Short answer
In-hand salary is CTC minus the employer's PF and gratuity, then minus your own PF, professional tax, ESI (if gross pay is ₹21,000 a month or less) and income tax. Put simply: gross minus deductions is net, and gross plus employer contributions is CTC. At ₹12 lakh CTC with 50% basic, PF on full basic and a job in Pune, you take home ₹85,012 a month under the new regime, with no income tax.
For Tax Year 2026-27, salary up to ₹12.75 lakh is tax-free under the new regime: ₹12 lakh through the Section 156 rebate, plus the ₹75,000 standard deduction. From 1 April 2026, Pune, Bengaluru, Hyderabad and Ahmedabad also get the 50% HRA limit, which matters only if you choose the old regime. The PF wage ceiling rose from ₹15,000 to ₹25,000 on 17 September 2026, so capped PF is now ₹3,000 a month from each side.
How to use this salary calculator
- 1Enter your CTCUse the yearly figure from your offer letter. If part of it is a performance bonus, enter that under variable pay so the monthly figure stays accurate.
- 2Pick your work citySearch by city or state. The city sets your professional tax and whether HRA is capped at 50% or 40% of basic.
- 3Set basic pay, PF and ESICMost employers now keep basic at 50% of pay because of the labour codes. Choose PF on full basic or capped at ₹3,000 a month, and whether ESIC applies.
- 4Choose a regimeThe panel shows tax under both regimes. For the old regime, add rent, 80C investments and health insurance to see the full benefit.
- 5Flip it aroundSwitch to "In-hand to CTC" to find the package you should ask for to get a target monthly take-home.
How in-hand salary is calculated from CTC
CTC is what your employer spends on you in a year. Part of it never reaches your bank account. The calculation runs in two steps.
CTC = Gross salary + employer contributions (PF, PF admin, EDLI, ESIC, gratuity) + variable pay
Net take-home = Gross salary − your PF − ESIC − professional tax − income tax
The calculator shows both sides as a full CTC breakup in whole rupees, so each total ties back exactly. Variable pay is taxed in the year it is paid, so it is shown separately after tax. Income tax on the fixed salary is spread evenly across the 12 months, which is how employers deduct TDS under Section 392 of the Income-tax Act, 2025 (earlier Section 192).
Ideal CTC breakup for ₹12 lakh in 2026-27
A well-built CTC breakup ties out both ways: gross salary plus employer contributions equals CTC, and gross salary minus your deductions equals net take-home. For ₹12 lakh CTC in Pune with 50% basic and PF on full basic, employer contributions are ₹1,05,360 a year, gross salary is ₹10,94,640 and net take-home is ₹85,012 a month.
| Component | Monthly | Annual |
|---|---|---|
| Cost to company (CTC) | ₹1,00,000 | ₹12,00,000 |
| Less: employer PF (12% of basic) | −₹6,000 | −₹72,000 |
| Less: PF admin (0.5%) and EDLI (0.5%) | −₹375 | −₹4,500 |
| Less: gratuity (4.81% of basic) | −₹2,405 | −₹28,860 |
| Gross salary (A) | ₹91,220 | ₹10,94,640 |
| Basic pay (50% of CTC) | ₹50,000 | ₹6,00,000 |
| HRA (50% of basic) | ₹25,000 | ₹3,00,000 |
| Special allowance | ₹16,220 | ₹1,94,640 |
| Less: your PF (12% of basic) | −₹6,000 | −₹72,000 |
| Less: professional tax | −₹208 | −₹2,500 |
| Less: income tax (new regime) | ₹0 | ₹0 |
| Net take-home | ₹85,012 | ₹10,20,140 |
Why this structure works: basic at 50% meets the labour code wage rule, HRA at 50% of basic uses the full exemption for Pune if you switch to the old regime, and special allowance takes the balance. ESIC does not apply because gross pay is above ₹21,000 a month.
In-hand salary for common CTCs in 2026-27
These figures assume a Pune job, basic at 50% of CTC, PF at 12% of full basic, gratuity, PF admin and EDLI inside CTC, no variable pay and the new regime.
