How to use this salary calculator
This salary calculator converts your annual CTC into monthly in-hand for FY 2026-27 under both the old and new tax regimes. Four inputs drive the result:
- Annual CTC — the total cost-to-company figure on your offer letter (before PF, gratuity, and tax). The salary calculator splits this into components automatically using standard 40-50-10 assumptions, which you can override.
- Metro / non-metro — affects HRA exemption computation. Mumbai / Delhi / Kolkata / Chennai qualify as metro (50% of basic for HRA); everything else is non-metro (40%).
- Tax regime — old regime (wider deduction menu, higher slab rates) or new regime (narrower deductions, lower slab rates, ₹75K std deduction). Toggle to see in-hand under each side-by-side.
- Deductions (old regime only) — 80C, 80D, 80CCD(1B), Section 24(b) home-loan interest, monthly rent. The salary calculator disables these fields automatically when the new regime is selected.
Every field auto-saves to the URL — share with HR, your financial advisor, or bookmark for next year. The result panel shows component-wise breakdown, regime comparison, monthly in-hand, and total annual tax.
From CTC to in-hand — how the salary calculator works
The number on your offer letter (CTC, or “cost to company”) is rarely what you take home. CTC is the employer’s total cost of employing you for a year — which includes things like Provident Fund and gratuity that never appear in your bank account each month, and a chunk that the government taxes before you see it. This calculator walks the full chain: split CTC into its standard components, deduct what doesn’t reach your bank, compute income tax under the regime of your choice, and tell you the actual monthly cash you’ll receive.
The standard CTC structure
Most Indian companies break CTC into a stable set of components:
- Basic salary — typically 40–50% of CTC. Used as the base for HRA, PF, and gratuity.
- House Rent Allowance (HRA) — usually 50% of basic for metro cities (Mumbai, Delhi, Kolkata, Chennai), 40% for non-metros. Partially exempt under Section 10(13A) when you actually pay rent.
- Special allowance — the residual after basic, HRA, employer PF, and gratuity. Fully taxable.
- Employer Provident Fund (EPF) — 12% of basic, capped at 12% of ₹15,000 = ₹1,800/month if your company applies the wage cap (most do).
- Gratuity accrual — 4.81% of basic per month, payable on exit after 5+ years of continuous service. Most companies show this as a CTC line item even though you’ll only see it on departure.
- Bonus / variable — performance pay, often quoted as a target percentage of CTC. Fully taxable.
What the calculator does
Given your CTC and the standard split assumptions:
- Computes basic, HRA, employer PF, and gratuity.
- Computes special allowance = CTC − fixed components − bonus.
- Adds bonus to gross taxable salary.
- Computes HRA exemption (old regime only) = least of (HRA, 50%/40% basic, rent − 10% basic).
- Delegates tax computation to our income-tax engine, applying standard deduction (₹50K old / ₹75K new — see the full Standard Deduction Old vs New Tax Regime FY 2026-27 India guide) and your chosen Chapter VI-A deductions.
- Subtracts employee PF, professional tax, and average monthly TDS from cash gross to give monthly in-hand.
HRA exemption — the rent maths
Under Section 10(13A), the exempt portion of HRA is the LEAST of:
- Actual HRA received from employer
- 50% of basic (metro) or 40% of basic (non-metro)
- Rent paid minus 10% of basic
For ₹15L CTC at 40% basic (₹6L) in a metro, with ₹25K monthly rent:
- Actual HRA = 50% × 6L = ₹3 lakh
- 50% basic = ₹3 lakh
- Rent − 10% basic = (25K × 12) − 60K = 3L − 60K = ₹2.4 lakh
- Exemption = least of three = ₹2.4 lakh
That ₹2.4 lakh is removed from taxable income (only on the old regime — the new regime forfeits HRA exemption entirely). At a 30% marginal rate, that’s a ₹72,000/year tax saving from renting in a metro.
Provident Fund — the wage cap
EPFO mandates 12% employee + 12% employer of basic. The 12% employer contribution splits as 8.33% to EPS (Employees Pension Scheme, capped at ₹15K wage) + 3.67% to EPF. Most companies cap PF contribution at 12% of ₹15,000 basic = ₹1,800/month, even when actual basic is much higher. This is legally permitted (Supreme Court 2019 ruling). Companies that DON’T cap PF give a higher accumulated corpus but lower in-hand.
The calculator’s “Apply PF wage cap” toggle lets you compare both scenarios. Toggle off → full 12% of basic flows to PF (savings) and reduces in-hand. Toggle on → only ₹1,800/month goes to PF, freeing up cash.
Gratuity accrual
Gratuity is a statutory benefit under the Payment of Gratuity Act 1972. Accrues at 15 days of last drawn basic per year of service— expressed as a monthly accrual rate of 15/26/12 = 4.81% of basic. Payable on exit after 5+ years of continuous service. Up to ₹20 lakh of gratuity received at exit is exempt from income tax.
Most companies show gratuity in the CTC offer letter even though you only see it on departure. Toggle “Gratuity included in CTC” off if your offer letter explicitly excludes it (some startups don’t, despite the legal obligation).
