What Is CTC? (India)
CTC stands for Cost to Company — the total annual cost an employer incurs to hire and maintain an employee. CTC is not your take-home salary. It includes your actual salary components plus employer contributions (PF, gratuity provisioning, insurance) that never directly reach your bank account.
The gap between CTC and in-hand salary is typically 25–35%, driven by:
- Employee's PF contribution (12% of basic — deducted from your salary)
- Income tax (TDS — deducted monthly based on projected annual income)
- Professional tax (₹200–₹2,500/month depending on state)
- Employer PF contribution (included in CTC but not paid to you directly)
CTC Components Explained
| Component | Typical % of CTC | Taxable? | Notes |
|---|---|---|---|
| Basic Salary | 35–50% | Fully taxable | Base for PF, gratuity, HRA calculations |
| House Rent Allowance (HRA) | 20–40% of Basic | Partially exempt | 50% (metro) or 40% (non-metro) of basic |
| Special Allowance | Variable | Fully taxable | Balancing component — absorbs remaining CTC |
| Leave Travel Allowance (LTA) | 5–10% | Exempt (2 trips/4 years) | For actual travel expenses |
| Medical Allowance | ₹1,250/month | Exempt up to ₹15,000/yr | Mostly consolidated into special allowance now |
| Employer PF (12% of Basic) | ~5–6% of CTC | Not directly paid to you | Goes to EPF account; included in CTC |
| Gratuity Provision | 4.81% of Basic | Not paid monthly | Accrues; paid on exit after 5 years |
| Performance Bonus | 10–30% | Fully taxable | Variable; often not guaranteed |
CTC to In-Hand Quick Reference (New Tax Regime, FY 2025-26)
This table shows approximate monthly in-hand salary for common CTC values under the new tax regime with standard deduction of ₹75,000. Assumes basic = 40% of CTC, metro city, no special allowances.
| Annual CTC | Monthly Gross | PF Deduction | Income Tax | Monthly In-Hand | Annual In-Hand |
|---|---|---|---|---|---|
| 6 LPA | ₹50,000 | ₹2,400 | ₹0 (rebate) | ≈ ₹46,700 | ≈ ₹5.6L |
| 8 LPA | ₹66,667 | ₹3,200 | ₹900 | ≈ ₹61,400 | ≈ ₹7.37L |
| 10 LPA | ₹83,333 | ₹4,000 | ₹2,700 | ≈ ₹75,200 | ≈ ₹9.02L |
| 12 LPA | ₹1,00,000 | ₹4,800 | ₹5,100 | ≈ ₹88,400 | ≈ ₹10.6L |
| 15 LPA | ₹1,25,000 | ₹6,000 | ₹9,200 | ≈ ₹1,08,000 | ≈ ₹13L |
| 20 LPA | ₹1,66,667 | ₹6,000 | ₹18,800 | ≈ ₹1,40,000 | ≈ ₹16.8L |
| 25 LPA | ₹2,08,333 | ₹6,000 | ₹30,800 | ≈ ₹1,70,300 | ≈ ₹20.4L |
| 30 LPA | ₹2,50,000 | ₹6,000 | ₹43,800 | ≈ ₹1,98,900 | ≈ ₹23.9L |
| 40 LPA | ₹3,33,333 | ₹6,000 | ₹73,800 | ≈ ₹2,52,000 | ≈ ₹30.2L |
| 50 LPA | ₹4,16,667 | ₹6,000 | ₹1,04,900 | ≈ ₹3,04,400 | ≈ ₹36.5L |
Estimates only. PF capped at 12% of ₹15,000 basic limit (₹1,800/mo = ₹21,600/yr). Professional tax ~₹200/mo. Use the calculator above for exact figures based on your actual salary structure.
6 LPA In-Hand Salary (New Tax Regime)
A ₹6 LPA CTC employee (basic ~₹2.4L/yr) has a taxable income below ₹7L after the standard deduction — meaning zero income tax under Section 87A rebate in the new regime. Monthly take-home is approximately ₹46,500–₹48,000, depending on your exact salary structure and whether you're in a professional tax state.
