CTC to
In-Hand Salary
Calculator 2025

In-hand = Gross Salary − Employee Deductions.

Step 1 — Gross from CTC: CTC = Gross Salary + Employer PF (13% of Basic) + Employer ESI (3.25% of gross if applicable) + Gratuity provision (4.81% of Basic). So Gross ≈ CTC × 0.87–0.90 depending on structure.

Step 2 — Gross components: Basic (typically 40–50% of gross) + HRA (40–50% of Basic) + Special Allowance + LTA + Other allowances.

Step 3 — Deductions: Employee PF (12% of Basic, capped ₹1,800), Employee ESI (0.75% of gross, if ≤₹21,000), Professional Tax (state-wise), TDS (based on annual income and tax regime).

Step 4 — In-hand = Gross − PF − ESI − PT − TDS.

The new regime is the default from FY 2024-25 and is beneficial for most employees earning up to ₹12 lakh (zero tax after 87A rebate). The old regime is better if you have large deductions — home loan interest (Section 24b), HRA exemption in expensive cities, 80C investments of ₹1.5L, NPS ₹50,000, health insurance 80D, etc.

Quick rule: If your total deductions (80C + HRA + 80D + NPS + home loan + others) exceed ₹4–5 lakh per year, the old regime likely saves more tax. Below that, new regime is simpler and often cheaper.

From FY 2025-26, the new regime gives ₹75,000 standard deduction and a zero-tax slab up to ₹12,00,000 income (before surcharge). Use TAXAJ's both-regime comparison above to see your actual saving.

A new employee joining with Basic+DA above ₹15,000 can opt out of PF at joining by submitting a declaration. However, once a member (if Basic was below ₹15,000 at any point), you cannot opt out — contributions continue even if salary increases. The employer can choose to limit PF contributions to the ₹15,000 ceiling for all employees (most companies do this to reduce CTC cost).

If your employer contributes PF on actual Basic (say ₹50,000), your employee deduction is ₹6,000/month and employer also pays ₹6,000 — total ₹12,000/month into PF account. This reduces in-hand but builds retirement corpus faster.

Form 16 is the TDS certificate issued by your employer after the end of each financial year. It has two parts: Part A — TDS deducted and deposited quarterly, Part B — salary breakup, exemptions, deductions, and taxable income computation.

Employers must issue Form 16 on or before 15th June following the financial year end. You need Form 16 to file your ITR accurately — it shows total salary, HRA exemption claimed, 12BB investments declared, and TDS already paid.

TAXAJ generates Form 16 for all payroll clients as part of the annual compliance package.

Several reasons your actual in-hand may differ: (1) Variable pay — performance bonus, quarterly incentives, or sales commission not included in the calculator (variable pay is typically shown separately). (2) Actual salary structure — your employer may have a different Basic:HRA:Special Allowance ratio. (3) TDS adjustments — employer may deduct higher/lower TDS based on your Form 12BB declarations (80C, HRA, home loan). (4) One-time deductions — advance recovery, club fees, canteen recovery. (5) Arrears — if salary revised mid-year, arrears TDS is spread across remaining months.

For the most accurate computation, use the Detailed Mode above with your actual salary components.