Why is my in-hand so much lower than my CTC?

Because CTC counts money that never reaches you in that year. Employer provident fund goes to your retirement account and gratuity is an accrual you receive only after five years. Together those are usually a tenth of the package before any tax at all.

Should I cap provident fund at the ceiling?

It is a trade rather than a saving. Capping raises take-home now; contributing on full basic pay puts more into a tax-advantaged retirement account. This page shows both, so the choice is visible rather than assumed.

Does a higher basic pay help or hurt?

It raises provident fund and gratuity, so it lowers immediate take-home and raises long-term savings. It also raises the house rent allowance exemption you can claim under the old regime.

Salary & HRpayrollIndia only

CTC to In-Hand Salary Calculator

What actually reaches your bank from a CTC package, with every subtraction named. Roughly a fifth of a typical package is money the employee never sees in that year, and the offer letter does not say which fifth.

Also called: ctc calculator, in hand salary calculator, salary calculator india.

Monthly in hand

₹1,11,638

₹1,11,638 a month from a ₹15,00,000 package. The gap is ₹1,60,344 a year: ₹21,600 of employer provident fund and ₹28,860 of gratuity that never reach your account, plus ₹21,600 of your own contribution, 2,400 of professional tax and ₹85,884 of income tax.

Annual in hand

₹13,39,656

Gross salary

₹14,49,540

Basic pay

₹6,00,000

House rent allowance

₹3,00,000

Special allowance

₹5,49,540

Employer provident fund

₹21,600

Your provident fund

₹21,600

Gratuity accrual

₹28,860

Income tax

₹85,884

Total gap from CTC

₹1,60,344

In hand as a share of CTC

89.31%

How this is calculated

Computed from the published rates for the tax year you selected, which is not necessarily the current year. A calculation, not tax advice, and it does not know anything about your circumstances beyond the figures entered.

CTC split

In hand ₹13,39,656 (89%)Retirement ₹72,060 (5%)Tax ₹88,284 (6%)

Where the CTC goes

Component	Annual	Monthly
Basic pay	₹6,00,000	₹50,000
House rent allowance	₹3,00,000	₹25,000
Special allowance	₹5,49,540	₹45,795
Employer provident fund	₹21,600	₹1,800
Gratuity accrual	₹28,860	₹2,405
Your provident fund	-₹21,600	-₹1,800
Professional tax	-₹2,400	-₹200
Income tax	-₹85,884	-₹7,157
In hand	₹13,39,656	₹1,11,638

Method and background

This is what the calculation gives for the numbers you entered. It is an estimate, not advice, and it knows nothing about your situation beyond those numbers. Rules for India change on a published schedule; the effective date is shown on every rule-based tool.

How this is calculated

Cost to company is what you cost your employer, not what you are paid. It includes the employer provident fund contribution, which goes to your retirement account rather than your bank, and a gratuity accrual you only receive after five years of service. Take those out and what remains is gross salary. From that come your own provident fund contribution, professional tax and income tax. The share of basic pay drives almost everything downstream, which is why it is an input rather than a fixed assumption.

in hand = CTC - employer PF - gratuity - your PF - professional tax - income tax

CTC: Cost to company (currency)
PF_e: Employer's provident fund contribution (currency)
G: Gratuity accrual (currency)
PF_s: Your own provident fund contribution (currency)
PT: Professional tax (currency)
T: Income tax including cess (currency)

Worked examples

Each of these is asserted on every build. If a change to the engine ever moved one of these answers, the build would fail before the page could print it.

fifteen lakh CTC, new regime, PF capped

Cost to company (annual): ₹15,00,000
Basic pay as a share of CTC: 40%
Tax regime: New regime
Restrict provident fund to the statutory wage ceiling: Yes
Professional tax (annual): ₹2,400
Employee NPS contribution (annual): ₹0
Financial year: FY 2025-26 (AY 2026-27)

Monthly in hand₹1,11,638

Basic 40% of 15L; PF capped at the 15,000 monthly ceiling gives 12% of 1,80,000; gratuity 4.81% of basic

Open this example

uncapped provident fund lowers take-home

Cost to company (annual): ₹15,00,000
Basic pay as a share of CTC: 40%
Tax regime: New regime
Restrict provident fund to the statutory wage ceiling: No
Professional tax (annual): ₹2,400
Employee NPS contribution (annual): ₹0
Financial year: FY 2025-26 (AY 2026-27)

Monthly in hand₹1,04,548

12% of the full 6,00,000 basic on each side

Open this example

zero CTC is zero everything, not an error

Cost to company (annual): ₹0
Basic pay as a share of CTC: 40%
Tax regime: New regime
Restrict provident fund to the statutory wage ceiling: Yes
Professional tax (annual): ₹0
Employee NPS contribution (annual): ₹0
Financial year: FY 2025-26 (AY 2026-27)

Monthly in hand₹0

degenerate case

Open this example

Method and limits

What it assumes

Basic pay is the share of CTC you enter, which is a convention between employers rather than a rule.
House rent allowance is taken at half of basic pay, the common metro structure.
Provident fund is 12% from each side, restricted to the statutory wage ceiling unless you turn that off.
Gratuity accrues at 4.81% of basic pay, which is fifteen days of pay per year expressed annually.

What it deliberately does not model

Variable pay, joining bonuses and stock are not modelled. They change both the CTC and the timing.
Employer insurance premiums and meal or transport benefits vary too much between employers to assume.
Professional tax is set by state and the default here is an approximation. Enter your own figure.

Sources

EPFO. Employees Provident Funds and Miscellaneous Provisions Act, 1952 (primary government)
Payment of Gratuity Act, 1972 (primary government)

Formula version 1.0.0 · definition 1.0.0 · India · Report a problem with this calculator

Frequently asked questions

Why is my in-hand so much lower than my CTC?: Because CTC counts money that never reaches you in that year. Employer provident fund goes to your retirement account and gratuity is an accrual you receive only after five years. Together those are usually a tenth of the package before any tax at all.
Should I cap provident fund at the ceiling?: It is a trade rather than a saving. Capping raises take-home now; contributing on full basic pay puts more into a tax-advantaged retirement account. This page shows both, so the choice is visible rather than assumed.
Does a higher basic pay help or hurt?: It raises provident fund and gratuity, so it lowers immediate take-home and raises long-term savings. It also raises the house rent allowance exemption you can claim under the old regime.