Salary Calculator India 2026 — CTC to Take-Home Pay Breakup

Understanding Your Salary: CTC vs Gross vs Net

Salary terminology in India can be confusing. Most job offers mention CTC (Cost to Company), but what you actually receive in your bank account is much lower due to deductions. Let's break down each component:

What is CTC (Cost to Company)?

CTC is the total annual compensation package that an employer pays on your behalf, not just what you receive. It includes:

• Basic Salary: The fixed salary component, typically 40% of CTC
• House Rent Allowance (HRA): Allowance for rent, 40-50% of basic depending on metro/non-metro
• Special Allowance: Additional allowance to make up the remaining CTC
• Employer PF: 12% of basic salary (capped at ₹1,800/month if basic > ₹15K)
• Employer Gratuity: Provision for gratuity at separation, ~4.81% of basic annually
• Insurance, Medical, Transport, etc.: Other benefits (if applicable)

Standard Salary Component Breakdown

Indian companies typically follow the 40-30-30 rule: Basic (40%), HRA (30%), Special Allowance (30%) of CTC. However, this varies by company and industry.

Example: A ₹12 lakh annual CTC might break down as:

• Basic Salary: ₹4.8 lakh (40%)
• HRA: ₹1.8 lakh (15%)
• Special Allowance: ₹3.0 lakh (25%)
• Employer PF: ₹1.44 lakh (12% of basic)
• Employer Gratuity: ₹0.9 lakh (~7.5%)

EPF (Employee Provident Fund) Contribution Rules

EPF is a retirement savings scheme where both employee and employer contribute. Key points:

• Employee Contribution: 12% of your basic salary is deducted from your salary (goes to your EPF account)
• Employer Contribution: Employer contributes 12% of basic salary (goes to your EPF account)
• Important Cap: If your monthly basic salary exceeds ₹15,000, the employer PF is capped at ₹1,800/month (₹21,600/year). The employee contribution continues at 12% on the full amount.
• EPF Upper Limit: The maximum EPF contribution applies to salaries up to ₹15,000/month. Above this, only the capped ₹1,800/month applies.
• Withdrawal Rules: You can withdraw EPF at retirement or after leaving the job. Partial withdrawals allowed for education, home purchase, etc.

Example: If your basic is ₹40,000/month and you opt for EPF:

• Employee PF deducted: ₹40,000 × 12% = ₹4,800/month
• Employer PF contributed: Capped at ₹1,800/month (not the full 12% of ₹40,000)
• Total EPF accumulated: ₹6,600/month goes to your EPF account

Professional Tax by State

Professional Tax is a state-level tax deducted monthly. The rate varies by state:

State	Monthly PT	Annual PT	Applicable Salary Range
Maharashtra	₹200	₹2,400	All salary ranges
Karnataka	₹200	₹2,400	All salary ranges
Tamil Nadu	₹200	₹2,400	All salary ranges
West Bengal	₹200	₹2,400	Up to ₹15,000 monthly
Andhra Pradesh	₹200	₹2,400	Up to ₹20,000 monthly
Gujarat	₹0-200	₹0-2,400	Based on salary slabs
Delhi	₹200	₹2,400	All salary ranges
Punjab	₹100-300	₹1,200-3,600	Based on salary slabs

Income Tax Calculation (New Regime 2026)

From FY 2023-24 onwards, the New Tax Regime is the default for most individuals, with the Old Regime as optional.

New Regime Income Tax Slabs (FY 2025-26):

• Upto ₹3 lakh: 0% tax
• ₹3L - ₹6L: 5% tax
• ₹6L - ₹9L: 10% tax
• ₹9L - ₹12L: 15% tax
• ₹12L - ₹15L: 20% tax
• Above ₹15L: 30% tax

Example: Annual gross salary ₹12 lakh

• Less: Standard Deduction = ₹75,000
• Taxable Income = ₹11,25,000
• Tax: ₹0 (0-3L) + ₹15,000 (3-6L) + ₹30,000 (6-9L) + ₹33,750 (9-11.25L) = ₹78,750/year (approximately ₹6,562/month)

CTC vs Gross Salary vs Net Salary — Summary

Term	Definition	Includes	Example (₹12L CTC)
CTC	Total cost to employer	Basic + HRA + Allowances + Employer PF + Gratuity + Benefits	₹12,00,000/year
Gross Salary	Your salary before deductions	Basic + HRA + Allowances (excludes employer PF & gratuity)	₹9,60,000/year (₹80,000/month)
Net/Take-Home	Actual money in your bank	Gross Salary minus all deductions (PF, Tax, PT)	~₹7,50,000/year (~₹62,500/month)

How to Maximize Your Take-Home Pay

• Negotiate Basic Salary Wisely: Higher basic = higher PF deductions and gratuity, but also higher tax. Aim for 35-40% of CTC as basic for most cases.
• Maximize HRA Benefit: If your company provides HRA, ensure the basic + HRA split is optimized. In metro cities, HRA is typically 50% of basic; in non-metro, 40% of basic.
• Tax-Saving Investments: Invest in Section 80C instruments (ELSS, PPF, NPS) to reduce taxable income. You can save up to ₹1.5 lakh under 80C.
• Choose EPF Wisely: If your basic is low, EPF deduction is minimal; if high (>₹15K), the cap applies. Calculate the tax benefit vs. EPF deduction.
• Medical Insurance Premium: Under Section 80D, you can deduct health insurance premiums (self and family) up to ₹25,000, reducing taxable income.
• Home Loan Interest: If you have a home loan, interest is fully deductible under Section 24(b), up to ₹2 lakh/year under new regime.
• Request for Components Over Increment: Sometimes requesting flexible components (like meal vouchers, commute allowance) over higher salary can reduce tax impact.

New vs Old Tax Regime — Which is Better?

New Regime (Default): Lower tax rates with ₹75,000 standard deduction but no deductions for HRA, LTA, section 80C, 80D, etc.

Old Regime: Higher tax rates but allows all deductions like HRA, LTA, Section 80C (₹1.5L), Section 80D, interest on education loan, etc.

Who should choose Old Regime:

• Employees with significant HRA (>₹1.5L annually)
• Those making substantial Section 80C investments (ELSS, PPF, NSC, LIC)
• Employees with home loan interest deduction eligibility
• Those aged 60+ (higher exemption limit)

Salary Components Explained

• Basic Salary: The foundation of your salary, typically 35-40% of CTC. This is used for calculating PF, gratuity, and bonus.
• HRA (House Rent Allowance): Tax-free if you're paying rent. Usually 40-50% of basic depending on location. If you own your home or live with family rent-free, HRA is fully taxable.
• Dearness Allowance (DA): Applicable mainly to government employees and some public sector companies to adjust for inflation. Rare in private sector.
• Special Allowance: The remaining component to make up the CTC. It's fully taxable and usually non-pensionable.
• Conveyance Allowance: For commute expenses, usually tax-free up to ₹1,600/month (updated periodically).
• Medical Allowance: For medical expenses, usually tax-free up to ₹300/month.
• Meal Vouchers / Food Coupons: Tax-free perks provided by some companies for food expenses.
• LTA (Leave Travel Allowance): Tax-free allowance for travel/leave purposes, allowed once per year.

Understanding Gratuity in Your Salary

Gratuity is NOT a monthly deduction but rather an employer provision set aside for your retirement benefit. Typically calculated as ~(Basic × 15 × Years) ÷ 26. In the CTC, gratuity is shown as an employer cost (~4.81% of basic annually) but doesn't reduce your take-home pay directly. It's paid as a lump sum upon separation after 5 years of service.