| CTC | Gross a month | Your PF a month | Income tax a year | In-hand a month |
|---|---|---|---|---|
| ₹3 lakh | ₹22,773 | ₹1,500 | Nil | ₹21,065 |
| ₹5 lakh | ₹37,957 | ₹2,500 | Nil | ₹35,249 |
| ₹6 lakh | ₹45,547 | ₹3,000 | Nil | ₹42,339 |
| ₹8 lakh | ₹60,772 | ₹4,000 | Nil | ₹56,564 |
| ₹10 lakh | ₹75,996 | ₹5,000 | Nil | ₹70,788 |
| ₹12 lakh | ₹91,220 | ₹6,000 | Nil | ₹85,012 |
| ₹15 lakh | ₹1,14,056 | ₹7,500 | ₹77,013 | ₹99,930 |
| ₹18 lakh | ₹1,36,893 | ₹9,000 | ₹1,19,764 | ₹1,17,705 |
| ₹20 lakh | ₹1,52,117 | ₹10,000 | ₹1,56,083 | ₹1,28,902 |
| ₹25 lakh | ₹1,90,177 | ₹12,500 | ₹2,61,853 | ₹1,55,648 |
| ₹30 lakh | ₹2,28,237 | ₹15,000 | ₹3,94,319 | ₹1,80,169 |
| ₹50 lakh | ₹3,80,479 | ₹25,000 | ₹9,64,312 | ₹2,74,912 |
Choosing PF capped at the ₹25,000 wage ceiling raises take-home. At ₹12 lakh CTC it lifts in-hand from ₹85,012 to ₹91,137 a month, but you save less for retirement.
Income tax slabs used for Tax Year 2026-27
Budget 2026 did not change any slab. The new regime under Section 202 is the default. You can pick the old regime at the start of the year by telling your employer, and switch again when you file the return.
| Taxable income, new regime | Rate |
|---|---|
| Up to ₹4,00,000 | Nil |
| ₹4,00,001 to ₹8,00,000 | 5% |
| ₹8,00,001 to ₹12,00,000 | 10% |
| ₹12,00,001 to ₹16,00,000 | 15% |
| ₹16,00,001 to ₹20,00,000 | 20% |
| ₹20,00,001 to ₹24,00,000 | 25% |
| Above ₹24,00,000 | 30% |
| Taxable income, old regime | Below 60 | 60 to 79 | 80 or above |
|---|---|---|---|
| Up to ₹2,50,000 | Nil | Nil | Nil |
| ₹2,50,001 to ₹3,00,000 | 5% | Nil | Nil |
| ₹3,00,001 to ₹5,00,000 | 5% | 5% | Nil |
| ₹5,00,001 to ₹10,00,000 | 20% | 20% | 20% |
| Above ₹10,00,000 | 30% | 30% | 30% |
Rebate under Section 156 (earlier 87A): nil tax up to ₹12 lakh of taxable income in the new regime and ₹5 lakh in the old. Just above ₹12 lakh, marginal relief caps tax at the income above ₹12 lakh. Surcharge starts at ₹50 lakh (10%), and 4% health and education cess applies on top. Standard deduction is ₹75,000 in the new regime and ₹50,000 in the old, under Section 19.
PF, ESI, gratuity and other salary deductions
| Item | Employee pays | Employer pays | Applies when |
|---|---|---|---|
| Provident fund (EPF + EPS) | 12% of basic + DA | 12% of basic + DA: 8.33% to EPS on wages up to ₹25,000 (max ₹2,083), rest to EPF | Firms with 20+ employees. Compulsory on wages up to ₹25,000 a month from 17 September 2026; above that the employer may cap it |
| PF admin charges and EDLI | Nil | 0.5% of PF wages (admin) + 0.5% of wages up to ₹25,000 (EDLI) | Whenever PF is paid. EDLI cover stays capped at ₹7 lakh |
| ESIC | 0.75% of gross | 3.25% of gross | Gross pay of ₹21,000 a month or less (₹25,000 for persons with disability) |
| Gratuity | Nil | 4.81% of basic, provided yearly | Paid after 5 years of service, or 1 year for fixed-term staff under the labour codes |
| Professional tax | Up to ₹2,500 a year | Nil | Depends on state; see the table below |
| Labour welfare fund | ₹6 to ₹25, half-yearly or yearly | 2 to 3 times the employee share | Some states, including Maharashtra (June and December) |
PF wage ceiling raised to ₹25,000 from 17 September 2026
Notification S.O. 5109(E) under the Code on Social Security, 2020 raised the EPF wage ceiling from ₹15,000 to ₹25,000 a month, with effect from 17 September 2026. Employees earning wages between ₹15,000 and ₹25,000 are now mandatorily covered for PF, pension and EDLI.
| Item | Up to 16 Sep 2026 | From 17 Sep 2026 |
|---|---|---|
| Wage ceiling for compulsory PF | ₹15,000 a month | ₹25,000 a month |
| Capped employee PF (12%) | ₹1,800 | ₹3,000 |
| Capped employer PF (12%) | ₹1,800 | ₹3,000 |
| Maximum EPS pension share (8.33%) | ₹1,250 | ₹2,083 |
| Employer share to EPF at the cap | ₹550 | ₹917 |
| EDLI maximum assurance | ₹7 lakh | ₹7 lakh (unchanged) |
- September 2026 payroll. File one ECR for September, with contributions worked out separately for the days before and after 17 September.
- Higher-wage contributions. Where PF is already paid on actual basic above the ceiling, that arrangement continues. It need not be cut back to ₹25,000.