Professional tax
State-level levy on salaried income, deducted monthly:
- Maharashtra, Karnataka, Tamil Nadu, West Bengal, Andhra Pradesh, Telangana, Gujarat, etc. — ₹2,400–₹3,000/year typical for income above ₹10K/month.
- Delhi, Haryana, UP, Rajasthan, Punjab — no professional tax.
The calculator defaults to ₹2,500/year. Adjust to your state’s slab if needed.
Worked example — ₹15L CTC, 40% basic, metro, new regime
- CTC = ₹15,00,000
- Basic = ₹6,00,000 (40%)
- HRA = ₹3,00,000 (50% of basic, metro)
- Employer PF (capped) = ₹21,600/year
- Gratuity accrual = ₹28,860/year (4.81% × 6L)
- Special allowance = 15L − 6L − 3L − 21.6K − 28.86K = ₹5,49,540
- Gross taxable salary = 6L + 3L + 5.49L = ₹14,49,540
- Standard deduction (new regime) = ₹75,000
- Taxable income = ₹13,74,540
- Tax (new regime FY 2026-27) = ~₹1,17,000 + cess
- Employee PF = ₹21,600/year
- Professional tax = ₹2,500/year
- In-hand annual = 14.49L − 21.6K − 2.5K − 1.21L ≈ ₹13.06 lakh
- Monthly in-hand = ₹1.09 lakh
Worked example — ₹8L CTC, first-job profile
Fresh graduate, ₹8,00,000 CTC, metro renter (₹18K/month), no home loan, ₹50K to PPF. Run through the salary calculator on old regime:
- Basic = ₹3,20,000 (40%)
- HRA = ₹1,60,000 (50% of basic, metro)
- Employer PF = ₹21,600/year (capped at ₹15K wage)
- Gratuity accrual = ₹15,392/year
- Special allowance = 8L − 3.2L − 1.6L − 21.6K − 15.4K = ₹3,03,000
- Gross taxable = 3.2L + 1.6L + 3.03L = ₹7,83,000
- Standard deduction (old regime) = ₹50,000
- HRA exemption = min(1.6L, 1.6L, 18K×12 − 32K) = ₹1,84,000
- 80C (PPF) = ₹50,000
- Taxable income = 7.83L − 50K − 1.84L − 50K = ₹4,99,000
- Slab tax = ₹12,450 (5% on 2.49L above 2.5L threshold)
- 87A rebate = ₹12,450 (taxable ≤ 5L)
- Total tax = ₹0
- In-hand annual = 7.83L − 21.6K − 2.5K − 0 = ₹7.59L
- Monthly in-hand = ~₹63,250
For entry-level salaries, the salary calculator shows that old regime + HRA + 80C often pushes taxable income below the ₹5L 87A threshold — zero tax despite ₹8L CTC. New regime for the same profile: std deduction ₹75K, no HRA, no 80C → taxable ₹7.08L → tax ~₹22.5K. Old regime wins by ₹22.5K here.
Worked example — ₹25L CTC, home owner, home loan active
Mid-senior, ₹25L CTC, owns home (no HRA), ₹1.5L PPF, ₹50K NPS Tier-1, ₹25K family health insurance, ₹2L home loan interest (Section 24(b)). Old regime:
- Basic = ₹10,00,000 (40%)
- Employer PF = ₹21,600/year (capped)
- Gratuity accrual = ₹48,100/year
- Special allowance = 25L − 10L − 5L (HRA) − 21.6K − 48.1K = ~₹9,30,000
- HRA not claimed (owns home) → HRA fully taxable
- Gross taxable = 10L + 5L + 9.3L = ₹24,30,000
- Standard deduction = ₹50,000
- 80C + 80CCD(1B) + 80D + Section 24(b) = 1.5L + 50K + 25K + 2L = ₹4,25,000
- Taxable income = 24.3L − 50K − 4.25L = ₹19,55,000
- Slab tax = ₹12,500 + ₹1L + ₹2,86,500 = ₹3,99,000
- Cess 4% = ₹15,960
- Total tax = ₹4,14,960
- In-hand annual = 24.3L − 21.6K − 2.5K − 4.15L = ₹19.91L
- Monthly in-hand = ~₹1.66L
Same profile on new regime: taxable = 24.3L − 75K = ₹23,55,000, tax = ₹4,19,500 + cess ₹16,780 = ₹4,36,280. Old regime saves ₹21,320 here, driven almost entirely by the Section 24(b) ₹2L home-loan interest deduction. Run both regimes in the salary calculator to see your exact numbers.
