What is the difference between CTC and In-Hand Salary?

Cost to Company (CTC) is the total annual expenditure an employer incurs on an employee, including basic pay, allowances, employer's PF contribution, gratuity, and performance bonuses. In-Hand Salary is the actual take-home pay credited into the bank account after mandatory deductions such as Employee PF, Professional Tax, and Income Tax (TDS).

How is Employee Provident Fund (PF) deducted?

Standard EPF regulations require an employee contribution of 12% of the basic salary plus dearness allowance (DA). A matching 12% is contributed by the employer, which is factored into the CTC.

Salary (In-Hand) Calculator - CTC to Take-Home Salary Online

Frequently Asked Questions

1. Why is my in-hand salary significantly lower than my CTC?

CTC includes direct salary, company contributions towards your EPF, health insurance, annual bonuses, gratuity, and statutory allowances. Your monthly in-hand salary is only the fixed cash component remaining after deducting your Employee EPF, Professional Tax, and Income Tax (TDS).

2. Is EPF calculated on entire CTC or just basic salary?

EPF is legally calculated as 12% of your Basic Salary plus Dearness Allowance (DA), capped or uncapped depending on your employer's HR policies, not on your gross CTC.

3. Which tax regime yields a higher take-home salary?

For individuals without large home loan interest, HRA, or 80C investments, the New Tax Regime generally provides lower tax deductions and higher in-hand pay due to wider tax slabs and full rebate up to ₹7 Lakhs.