CTC (Cost to Company) is the total amount a company spends on an employee annually — including basic salary, allowances, PF contributions, gratuity, insurance, and any other benefits. It is NOT what you receive in hand. Your actual take-home salary is significantly lower than CTC.
CTC vs Gross Salary vs Net Salary
CTC: Total cost to employer — includes both employee and employer contributions
Gross Salary: CTC minus employer's PF and gratuity — what is shown before deductions on payslip
Net Salary (Take Home): Gross minus employee PF, professional tax, and income tax TDS
Key Salary Components
Basic Salary: Foundation of salary — typically 40–50% of CTC. PF, gratuity, and HRA are calculated based on this
HRA (House Rent Allowance): Typically 40–50% of Basic. Exempt from tax if you pay rent (subject to conditions)
Special Allowance: Fully taxable component used to fill up the CTC
LTA (Leave Travel Allowance): Exempt from tax twice in a 4-year block for domestic travel
PF (Provident Fund): 12% of Basic deducted from employee + 12% contributed by employer (part of CTC)
Professional Tax: State-level tax — typically ₹200/month (₹2,400/year) in most states
Gratuity: 4.81% of Basic — employer contribution, part of CTC, paid on leaving after 5 years
New vs Old Tax Regime — Which is Better?
From FY 2023-24, the New Tax Regime is the default. Here's a quick comparison:
Feature
New Regime
Old Regime
Default from FY24
✅ Yes
❌ No (opt-in needed)
Standard Deduction
₹75,000
₹50,000
HRA Exemption
❌ Not available
✅ Available
80C deductions (PF, LIC, ELSS)
❌ Not available
✅ Up to ₹1.5L
Better for
Lower salary / fewer investments
Higher salary with HRA + 80C investments
Tax-free limit
₹7 lakh (with rebate)
₹5 lakh (with rebate)
❓ Frequently Asked Questions
Q: How much take home salary for ₹10 LPA CTC?
A: For a ₹10 LPA CTC with standard structure (40% basic), take home is approximately ₹71,000–₹75,000/month under the new tax regime. Deductions include employee PF (~₹4,800/month), professional tax (~₹200/month), and income tax TDS (~₹3,000–₹5,000/month). Use the calculator above for your exact breakup.
Q: How much take home for ₹15 LPA, ₹20 LPA, ₹30 LPA?
A: Approximate monthly take home (new regime, standard deductions): ₹15 LPA → ₹1,02,000–₹1,07,000 | ₹20 LPA → ₹1,32,000–₹1,38,000 | ₹30 LPA → ₹1,87,000–₹1,95,000. These are estimates — actual figures depend on exact salary structure, allowances, and deductions.
Q: Is the employer's PF part of CTC?
A: Yes — employer's PF contribution (12% of Basic) and gratuity (4.81% of Basic) are typically included in CTC. This means your actual in-hand salary is lower than what appears to be a simple calculation of CTC minus tax would suggest.
Q: How to reduce income tax on salary?
A: Under old regime: maximise 80C investments (EPF, ELSS, PPF, LIC — up to ₹1.5L), claim HRA if paying rent, use LTA, claim NPS deduction u/s 80CCD (additional ₹50,000). Under new regime: fewer options — standard deduction of ₹75,000 is the main benefit. For most salaried employees earning under ₹15 LPA without HRA benefits, the new regime is better.
⚠️ Disclaimer
This calculator provides estimates for reference only. Actual salary components, tax calculations, and deductions may vary based on your specific salary structure, employer policies, and applicable tax rules. Consult a qualified CA or tax advisor for personalised advice.