Decode your CTC with
precision
Convert your Annual CTC into Monthly In-Hand Salary by separating your Basic, Allowances, and PF Deductions.
| Component | Annual (₹) | Monthly (₹) |
|---|
From CTC to cash in hand — in 3 steps
Your offer letter says one number. Your bank account shows another. This calculator bridges that gap — breaking down exactly where every rupee of your CTC goes before it reaches you.
three very different numbers
Every component of a typical Indian salary structure
A standard corporate salary in India isn't one number — it's 6–8 components, each with different tax treatment and different implications for your take-home pay.
Indian salary structures are designed with both employer cost-efficiency and employee tax optimisation in mind. The split between Basic, HRA, and Special Allowance is not arbitrary — it directly determines how much of your salary is taxable.
Basic Pay is the foundation. Everything else — HRA (typically 50% of Basic in metros, 40% elsewhere), Employer PF (12% of Basic), Employee PF (12% of Basic), and often Gratuity — is calculated as a percentage of it. A lower Basic Pay means lower PF deductions and higher take-home, but also a smaller retirement corpus and lower HRA exemption.
The Special Allowance is a catch-all component that makes up the difference between your total fixed salary and the sum of all other components. It is fully taxable but carries no deductions — which is why companies use it to pad salaries without increasing PF liability.
Old vs New tax regime — which puts more in your pocket?
From FY 2023-24, the New Tax Regime is the default for all salaried employees. Understanding both helps you choose the one that keeps more money in hand.
| Income Slab | New Regime Rate | Old Regime Rate | Difference |
|---|---|---|---|
| Up to ₹3,00,000 | Nil | Nil (up to ₹2.5L) | — |
| ₹3L – ₹7L | 5% | 5% (₹2.5L–₹5L) | Zero tax up to ₹7L (rebate) |
| ₹7L – ₹10L | 10% | 20% | New regime saves ₹30,000 |
| ₹10L – ₹12L | 15% | 30% | New regime saves ₹30,000+ |
| ₹12L – ₹15L | 20% | 30% | New regime saves ₹30,000+ |
| Above ₹15L | 30% | 30% | Deductions determine winner |
HRA exemption — often the biggest tax saver in your payslip
For employees paying rent in metros, the HRA exemption under the old tax regime can save ₹40,000–₹1,00,000+ in taxes annually — making it one of the most powerful salary components to optimise.
HRA (House Rent Allowance) is included in your salary to help cover rental costs. The exemption on HRA reduces your taxable income — but it's only available under the Old Tax Regime, and only if you are actually paying rent.
The exemption is the lowest of three amounts: the actual HRA received, 50% of Basic in metros (40% in non-metros), or actual rent paid minus 10% of Basic. The minimum of these three determines your exemption — which is why optimising Basic Pay, HRA component, and rent paid together can significantly lower your tax outgo.
If you pay rent to a parent, you can claim HRA exemption — but the rent must be genuine, paid by bank transfer, and the parent must declare it as rental income. This is fully legal and one of the most widely used but underutilised tax strategies in India.
Employees in the New Tax Regime cannot claim HRA exemption — the lower slab rates are meant to compensate, but for high-rent metro employees, the old regime + HRA exemption often wins.
② 50% of Basic (metro) / 40% of Basic (non-metro)
③ Actual rent paid − 10% of Basic Salary
Every mandatory deduction from your salary — explained
4 ways to legally increase your in-hand salary
How to negotiate and decode your offer letter
The CTC number in an offer letter is just the starting point. Knowing what to look for — and what to push back on — can mean ₹10,000–₹20,000 more in hand every month.
Frequently asked questions
Everything you need to know about salary structures, deductions, tax regimes, and in-hand pay.
Several components of your CTC never appear as cash in your bank account. The Employer PF contribution (12% of Basic) is part of CTC but goes directly to your EPF account, not your salary. Variable pay (bonus) is paid quarterly or annually, not monthly. Gratuity accrues over your tenure and is paid only on exit. Additionally, the Employee PF deduction (12% of Basic), Professional Tax (≈₹200/month), and TDS/Income Tax are deducted from your gross salary before the remainder reaches you. Together, these typically reduce CTC to 65–75% of the quoted number in monthly in-hand terms.
Use this simple rule: Add up all your deductions — 80C investments (PF already counts), HRA exemption, home loan interest (Sec 24b), NPS (80CCD(1B)), and standard deduction of ₹50K. If your total deductions exceed ₹3.75 Lakh, the Old Regime likely saves more tax. Below that, the New Regime with its lower slab rates and ₹75K standard deduction wins. Importantly, recalculate at the start of each financial year — circumstances change. You can switch between regimes annually when filing your ITR (with some restrictions for business income).
No — and deliberately so. TDS depends on your chosen tax regime (Old vs New), your personal 80C investments, HRA exemption (which depends on rent paid), home loan interest, NPS contribution, and any other deductions you declare via Form 12BB. These are highly individual and change year to year. The calculator shows your pre-TDS in-hand — which is accurate for PF, Professional Tax, and structure. To calculate your post-TDS in-hand, subtract your estimated monthly income tax from the figure shown.
Gratuity is a statutory benefit paid by an employer when an employee completes 5 or more years of continuous service. It is calculated as: (Last Drawn Basic Salary × 15 × Years of Service) ÷ 26. Many companies include the gratuity accrual in their CTC calculation (typically 4.81% of Basic annually). This inflates the CTC without adding to your monthly cash. Gratuity is received only when you resign after 5 years, retire, or are terminated. It is tax-free up to ₹20 Lakhs.
Yes — salary restructuring within the same CTC can increase in-hand meaningfully. If your company offers a Flexi Benefit Plan, restructure part of your Special Allowance into tax-exempt components: food coupons (up to ₹26,400/year tax-free), phone/internet reimbursement (actual bills, tax-free), LTA (₹2 fares tax-free every 2 years), and fuel reimbursement. You can also optimise towards the New Tax Regime (no investment commitments) if your deductions are low. These tweaks can add ₹1,000–₹5,000/month to in-hand with zero increase in CTC.
An increment increases your CTC — but the in-hand increase is proportionally smaller. A 20% CTC hike does not mean 20% more in hand. Additional salary typically falls in higher tax slabs (especially if crossing ₹10L or ₹15L), increasing TDS. Employee PF deductions also rise (12% of higher Basic). So a ₹2L annual increment might add only ₹10,000–₹12,000/month to in-hand after TDS and PF. Use the salary calculator to model your new structure before assuming the increment's full impact.
Know your salary — then make it work harder
Understanding your in-hand pay is just step one. The right tax regime, a well-structured salary, and the correct deductions can put ₹20,000–₹60,000 more in your pocket every year. Use the calculator above and then act on what you find.