from CTC to obtain gross salary; do not deduct it again from gross cash salary as if it were an employee deduction. Employee PF and employer EPF/pension allocations are different entries. Read our EPF passbook column guide to understand the distinction.
Use the current year or keep a historical estimate
The year selector defaults to Tax Year 2026-27, covering 1 April 2026 to 31 March 2027. The previous option is FY 2025-26 / AY 2026-27. Similar ordinary-salary slab rates do not mean that every exemption rule is identical.
The current-year salary deductions and ordinary-income rebate are checked against sections 19, 156 and 202 of the Income-tax Act, 2025 as amended by Finance Act, 2026. New-regime standard deduction is up to ₹75,000 and old-regime deduction up to ₹50,000. Rebate eligibility assumes a resident individual and ordinary slab-rate salary; special-rate income is excluded.
HRA in Bengaluru, Hyderabad, Pune and Ahmedabad
For the current-year old-regime illustration, these four cities use the 50% salary ceiling alongside Mumbai, Delhi, Chennai and Kolkata. In the previous-year option, the additional four use 40%. The estimate takes the lowest of HRA received, eligible rent minus 10% of modeled basic, and the applicable city ceiling. Official notified Income-tax Rules, 2026: rule 279.
The model assumes one location and constant monthly rent for the whole year, with no dearness allowance. A change of rent, city or employment period needs a period-specific calculation. HRA exemption is not deducted in the new-regime estimate.
What to check before comparing two job offers
- Separate fixed monthly cash from annual variable pay and employer provisions.
- Check whether employer PF is already included in CTC. Enter employee and employer amounts separately; do not subtract employer PF twice.
- Use actual annual professional tax rather than assuming every state charges the same amount.
- Compare both regime estimates with the same inputs, then account for additional eligible claims and other income outside this model.
- Download the CSV to retain the assumptions alongside the figures. It is an estimate worksheet, not an employer-issued payslip.
For example, keeping ₹12 lakh CTC and the default 40% basic, but using ₹1,800 monthly employee/employer PF, ₹24,000 other non-cash provisions and zero professional tax, gives modeled gross cash of ₹11,54,400 and new-regime take-home of ₹94,400 per month. This differs from the ₹90,200 default because the inputs differ, not because the tool promises more salary.
Taxable income, annual tax and in-hand salary are different figures. The ordinary-salary ₹12 lakh rebate threshold concerns modeled taxable income, not every employer's headline CTC. Tax is spread over twelve months here; actual TDS may change with joining dates, declarations, other income and payroll adjustments.
Use the official Income Tax Department calculator for a wider tax computation. For the previous year, refer to official AY 2026-27 guidance.
Read your EPF passbook columns · Budget from your actual take-home pay · Previous-year income tax illustration
Calculator and source references reviewed 11 October 2026. Educational model for ordinary salary; actual eligibility, statutory wages and payroll can differ.
Salary estimate questions
Model and content reviewed 11 October 2026. Results depend on your inputs.
Why is CTC different from take-home salary? +
CTC may include employer contributions, benefits, variable pay and provisions that are not paid monthly as cash. This model separates employer PF and entered non-cash provisions from CTC, then deducts employee PF, professional tax and modeled tax. Bonus timing and taxable perquisites need separate checks.
Which tax year is used? +
Choose current Tax Year 2026-27 or previous FY 2025-26 / AY 2026-27. Both estimates assume a resident individual under 60. New-regime standard deduction is up to ₹75,000; old-regime deduction is up to ₹50,000. Other income, special-rate gains and individual exceptions are excluded.
Are PF and professional tax exact? +
Use the actual monthly PF option and your annual professional tax amount when known. The default 12%-of-basic and ₹2,400-per-year inputs are illustrations, not a determination of statutory membership, wage rules or applicable caps.
Can I improve take-home by lowering basic salary? +
Do not assume that relabeling pay reduces lawful statutory contributions. Current wage rules and payroll obligations need to be assessed. Compare actual benefits, deductions and eligible tax claims rather than changing salary components solely from this illustration.
Income Tax Department: AY 2026-27 individual guidance
Scope: resident individual under 60; ordinary salary only. Choose the correct tax year. Default PF and professional tax are illustrative; replace them with actual payroll amounts. Old-regime comparison includes eligible modeled employee PF, HRA and professional tax only. Additional deductions, other income, taxable perquisites, variable bonuses, part-year employment and stock awards are excluded. Includes modeled rebate, marginal relief, surcharge and 4% cess. Figures are estimates; verify with official tax tools and your payroll.