Salary Calculator India: CTC to In-Hand Breakdown (2026)
📅 July 2026⏱ 9 min read✍️ ToolLoom Editorial
Your offer letter says ₹12 lakh CTC. Your bank account sees ₹78,000 a month. The difference isn't a mystery — it's PF, professional tax, income tax TDS, and the way Indian payroll structures allowances. This guide explains every line of your salary slip.
Basic + HRA + Special Allowance + LTA + all other allowances
In-Hand / Take-Home
Net credited to bank account
Gross salary minus employee PF, professional tax, and income tax TDS
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Rule of thumb: In-hand salary is typically 70–80% of CTC for salaried employees in the ₹6–20 lakh range, after PF, professional tax, and income tax deductions.
Components of a Typical Indian Salary
Component
Typical % of Basic
Tax Treatment
Basic Salary
40–50% of CTC
Fully taxable
HRA
40–50% of Basic
Partially exempt (see HRA section)
Special Allowance
Balancing figure
Fully taxable
LTA (Leave Travel Allowance)
5–10% of Basic
Exempt up to actual travel costs (2 journeys in 4 years)
Food Coupons / Meal Card
₹2,200/month typical
Exempt up to ₹50/meal × 2 meals × working days
Mobile & Internet Reimbursement
₹1,000–₹2,000/month
Exempt with bills
Employer PF Contribution
12% of Basic (up to ₹15,000)
Part of CTC; not in-hand
Gratuity (provision)
4.81% of Basic
Part of CTC; paid on exit after 5 years
Mandatory Deductions From Salary
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Employee PF — 12% of Basic
Goes directly to your EPF account. Builds retirement corpus. Cannot be avoided for employees earning below ₹15,000 Basic; optional above.
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Professional Tax — up to ₹200/mo
State-level tax. Maharashtra, Karnataka, West Bengal levy it. Delhi, Haryana, Rajasthan do not. Max ₹2,500/year.
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Income Tax TDS
Your employer estimates your annual tax liability, divides by 12, and deducts monthly. Adjustments happen in February/March.
In-Hand Salary Formula
In-Hand = Gross Salary − Employee PF (12% of Basic) − Professional Tax − Income Tax TDS
HRA — How It's Calculated and Taxed
HRA is the most misunderstood salary component. The tax-exempt portion is the lowest of three amounts:
Actual HRA received from employer
50% of Basic + DA (metro cities: Delhi, Mumbai, Chennai, Kolkata) or 40% (all other cities)
Actual rent paid minus 10% of Basic + DA
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If you live in your own home or with parents and pay no rent, the entire HRA received is taxable. Use ToolLoom's HRA Calculator to find your exact exempt amount, or consider paying rent to parents — a legitimate tax strategy.
Worked Example — ₹12 Lakh CTC Breakdown
Component
Annual (₹)
Monthly (₹)
Basic Salary
4,80,000
40,000
HRA (50% of Basic, Mumbai)
2,40,000
20,000
Special Allowance
2,96,280
24,690
LTA
40,000
3,333
Gross Salary
10,56,280
88,023
Employer PF (3.67% of ₹40K)
17,616
1,468
Gratuity provision (4.81%)
23,088
1,924
Group Health Insurance
12,000
1,000
Total CTC
12,08,984
~₹12L
Deduction
Monthly (₹)
Employee PF (12% of ₹40,000)
4,800
Professional Tax (Maharashtra)
200
Income Tax TDS (new regime, approx)
3,500
Total Deductions
8,500
In-Hand Monthly
≈ ₹79,523
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This person's ₹12L CTC results in approximately ₹79,500 in-hand per month — about 79% of gross salary and 66% of CTC. The gap between CTC and in-hand is not money lost — PF builds your retirement corpus and TDS goes toward your tax liability.
What Your Salary Slip Must Contain
Employee name, ID, designation and department
Month and year of the pay period
Basic salary, HRA, and all allowances (individually listed)
Total gross earnings
Each deduction line-by-line: PF, professional tax, TDS, any loan deductions
Total deductions
Net pay / in-hand salary
Employer's PF contribution amount (for your reference)
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Keep all salary slips — they are required for home loan applications, rental agreements, visa applications, and as supporting documents when filing your income tax return.
How to Increase Your In-Hand Salary Legally
1
Restructure your salary toward tax-exempt allowances
Ask HR to increase meal coupons, mobile reimbursement, LTA, and NPS employer contribution — these reduce taxable income without reducing CTC.
2
Claim HRA by paying rent
If you're renting, submit rent receipts to HR. If you live with parents, pay them rent via bank transfer — they declare it as rental income in their ITR, and you claim HRA exemption.
3
Submit investment proofs for Section 80C, 80D
Tell HR about your PPF contributions, life insurance premiums, health insurance, and other 80C investments early in the year — this reduces TDS deducted monthly.
4
Choose the right tax regime
Use ToolLoom's Income Tax Calculator to compare old vs new regime. For many employees with multiple deductions, the old regime gives a higher in-hand salary.
💼 Calculate Your Exact In-Hand Salary — Free
Enter your CTC or Basic salary to see your complete take-home breakdown including PF, professional tax, and income tax.
CTC (Cost to Company) is the total annual amount a company spends on an employee, including your salary, employer's PF contribution, gratuity provision, health insurance, and other benefits. In-hand or take-home salary is what actually gets credited to your bank account after deducting employee PF, professional tax, income tax TDS, and any other payroll deductions.
The employee contributes 12% of Basic salary + DA toward EPF. The employer also contributes 12% — of which 8.33% goes to the EPS pension scheme (capped at the ₹15,000 wage ceiling) and 3.67% to EPF. So the PF deduction from your salary is 12% of your Basic pay, and an equal amount is added by your employer.
Professional tax is a state-level tax deducted from salary monthly or annually. It varies by state — Maharashtra charges up to ₹200/month (₹2,400/year), Karnataka charges ₹200/month, and some states like Delhi, Haryana, and Rajasthan do not levy professional tax at all. The maximum professional tax is capped at ₹2,500/year across all states.
A salary slip (pay slip) is a monthly document from your employer showing earnings and deductions. It must include: employee name and ID, month/year, Basic salary, HRA, special allowance and other allowances, total gross salary, EPF deduction, professional tax, TDS deduction, total deductions, and net pay (in-hand amount). It serves as proof of income for loans, rental agreements, and visa applications.
HRA (House Rent Allowance) is typically 40–50% of Basic salary (50% in metro cities, 40% in non-metros). The amount of HRA that is tax-exempt is the lowest of: actual HRA received, 50% (metro) or 40% (non-metro) of Basic + DA, or actual rent paid minus 10% of Basic + DA. Any HRA received above the exempt amount is added to taxable income.
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