Money basics3 min read · Updated 21 October 2026
CTC to in-hand salary: where the money goes
Why your in-hand salary is lower than CTC, with worked examples at ₹6, ₹12 and ₹18 lakh under the new tax regime for FY 2026-27.
Why in-hand is lower
CTC is the total cost to the company. Out of it come: employer PF (12% of basic), your own PF (12% of basic), gratuity (about 4.81% of basic), professional tax and income tax. What remains is paid to you.
Three examples
| CTC | Income tax a year | In-hand a month |
|---|---|---|
| ₹6,00,000 | ₹0 | ₹44,038 |
| ₹12,00,000 | ₹0 | ₹88,276 |
| ₹18,00,000 | ₹1,25,625 | ₹1,22,045 |
All assume 40% basic, PF on full basic, ₹200 a month professional tax, gratuity inside CTC.
What changes your take-home
- Basic %: a higher basic raises PF and gratuity, so cash in hand falls but savings rise.
- PF cap: some employers deduct PF only on ₹15,000 a month, which raises take-home.
- Variable pay: bonuses are taxed when paid.
How to check your own payslip
Ask HR for the salary breakup and look for four lines: basic, employer PF, gratuity and variable pay. Add employer PF and gratuity back to your monthly pay, and you should land close to CTC divided by 12. If the gap is bigger, ask what else is being held back. A joining bonus or insurance premium can also sit inside CTC.
Common questions
What is in-hand salary?
The amount credited to your bank account each month after all deductions.
Is employer PF part of CTC?
Usually yes. It is paid into your PF account, not to your bank.
Why does my payslip differ?
Employers set their own basic, allowances and tax method. This is an estimate.