Loans, investing & tax
How to Calculate In-Hand Salary from CTC (with Examples)
Updated 25 September 2026 · 5 min read
Your CTC (cost to company) is everything your employer spends on you in a year. Your in-hand salary is what reaches your bank account. The gap comes from four things:
- Employer's PF — 12% of basic, part of CTC but paid into your PF account, not to you.
- Your PF — another 12% of basic, deducted from your gross salary.
- Professional tax — a state tax, up to ₹2,500 a year (e.g. Maharashtra, Karnataka).
- Income tax (TDS) — depends on your regime and deductions.
Example: ₹12 lakh CTC
With basic at 50% of CTC, HRA at 50% of basic and PF on the full basic:
| Basic | ₹6,00,000 |
| HRA | ₹3,00,000 |
| Special allowance | ₹2,28,000 |
| Employer PF (part of CTC) | ₹72,000 |
| Gross salary | ₹11,28,000 |
| Less: your PF | ₹72,000 |
| Less: professional tax | ₹2,500 |
| Less: income tax (new regime) | ₹0 |
| In-hand | ₹10,53,500 a year ≈ ₹87,792 a month |
Income tax is zero: after the ₹75,000 standard deduction, taxable income is ₹10,53,000 — under the ₹12 lakh limit where the new regime's rebate applies.
Example: ₹18 lakh CTC
Same structure: gross salary ₹16,92,000, your PF ₹1,08,000, professional tax ₹2,500 and income tax of about ₹1,28,340 in the new regime. In-hand: ≈ ₹1,21,097 a month.
Work out your in-hand salary from CTCConvert CTC to monthly in-hand salary with PF, ESI, professional tax and income tax breakdown.Ways to take home more
- PF on the ₹15,000 wage ceiling: some employers cap PF at ₹1,800 a month, raising in-hand pay (but saving less for retirement).
- Pick the right tax regime. See old vs new regime compared.
- Check if gratuity is inside your CTC. If it is, that part is only paid when you leave — estimate it with the gratuity calculator.
Frequently asked questions
What is the in-hand salary for ₹12 lakh CTC?
About ₹87,792 a month in the new tax regime, assuming basic pay is 50% of CTC, 12% PF on full basic from both sides, and professional tax of ₹2,500 a year (Maharashtra). Income tax is zero because taxable income stays under ₹12 lakh.
Why is my in-hand salary so much lower than CTC ÷ 12?
CTC includes your employer's PF contribution (and sometimes gratuity and insurance), which you never receive monthly. Your own PF, professional tax and income tax are then deducted from the gross salary.