Question 1

What is the difference between CTC and in-hand salary?

Accepted Answer

CTC (Cost to Company) is everything the employer spends on you, including the employer's PF contribution. In-hand salary is what actually reaches your bank account each month, after employee PF and income tax are deducted. The employer PF portion of CTC is saved for your retirement and is never paid out as salary.

Question 2

How is the salary breakup (Basic, HRA, Special Allowance) decided?

Accepted Answer

This tool assumes a common payroll structure: Basic is 50% of CTC, HRA is 40% of Basic, PF runs at 12% of Basic on both the employee and employer side, and Special Allowance absorbs whatever remains. Your employer may structure this differently, which changes your taxable income slightly.

Question 3

Why is my taxable income lower than my gross salary?

Accepted Answer

Two deductions apply before tax is computed. The employer's PF contribution is not treated as income in the first place, and salaried individuals get a flat standard deduction of ₹75,000 per year under the new regime. Taxable income is what remains after both.

Question 4

What is the Section 87A rebate?

Accepted Answer

Under the new tax regime, if your taxable income is up to ₹12,00,000, Section 87A rebates your entire tax liability, up to a maximum of ₹60,000. In practice this means zero income tax for taxable incomes within that limit. Just above the limit, marginal relief caps the tax at the amount by which your income exceeds ₹12,00,000.

Question 5

Which tax regime does this calculator use?

Accepted Answer

The new tax regime for FY 2026-27, which is now the default for salaried employees. It uses seven slabs from 0% up to ₹4,00,000 to 30% above ₹24,00,000, plus a 4% health and education cess on the final tax. The old regime's itemized deductions (80C, HRA exemption, etc.) are not covered here.

Question 6

Is this the exact amount I will receive every month?

Accepted Answer

It is a close estimate. Actual take-home can differ because of professional tax (state-specific, typically ₹100 to ₹200 per month), gratuity, perquisites, bonuses, and how your employer structures your breakup. Use this as a planning figure, not an offer-letter guarantee.

CTC to in-hand salary calculator

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