8 LPA In-Hand Salary (New Tax Regime)
At ₹8 LPA, the estimated monthly in-hand salary is approximately ₹60,000–₹63,000 under the new tax regime. After the ₹75,000 standard deduction, your taxable income is around ₹6.5L — a small income tax applies (around ₹10,000/yr). Most of the deduction is employee PF (~₹2,400/month if basic is ₹20,000) plus professional tax.
10 LPA In-Hand Salary (New Tax Regime)
For a ₹10 LPA CTC, the monthly in-hand salary is typically ₹68,000–₹74,000 under the new tax regime. Key deductions: employee PF (₹3,600–₹4,000/month), income tax (~₹3,000–4,500/month), and professional tax (~₹200/month). Use the calculator above for your exact breakup.
12 LPA In-Hand Salary (New Tax Regime)
At ₹12 LPA CTC, the monthly in-hand salary is approximately ₹86,000–₹92,000 under the new tax regime. At this level, income tax becomes more material (~₹5,000–6,000/month). The 15% tax slab kicks in for income above ₹9L, so your effective tax rate on incremental income is 15%.
20 LPA In-Hand Salary (New Tax Regime)
A ₹20 LPA CTC yields approximately ₹1,36,000–₹1,44,000 per month in hand under the new regime. Income tax at this level runs ~₹18,000–22,000/month. The effective tax rate is approximately 12–15% of gross. Old regime with full 80C + HRA may save ₹10,000–15,000/month, making it worth comparing if you have home loans and 80C investments.
India Salary Deductions: PF, Income Tax, Professional Tax
Provident Fund (PF) Deduction
Both employee and employer contribute 12% of basic salary to the EPF (Employee Provident Fund). The employee's 12% is deducted from your in-hand salary. The employer's 12% is part of your CTC but not paid as salary.
- PF is mandatory if basic salary ≤ ₹15,000/month
- For higher salaries, both employer and employee can opt out (International Workers exempt)
- PF contribution earns interest (8.25% for 2023–24)
Income Tax (TDS) Deduction
Employers deduct TDS (Tax Deducted at Source) monthly based on your projected annual income. From FY 2024–25, the New Tax Regime is the default:
| Annual Income Slab | New Regime Rate (2024–25) | Old Regime Rate |
|---|---|---|
| Up to ₹3,00,000 | Nil | Nil |
| ₹3,00,001 – ₹6,00,000 | 5% | 5% (up to ₹5L) |
| ₹6,00,001 – ₹9,00,000 | 10% | 20% |
| ₹9,00,001 – ₹12,00,000 | 15% | 20% |
| ₹12,00,001 – ₹15,00,000 | 20% | 30% |
| Above ₹15,00,000 | 30% | 30% |
Professional Tax
Professional tax is a state-level levy, deducted monthly from salary. Maximum is ₹2,500/year. Not applicable in all states — Delhi, Haryana, UP, Rajasthan, Uttarakhand, and most northeastern states do not levy professional tax.
US Salary Deductions: FICA, Federal, State
FICA Taxes (Social Security + Medicare)
Every US employee pays FICA taxes regardless of income level:
- Social Security: 6.2% on wages up to $168,600 (2024 wage base)
- Medicare: 1.45% on all wages (additional 0.9% if income > $200K single / $250K married)
Federal Income Tax
Federal income tax uses progressive brackets. For 2025 (single filers):
| Taxable Income | Rate |
|---|---|
| Up to $11,925 | 10% |
| $11,926 – $48,475 | 12% |
| $48,476 – $103,350 | 22% |
| $103,351 – $197,300 | 24% |
| $197,301 – $250,525 | 32% |
| $250,526 – $626,350 | 35% |
| Over $626,350 | 37% |
Standard deduction for 2025: $15,000 (single), $30,000 (married filing jointly).
