What this tool does
CTC is the figure on the offer letter, and it is not the figure that lands in your bank account. Between the two sit your own contributions, your employer's contributions, professional tax, and income tax on whatever is left. This calculator turns an annual CTC into a monthly take-home figure and shows every line in between, so the gap between the offer and the credit is explained rather than asserted.
How it works
The first thing to be clear about is what actually reaches you. Basic and dearness allowance are paid to you; special allowances such as HRA, conveyance and LTA are paid to you but then spent by you. The employer's PF and the employer's gratuity provision sit inside the CTC and are never deducted from your payslip. Take-home is therefore calculated from gross, which is basic plus DA, not from the monthly CTC. That is the whole reason an in-hand figure can never be higher than your gross salary, whatever the allowances say.
Provident fund is charged at 12% for the employee and 12% for the employer on the same wage base, and that base is capped at 15,000 a month. Above the ceiling no PF is due, so someone on a 50,000 basic still contributes PF on only 15,000, which is 1,800 a month. The employer's gratuity provision is a further 4.81% of basic held back in the CTC, not in your pocket. Together these two employer costs are typically 16.81% of basic, and they are the main reason a mid-level CTC looks very different from its take-home.
Two smaller deductions apply conditionally. ESI is 0.75% of gross wages for the employee, but only while gross is at or below 21,000 a month, so it disappears the moment a salary rises past that line. Professional tax is a state subject, not a central one: it is 200 a month in Maharashtra, Karnataka and Tamil Nadu, and nil in most other states. Since it is a fixed amount rather than a percentage, it barely moves a senior salary and is worth checking which state your employer's payroll is registered in.
Income tax is calculated last, on your annual taxable income rather than your CTC. Under the new regime for financial year 2026-27 the standard deduction is 75,000 and the gratuity provision is exempt, so taxable income is gross for the year less those two amounts; the slab rates are then applied and 4% health and education cess is added. A rebate under section 87A means no tax at all where total income is 12,00,000 or less, which is why a 12,00,000 CTC can be entirely tax-free. It is worth being blunt about the arithmetic that follows from this: 12,00,000 of CTC with basic at half the CTC produces roughly 48,200 a month in hand, not 70,000 to 80,000. The higher figure only works when basic is set well under half of CTC.
Worked example
An annual CTC of 12,00,000 with basic at 50% of CTC, no dearness allowance, and a payroll state with no professional tax.
- Monthly CTC = 12,00,000 / 12 = 1,00,000
- Basic = 50% of 1,00,000 = 50,000 a month; DA = 0; gross = 50,000
- Employee PF = 12% of min(50,000, 15,000) = 1,800; employer PF = a further 1,800
- ESI = nil, because gross of 50,000 is above the 21,000 ceiling; professional tax = nil in this state
- Gratuity provision = 4.81% of 50,000 = 2,405 a month, an employer cost inside the CTC
- Taxable income = 600,000 - 75,000 standard deduction - 28,860 gratuity provision = 4,96,140
- 4,96,140 is inside the 12,00,000 rebate limit, so income tax is nil
Take-home is 48,200 a month, or 5,78,400 a year, which is 51.8% of the 1,00,000 monthly CTC. Take-home cannot exceed gross, so the familiar expectation of 70,000 to 80,000 in hand on 12 LPA only holds when basic is well under half of CTC.
Accuracy and limitations
- These figures are for financial year 2026-27 and were verified on 27 September 2026. Slabs, the standard deduction, the rebate limit and contribution thresholds are set by the Finance Act and change without notice: confirm them on incometaxindia.gov.in or with a chartered accountant before relying on the result.
- Special allowances, reimbursements and perquisites are not modelled. Loans, ESOPs and one-time payments are not in the CTC and are not shown here.
- The old-regime figures assume an employee below 60 and include no HRA, LTA, section 80C or 80D claim, so a real old-regime take-home will be higher than shown for anyone who claims them.
Frequently asked questions
- What is the in-hand salary on 12 LPA?
- About 48,200 a month if basic is 50% of a 12,00,000 CTC under the new regime for FY 2026-27. Only basic and dearness allowance are really yours, while PF, the employer's gratuity provision and the employer's PF share sit inside the CTC. The 70,000 to 80,000 in-hand figure people quote for 12 LPA works only when basic is well under half of CTC.
- Why is my in-hand salary less than CTC minus PF minus tax?
- Because employer PF and the employer's gratuity provision are counted in the CTC but never leave your payslip, so subtracting them again double-counts. Your take-home is gross pay minus only the employee deductions: your own PF, ESI, professional tax and income tax.
- Is professional tax deducted in every state?
- No. It is a state subject, and it is 200 a month in Maharashtra, Karnataka and Tamil Nadu while most other states levy nothing. Because it is a flat amount rather than a percentage, it matters far more to a junior salary than to a senior one.
- Should I choose the old tax regime or the new one?
- The new regime is the default and carries a higher standard deduction with no deductions. The old regime is usually better for anyone with large HRA, home-loan interest, or section 80C and 80D claims. Compare both figures the tool produces against your own deductions before choosing, and change your declaration with your employer rather than waiting for year end.
- Is my salary information sent anywhere?
- No. The entire calculation runs in your browser and nothing you type is transmitted, stored or logged. The page is a static export with no backend of its own.