- Take-home effect. For someone on capped PF, take-home falls by up to ₹1,200 a month, and the employer's cost rises by the same amount plus admin and EDLI.
The 50% wage rule under the new labour codes
The four labour codes took effect on 21 November 2025. The Code on Wages, 2019 defines "wages" so that basic pay, DA and retaining allowance must be at least 50% of total pay. If allowances exceed 50%, the excess is added back to wages for PF, gratuity and bonus.
- Higher PF, lower take-home. Moving basic from 40% to 50% of CTC raises PF on both sides. At ₹12 lakh CTC, in-hand drops from ₹87,943 to ₹85,012 a month, but your PF balance grows faster.
- Higher gratuity. Gratuity is worked out on wages, so a larger basic means a larger payout.
- Fixed-term staff. Employees on fixed-term contracts become eligible for gratuity after one year instead of five.
- PF ceiling is now ₹25,000. PF is compulsory on wages up to ₹25,000 a month. Above that, employers can still restrict contributions to 12% of ₹25,000, which is ₹3,000 a month.
HRA exemption: 8 cities now get 50%
Under the old regime, HRA is exempt up to the least of three amounts: HRA received, rent paid minus 10% of basic, and 50% or 40% of basic depending on the city. The Income-tax Rules, 2026 widened the 50% list from four cities to eight, for salary from 1 April 2026. The new regime gives no HRA exemption.
| City | Limit (% of basic) | Since |
|---|---|---|
| Mumbai, Delhi, Kolkata, Chennai | 50% | Existing |
| Bengaluru, Hyderabad, Pune, Ahmedabad | 50% | Tax Year 2026-27 |
| All other cities, including Thane, Navi Mumbai, Noida and Gurugram | 40% | — |
Professional tax by state for 2026-27
Professional tax is set by each state, deducted monthly by the employer and capped at ₹2,500 a year. It is a deduction only in the old regime. Search for your state.
| State | Monthly gross salary and tax | Yearly maximum |
|---|---|---|
| Maharashtra | Up to ₹7,500: nil · ₹7,501 to ₹10,000: ₹175 · above ₹10,000: ₹200 (₹300 in February). Women up to ₹25,000: nil | ₹2,500 |
| Karnataka | Up to ₹25,000: nil · above ₹25,000: ₹200 (₹300 in February) | ₹2,500 |
| Telangana | Up to ₹15,000: nil · ₹15,001 to ₹20,000: ₹150 · above ₹20,000: ₹200 | ₹2,400 |
| Andhra Pradesh | Up to ₹15,000: nil · ₹15,001 to ₹20,000: ₹150 · above ₹20,000: ₹200 | ₹2,400 |
| Gujarat | Below ₹12,000: nil · ₹12,000 and above: ₹200 | ₹2,400 |
| West Bengal | Up to ₹10,000: nil · to ₹15,000: ₹110 · to ₹25,000: ₹130 · to ₹40,000: ₹150 · above: ₹200 | ₹2,400 |
| Tamil Nadu | Half-yearly on six months' pay: up to ₹21,000 nil, rising in steps to ₹1,250 above ₹75,000 | ₹2,500 |
| Kerala | Half-yearly on six months' pay: nil below ₹12,000 a month, rising in steps to ₹1,250 | ₹2,500 |
| Madhya Pradesh | Yearly pay up to ₹2.25 lakh: nil · to ₹3 lakh: ₹1,500 · to ₹4 lakh: ₹2,000 · above: ₹2,500 | ₹2,500 |
| Odisha | Up to ₹13,304: nil · to ₹25,000: ₹125 · to ₹41,666: ₹167 · above: ₹208 | ₹2,500 |
| Delhi, Uttar Pradesh, Haryana, Rajasthan, Uttarakhand, Chandigarh | No professional tax | Nil |
Worked examples
Monthly CTC is ₹1,00,000. Employer PF ₹6,000, PF admin and EDLI ₹375 and gratuity ₹2,405 add up to ₹8,780, leaving gross pay of ₹91,220 (basic ₹50,000, HRA ₹25,000, special ₹16,220). Taxable income is ₹10,19,640, below ₹12 lakh, so no tax.
₹91,220 − ₹6,000 PF − ₹208 PT = ₹85,012 a month · ₹91,220 + ₹8,780 = ₹1,00,000 CTC
HRA exemption under the new 50% Bengaluru limit is about ₹3,80,000 (rent minus 10% of basic). Even so, the old regime tax is ₹1,84,985 against ₹1,56,083 in the new regime.
New regime wins by ₹28,902: ₹1,28,902 a month in hand
Monthly CTC is ₹22,500. After employer PF ₹1,350, admin and EDLI ₹112, gratuity ₹541 and employer ESIC ₹646, gross pay is ₹19,851. That is under ₹21,000, so ESIC applies at 0.75% from you.
