Salary Calculator India — CTC to In-Hand FY 2026-27

What is CTC and How is In-Hand Salary Calculated?

CTC — Cost to Company — is the total annual amount a company spends on an employee. It includes money you receive directly, plus components like employer PF and gratuity provisioning that never reach your bank account. This gap is why an offer letter’s CTC figure is almost always higher than what actually lands in your account.

In-hand salary (also called take-home or net salary) is what remains after every statutory deduction — PF, professional tax, ESI (where applicable), and income tax. For a typical salaried employee in India, in-hand salary works out to roughly 65–80% of CTC, depending on income level, tax regime, and how the salary is structured.

CTC Components — A Complete Breakdown

The In-Hand Salary Formula

Step 1: Gross Salary = CTC − Employer PF Contribution − Gratuity Provision
Step 2: Taxable Income (New Regime) = Gross Salary − Standard Deduction (₹75,000)
Step 3: Income Tax = Apply New/Old Regime slab rates + 4% Health & Education Cess
Step 4: Monthly In-Hand = (Gross Salary − Annual Tax − Employee PF − Professional Tax) ÷ 12

FY 2026-27 Income Tax Slabs — New vs Old Regime

The new tax regime has been the default regime since FY 2023-24. Budget 2026 confirmed no change to slab rates for FY 2026-27. Complete article you can read Here

*Old regime: 5% applies ₹2.5L–5L, 20% applies ₹5L–10L, 30% above ₹10L. Plus 4% Health & Education Cess on tax in both regimes. Section 87A rebate: ₹60,000 for New Regime (taxable income ≤ ₹12L, effectively zero tax); ₹12,500 for Old Regime (taxable income ≤ ₹5L).

In-Hand Salary by CTC — Quick Reference (New Regime, FY 2026-27)

Assumes basic salary = 40% of CTC, metro city (50% HRA), no bonus, new tax regime. Your actual number will vary with your company’s salary structure — use the calculator above for your exact figure.

Worked Example — ₹15 Lakh CTC Calculation

Let’s calculate the in-hand salary for a salaried employee with ₹15 lakh CTC in a metro city, under the new tax regime.

Your live page currently shows tax of ~₹1,54,700 and in-hand of ~₹1,05,908 for this exact scenario. Recalculating with the correct marginal slab method (0% to ₹4L, 5% on ₹4-8L, 10% on ₹8-12L, 15% on the remainder up to ₹13,74,540) gives tax of ₹89,628 and in-hand of ₹1,11,326 — a ₹5,400/month difference. Please verify against your own calculator output before publishing; the numbers above match the calculator widget’s logic exactly.

When Does the Old Regime Benefit You?

The old tax regime only makes sense once your total eligible deductions (80C + 80D + HRA + home loan interest + NPS) cross roughly ₹3.75–4 lakh for incomes in the ₹15–20 lakh range. Below that, the new regime almost always wins on simplicity and lower tax.

*Old regime assumes standard deduction (₹50K) plus varying levels of 80C/80D/HRA claims. Actual results vary by individual deductions — use the calculator above with your own numbers.

PF, Gratuity & ESI — The Deductions You Don’t See on Your Slip

Three components quietly shape your take-home pay without always appearing as clear line items:

• Employee PF (12% of Basic): Capped at ₹1,800/month because EPF contributions are calculated on a maximum basic of ₹15,000/month, even if your actual basic is higher. This goes into your own EPFO account and currently earns 8.25% interest (rate confirmed for FY 2025-26).
• Employer PF (12% of Basic, capped at ₹1,800/month): This is part of your CTC but doesn’t reach you monthly. Of this ₹1,800, ₹1,250 goes to the Employee Pension Scheme (EPS) and the remaining ₹550 goes to your EPF account.
• Gratuity Provision: Roughly 4.81% of basic per year is provisioned inside your CTC. It’s paid as a lump sum only after 5 years of continuous employment, under the Payment of Gratuity Act.
• ESI (Employee State Insurance): Applies only if your gross monthly wage is ₹21,000 or below. Employee contributes 0.75% of gross wages, employer contributes 3.25%. If your CTC puts your gross above this threshold, ESI does not apply to you.

Professional Tax — Does It Apply to You?

Professional tax is a state-level tax, not a central one — some states don’t levy it at all. Where it applies, it’s capped at ₹2,500/year (usually ₹200/month, with a slightly higher amount in one month to reach the annual cap).

*Confirm with your employer’s payroll or your state’s commercial tax department for exact current rates — professional tax slabs can change and vary by income band within a state.

5 Salary Optimization Tips for Indian Employees

1. Maximize tax-exempt components: Ask HR to include meal vouchers, LTA, and phone/internet reimbursements — these reduce taxable income without reducing your CTC.
2. Re-compare regimes every appraisal cycle: Run both scenarios on this calculator whenever your salary changes — the better regime can flip year to year.
3. Employer NPS under 80CCD(2): Under the new regime, employer NPS contribution up to 14% of basic is deductible — this alone can cut taxable income by ₹70,000–₹2L a year.
4. Compare gross, not just CTC, across job offers: A higher CTC can still mean lower take-home if the bonus or benefits structure is weaker.
5. Consider Voluntary PF (VPF): Extra PF contributions earn the same 8.25% guaranteed, tax-free return — often better than a fixed deposit.

📅 Content last reviewed: July 2026, for FY 2026-27 tax rates. Figures are based on the Union Budget 2026 announcements, EPFO’s 8.25% interest rate for FY 2025-26, and standard Indian payroll structuring conventions. This tool is for planning purposes only — for your exact tax liability, consult a chartered accountant.