India Salary Benchmarks by Role (2026)
| Role | 0–2 Yrs | 3–5 Yrs | 6–10 Yrs |
|---|---|---|---|
| Software Engineer (SDE) | ₹6–14L | ₹15–28L | ₹30–55L |
| Product Manager | ₹10–18L | ₹20–40L | ₹40–80L |
| Data Scientist / ML | ₹8–15L | ₹16–30L | ₹32–60L |
| HR / Talent Acquisition | ₹4–8L | ₹8–15L | ₹15–28L |
| Sales / Business Dev | ₹4–8L | ₹10–20L | ₹20–40L |
| Finance / Accounting | ₹4–8L | ₹8–15L | ₹15–30L |
| DevOps / Cloud | ₹7–14L | ₹15–28L | ₹28–50L |
| UX / Product Design | ₹5–10L | ₹12–22L | ₹22–40L |
Source: Glassdoor India, AmbitionBox, LinkedIn Salary Insights 2025–26. CTC figures for Tier 1 cities (Bangalore, Mumbai, Hyderabad, Pune).
Frequently Asked Questions
How much is 10 LPA in hand per month?
A ₹10 LPA CTC typically results in approximately ₹68,000–₹72,000 per month in hand, depending on the salary structure and tax regime. Under the new tax regime, deductions include employee PF (~₹3,600/month), income tax (~₹2,500–4,000/month), and professional tax (~₹200/month).
How much is 20 LPA in hand per month?
A ₹20 LPA CTC yields approximately ₹1,30,000–₹1,40,000 per month in hand under the new tax regime. For the old regime with deductions (80C, 80D, HRA), the in-hand amount could be slightly higher. The gross-to-net ratio typically falls to about 70% at this salary level due to higher tax brackets.
What is the difference between CTC and gross salary?
CTC (Cost to Company) = Gross Salary + Employer PF + Gratuity Provision + Other employer-paid benefits. Gross Salary = Basic + HRA + Allowances (the salary components paid to you before deductions). In-hand salary = Gross Salary − Employee PF − Income Tax − Professional Tax.
How is take-home salary calculated in the US?
Take-home = Gross Salary − Federal Income Tax − State Income Tax − Social Security (6.2%) − Medicare (1.45%) − Pre-tax deductions (401k, health insurance). For a $80,000 salary in Texas (no state tax), the annual take-home is approximately $60,000–$63,000.
Which is better — new tax regime or old tax regime?
The new regime is better if your total deductions (Section 80C, 80D, HRA, home loan interest) are less than approximately ₹3–3.5 lakh per year. The old regime works better for people with high 80C investments, home loan interest, and significant HRA exemption. For most salaried employees below ₹15L CTC without home loans, the new regime is simpler and often results in lower taxes.
What is 12 LPA in hand salary per month?
A ₹12 LPA CTC employee typically receives approximately ₹86,000–₹92,000 per month in hand under the new tax regime (FY 2025-26). Deductions include employee PF (~₹4,800/month on ₹40,000 basic), income tax (~₹5,100/month), and professional tax (~₹200/month). The exact amount depends on your salary structure and city.
How much is 15 LPA in hand per month?
A ₹15 LPA CTC typically gives ₹1,05,000–₹1,12,000 per month in hand under the new tax regime. The effective income tax rate at this level is approximately 8–10% of gross. Under the old regime with maximum 80C and HRA deductions, you could save ₹8,000–12,000/month in additional taxes.
What is the in hand salary for 6 LPA?
For ₹6 LPA, the monthly in-hand salary is approximately ₹46,500–₹48,500 under the new tax regime. Since taxable income (after standard deduction) stays below ₹7L, the full Section 87A rebate applies — meaning zero income tax. The only deductions are employee PF (~₹2,400/month on ₹20,000 basic) and professional tax (~₹200/month in applicable states).
How is in-hand salary different from gross salary?
Gross salary = Basic + HRA + all allowances — this is what you earn before any deductions. In-hand salary (net salary) = Gross Salary − Employee PF − Income Tax (TDS) − Professional Tax. For a ₹10 LPA employee, gross monthly salary might be ₹83,333 while in-hand is ₹68,000–₹74,000 — a gap of 10–18% driven primarily by PF and income tax.
