How in hand salary is worked out
CTC is what the company spends on you in a year. Your in hand salary is what actually reaches your bank account after the company removes its own contributions and the law removes EPF, professional tax, and income tax. The calculator above walks through each step for tax year 2026-27. If you already know your monthly gross and only want net pay, the take-home pay calculator is the quicker fit.
From CTC to take home
Two parts of CTC never reach your monthly pay: the employer EPF contribution (12% of Basic) and the gratuity provision (about 4.81% of Basic that the company sets aside each year). We remove those first to get your gross salary, then subtract what is deducted from gross.
What gets deducted
- Employee EPF: 12% of Basic plus DA, taken from your pay each month. The employer adds another 12% on top, which sits inside CTC.
- Professional tax: a state level tax, capped at ₹2,500 a year. Levied in states like Maharashtra, Karnataka, West Bengal, and Tamil Nadu, and not levied in Delhi, Haryana, or Uttar Pradesh.
- Income tax (TDS): calculated on your taxable salary under the regime you pick, then spread across 12 months.
Income tax slabs, new regime, tax year 2026-27
The Income-tax Act, 2025 replaced the 1961 Act from 1 April 2026 and uses the term “tax year” in place of previous year and assessment year. Budget 2026 left the new regime slabs (Section 202, earlier Section 115BAC) unchanged. Salaried taxpayers get a standard deduction of ₹75,000 (Section 19, earlier Section 16(ia)), and the rebate of up to ₹60,000 under Section 156 (earlier Section 87A) makes the tax nil when taxable income is ₹12 lakh or less. With the standard deduction, a salaried person pays no tax up to ₹12,75,000 of salary.
| Taxable income | 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% |
A health and education cess of 4% is added on the tax. The old regime keeps its own slabs (nil up to ₹2,50,000, then 5%, 20%, and 30%), a standard deduction of ₹50,000, and a rebate (up to ₹12,500) when taxable income is ₹5,00,000 or less, but it lets you claim deductions like 80C, 80D, and HRA exemption. Pick the regime that leaves more in your pocket.
Assumptions this calculator makes
- Tax year 2026-27 (1 April 2026 to 31 March 2027) under the Income-tax Act, 2025. New regime slabs are unchanged from the previous year per Budget 2026, and the new regime is the default.
- You are below 60 years of age. Senior and super senior basic exemption limits under the old regime are higher and are not applied here.
- Gratuity provision in CTC is taken as 4.81% of annual Basic. Employer EPF is 12% of Basic (or of ₹25,000 a month if you pick the capped basis; the EPFO wage ceiling rose from ₹15,000 to ₹25,000 on 17 September 2026). Under the Code on Wages, in force since 21 November 2025, Basic plus DA should be at least 50% of total pay, so keep the Basic field at 50% or higher unless your offer letter says otherwise.
- ESI is not deducted (the model assumes monthly wages above the ₹21,000 ESI threshold). Any insurance premium, NPS, or other CTC component is treated as part of taxable gross unless you remove it.
- Surcharge is applied above ₹50 lakh of taxable income (new regime capped at 25%). Marginal relief on surcharge is not separately computed, so very high incomes near a surcharge threshold may differ slightly.
- Your real Basic split, allowances, employer PF policy, and state professional tax decide the exact figure. Treat this as a close estimate, not a payslip.
Worked example: ₹15 lakh CTC, new regime
| Step | Annual |
|---|---|
| CTC | ₹15,00,000 |
| Basic (50% of CTC) | ₹7,50,000 |
| Less employer EPF (12% of Basic) | ₹90,000 |
| Less gratuity provision (4.81% of Basic) | ₹36,075 |
| Gross salary | ₹13,73,925 |
| Taxable income (gross minus ₹75,000) | ₹12,98,925 |
| Income tax: ₹20,000 + ₹40,000 + 15% of ₹98,925, plus 4% cess | ₹77,832 |
| Less employee EPF and professional tax (₹200 x 12) | ₹92,400 |
| Annual in-hand | ₹12,03,693 |
| Monthly in-hand | ₹1,00,308 |
If your employer caps PF at the ₹25,000 wage ceiling, employee and employer EPF fall to ₹36,000 each a year and the monthly in-hand rises.
Related tools
- Income tax calculator: compare old and new regime tax on your full income.
- HRA exemption calculator: work out the HRA you can claim under the old regime.
- EPF calculator: see how monthly PF contributions grow by retirement.
- Job offer comparison: put two CTC offers side by side on in-hand pay.
Employers drafting offers can pair these numbers with AI resume screening to shortlist candidates whose salary expectations fit the band.
Sources
- Income Tax Department: tax slabs and rebate for salaried individuals
- Income Tax Department: Section 392, Income-tax Act 2025 (TDS on salary, earlier Section 192)
- PIB: Cabinet raises EPFO wage ceiling from Rs 15,000 to Rs 25,000 (Sept 2026)
- PIB: four Labour Codes in force from 21 November 2025
Professional tax is a state levy capped at ₹2,500 a year under Article 276 of the Constitution; check your state department for exact slabs.
How is in hand salary calculated from CTC?
Start from CTC, remove the employer's own contributions that sit inside CTC (employer EPF at 12% of Basic and the gratuity provision of about 4.81% of Basic) to get gross salary. Then subtract employee EPF, professional tax, and income tax. Divide the yearly result by 12 for your monthly take home.
What are the new regime tax slabs for tax year 2026-27?
Unchanged from the previous year: nil up to ₹4 lakh, 5% from 4 to 8 lakh, 10% from 8 to 12 lakh, 15% from 12 to 16 lakh, 20% from 16 to 20 lakh, 25% from 20 to 24 lakh, and 30% above 24 lakh. A ₹75,000 standard deduction applies, and the Section 156 rebate (earlier Section 87A) makes tax nil up to ₹12 lakh of taxable income.
How much EPF is deducted from my salary?
Employee EPF is 12% of Basic plus DA each month. The employer matches it with another 12%, which is part of CTC and not cut from your pay. The statutory wage ceiling was raised from ₹15,000 to ₹25,000 a month with effect from 17 September 2026, so employers that cap PF now deduct up to ₹3,000 a month instead of ₹1,800. Use the EPF basis toggle to switch between full Basic and the capped figure.
Which states deduct professional tax?
States like Maharashtra, Karnataka, West Bengal, Tamil Nadu, Telangana, and Gujarat levy professional tax, capped at ₹2,500 a year. States like Delhi, Haryana, Uttar Pradesh, and Punjab do not. Set the monthly figure to 0 if your state does not charge it.
Should I pick the new or the old regime?
The new regime usually wins if you do not claim large deductions, thanks to the ₹75,000 standard deduction and the rebate up to ₹12 lakh. The old regime can win if you claim a lot through 80C, 80D, HRA exemption, and home loan interest. Run both in the calculator and compare the in hand figure.
Why is my in hand salary much lower than my CTC?
CTC bundles in costs you never see in monthly pay: employer EPF, the gratuity provision, and sometimes insurance or a joining bonus. After those and the deductions for employee EPF, professional tax, and income tax, take home is usually 70 to 90% of CTC.
Is in-hand salary the same as take-home pay?
They describe the same money, the net amount paid into your bank. This page starts from annual CTC. If you already know your monthly gross salary, use the take-home pay calculator, which starts from gross and adds ESI and state-wise professional tax.
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Disclaimer: This calculator gives an estimate for general guidance only and is not tax, legal, or financial advice. Your actual take home depends on your exact salary structure, employer policy, state, age, and the deductions you claim. Verify with your payslip or a tax professional.