₹19,851 − ₹1,350 PF − ₹149 ESIC − ₹208 PT = ₹18,144 a month
Fixed taxable salary stays under ₹12 lakh, so there is no monthly TDS. When the bonus is paid, total income crosses ₹12 lakh and the full slab tax of ₹79,038 falls on it.
₹95,680 a month, plus ₹70,962 of the ₹1,50,000 bonus
Which regime gives a higher in-hand salary?
For most salaried people, the new regime gives more take-home up to about ₹15 lakh, because tax is nil up to ₹12.75 lakh and the slabs are wider. The old regime wins only when HRA, 80C (Section 123), home loan interest and health cover together are large, roughly ₹5.4 lakh beyond the standard deduction at ₹15 lakh and ₹8 lakh from ₹25 lakh upward. Use the "Old regime details" fields to test your own numbers, then tell your employer your choice so monthly TDS matches.
Frequently asked questions
What is an ideal CTC breakup in 2026-27?
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Keep basic at 50% of CTC to meet the labour code wage rule, set HRA at 50% of basic (40% outside the 8 metros), and use special allowance for the balance. Employer PF, PF admin, EDLI, gratuity and employer ESIC sit outside gross salary. Gross plus these employer contributions should equal CTC, and gross minus your PF, ESIC, professional tax and TDS gives net take-home. At ₹12 lakh in Pune, that is ₹85,012 a month.
How do I calculate in-hand salary from CTC?
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Remove variable pay and employer contributions (PF, PF admin, EDLI, ESIC and gratuity) from CTC to get gross salary. Then subtract your own PF, ESIC, professional tax and income tax to get net take-home. Gross minus deductions equals net, and gross plus employer contributions equals CTC.
What is the in-hand salary for 12 LPA?
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₹85,012 a month, assuming a job in Pune, basic at 50% of CTC, PF on full basic and the new regime. There is no income tax because taxable income stays under ₹12 lakh. With PF capped at the ₹25,000 wage ceiling, in-hand rises to ₹91,137.
What changed in PF from 17 September 2026?
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The EPF wage ceiling rose from ₹15,000 to ₹25,000 a month under notification S.O. 5109(E) of the Code on Social Security, 2020. Capped PF is now ₹3,000 a month each from employee and employer, the maximum EPS share is ₹2,083, and employees with wages up to ₹25,000 are compulsorily covered.
How much PF is deducted from my salary?
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12% of basic pay plus DA, and your employer adds another 12% from your CTC, plus 0.5% admin charges and 0.5% EDLI. PF is compulsory on wages up to ₹25,000 a month. If your basic is higher, your employer may cap the contribution at ₹3,000 a month.
Is salary up to ₹12.75 lakh tax-free in 2026-27?
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Yes, under the new regime. The Section 156 rebate makes tax nil on taxable income up to ₹12 lakh, and salaried people also get the ₹75,000 standard deduction. Budget 2026 did not change these limits.
When is ESIC deducted from salary?
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When gross pay is ₹21,000 a month or less (₹25,000 for a person with a disability). You pay 0.75% of gross and the employer pays 3.25%, which is part of CTC. The calculator applies ESIC automatically below the limit, or you can switch it on or off.
What is the 50% wage rule in the new labour codes?
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From 21 November 2025, basic pay, DA and retaining allowance must make up at least 50% of total pay. If allowances go above 50%, the excess counts as wages for PF, gratuity and bonus. This usually raises PF and gratuity and lowers monthly take-home.
Which cities get 50% HRA exemption from 2026-27?
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Eight cities: Mumbai, Delhi, Kolkata and Chennai, plus Bengaluru, Hyderabad, Pune and Ahmedabad, which were added by the Income-tax Rules, 2026 for salary from 1 April 2026. Other cities get 40% of basic. HRA exemption is available only under the old regime.
How much professional tax is deducted in Maharashtra?
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₹200 a month when gross pay is above ₹10,000, and ₹300 in February, for a total of ₹2,500 a year. Pay between ₹7,501 and ₹10,000 attracts ₹175 a month. Women earning up to ₹25,000 a month pay nothing.
Which tax regime gives a higher in-hand salary?
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The new regime for most people, especially up to ₹15 lakh. The old regime gives more only when HRA exemption, 80C, home loan interest and health insurance add up to a large amount, about ₹5.4 lakh at ₹15 lakh salary and ₹8 lakh from ₹25 lakh upward.
Why is my in-hand salary much lower than CTC divided by 12?
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CTC includes money you never receive monthly: employer PF, PF admin and EDLI, gratuity, employer ESIC and any annual bonus. Your own PF, professional tax and TDS then come off gross pay. At ₹12 lakh CTC, CTC ÷ 12 is ₹1,00,000 but in-hand is ₹85,012.