Question 1

Why is my take-home so much lower than my CTC?

Accepted Answer

CTC (Cost to Company) includes money you never actually receive month to month: the employer's own PF contribution and a gratuity provision, both of which sit on the company's books but only reach you as PF corpus on withdrawal or gratuity on separation after 5 years. On top of that, your own PF contribution, professional tax, and income tax (TDS) are deducted from what's left. It's normal for take-home to land somewhere around 70–80% of CTC, depending on your salary structure and tax bracket.

Question 2

How is Basic salary decided, and why does it matter?

Accepted Answer

There's no universal rule — it's whatever your employer's salary structure sets, commonly 35–50% of CTC. It matters because both employer and employee PF contributions (12% each) and the gratuity provision are calculated on Basic, not on CTC or gross salary. A lower Basic means lower PF deductions (more in your pocket monthly) but a smaller retirement corpus; a higher Basic means the reverse. Adjust the Basic % slider to see how it shifts the breakdown.

Question 3

Does this account for HRA tax exemption?

Accepted Answer

Not in this version — HRA is treated as fully taxable here for simplicity. In reality, under the old regime, HRA is exempt up to the least of: actual HRA received, rent paid minus 10% of Basic, or 50%/40% of Basic (metro/non-metro) — which needs your actual rent paid to calculate. If you pay rent and use the old regime, your real take-home under that regime will likely be higher than what's shown here. The new regime doesn't offer an HRA exemption at all, so this simplification doesn't affect new-regime results.

Question 4

Why does the old regime show my employee PF as a deduction from taxable income?

Accepted Answer

Your own PF contribution qualifies under Section 80C (up to a combined ₹1,50,000 cap across all 80C investments) only under the old regime — the new regime doesn't allow it. This calculator automatically counts your employee PF toward that 80C benefit when you select the old regime, and lets you add any further 80C/80D investments on top.

Question 5

What professional tax amount should I use?

Accepted Answer

Professional tax is set by each state and capped at ₹2,500/year nationwide by the Constitution, but the actual slabs and whether it applies at all varies by state — some states don't levy it. ₹200/month is a common mid-range default; check your state's slab (or your payslip, if you're already employed) for the exact figure.

Net Salary Calculator — CTC to Take-Home

CTC minus what never reaches your account, minus deductions

Common questions