Worked example — ₹50L CTC, premium segment
Director / senior manager, ₹50L CTC, renting in Bangalore (₹60K/month), ₹1.5L PPF, ₹50K NPS Tier-1, ₹50K 80D, no home loan. Old regime through the salary calculator:
- Basic = ₹20,00,000 (40%)
- HRA = ₹10,00,000 (50% of basic, metro)
- Employer PF = ₹21,600/year (capped)
- Gratuity = ₹96,200/year
- Special allowance = 50L − 20L − 10L − 21.6K − 96.2K = ₹18,82,200
- Gross taxable = 20L + 10L + 18.82L = ₹48,82,200
- HRA exemption = min(10L, 10L, 7.2L − 2L) = ₹5,20,000
- Std deduction + 80C + 80CCD(1B) + 80D = 50K + 1.5L + 50K + 50K = ₹3L
- Taxable income = 48.82L − 5.2L − 3L = ₹40,62,200
- Slab tax = ₹12,500 + ₹1L + ₹9,18,660 = ₹10,31,160
- Surcharge (below ₹50L threshold) = 0
- Cess 4% = ₹41,246
- Total tax = ₹10,72,406
- In-hand annual = 48.82L − 21.6K − 2.5K − 10.72L = ₹37.86L
- Monthly in-hand = ~₹3.16L
New regime for same profile: taxable 48.82L − 75K = ₹48,07,200, tax ~₹9,81,660, cess ₹39,266, total ₹10,20,926. Same in-hand. New regime saves ₹51,480 here — because HRA + 80C + 80D together (~₹8.5L) can’t overcome the wider new-regime slabs. Reverse the maths: add a ₹2L Section 24(b) home loan and old regime wins. The salary calculator handles this switch automatically.
Salary structure — which split maximises in-hand?
| Basic % of CTC | In-hand (old regime, ₹15L CTC) | PF accrual | Best for |
|---|---|---|---|
| 40% (standard) | ~₹13.1L/year | ₹21,600 | Default; balances HRA exemption vs PF savings |
| 50% (high basic) | ~₹12.9L/year | ₹21,600 (capped) | Maximises HRA exemption for metro renters |
| 30% (low basic) | ~₹13.3L/year | ₹21,600 (capped) | Higher cash in-hand; lower retirement corpus |
| Custom — no PF cap | ~₹12.5L/year | ₹72,000 (12% of full basic) | Maximises retirement corpus; companies that opt out of the cap |
Most Indian employers lock the basic % and wage cap — you can’t freely choose. But if your employer offers a flexible-benefits plan (“flexi pay”, meal cards, NPS 80CCD(2), LTA), re-run the salary calculator with each adjustment to see the net in-hand impact before submitting your preferences.
Common mistakes to avoid
- Assuming CTC is take-home. CTC includes employer PF, gratuity accrual, and often variable bonus — none of which appear in your bank account each month. For a typical ₹15L CTC, bank-account in-hand is ~₹1.08-1.10L/month, not ₹1.25L.
- Ignoring HRA landlord-PAN rule. If your annual rent exceeds ₹1L, your landlord’s PAN is mandatory for HRA exemption. Without it, the exemption is disallowed at CPC-ITR processing — and you owe tax on the full HRA. Collect the PAN before you submit rent declaration to HR.
- Picking new regime blindly because it’s “default”. For anyone with ₹2L+ HRA exemption or ₹2L+ Section 24(b) home-loan interest, old regime typically saves ₹30K-1.5L/year. Always run both regimes in the salary calculator first.
- Not negotiating special allowance vs basic. Higher basic = higher PF (forced savings, cannot withdraw) + higher HRA ceiling. Higher special allowance = more cash in-hand but lower retirement corpus. Choose based on whether you’re in accumulation (prefer higher basic) or cash-flow phase (prefer higher special).
- Missing the ₹75K standard deduction in new regime. Budget 2024 raised it from ₹50K. If your payroll still applies ₹50K (common in Q1 of FY 2024-25 due to delayed update), your TDS is slightly higher than it should be. ITR filing refunds the excess.
- Forgetting 80CCD(2) employer NPS. If your employer contributes to your NPS under 80CCD(2), the contribution is deductible in BOTH regimes (up to 10% of basic for private, 14% for government). This is the one Chapter VI-A deduction the new regime preserves — ask HR to enable it if they haven’t.
- Treating variable bonus as guaranteed. Target bonus in CTC is not guaranteed — it’s performance / company-linked. If the salary calculator assumes 100% payout and your actual payout is 60%, your real in-hand is ₹3-5L/year lower than projected. Run the calculator with 0% bonus for a conservative baseline.
Frequently asked questions
- Why is my in-hand much lower than CTC?
- Three reasons: PF (employer + employee, doesn’t reach your bank), gratuity (only at exit), and income tax. For a typical ₹15L CTC, your bank account sees about ₹13L per year = ₹1.08L/month, depending on regime.
- Old or new regime — which gives more in-hand?
- Depends on your deductions. If you have significant (HRA + 80C + home loan interest + 80D), old regime usually wins. If you have minimal deductions, new regime wins because of its wider slabs and higher standard deduction (₹75K vs ₹50K). The calculator lets you toggle between them and compare.
- Why is HRA exemption shown only on old regime?
- New regime explicitly removes HRA, LTA, Section 24(b), and most Chapter VI-A deductions in exchange for lower slab rates. This is the central trade-off; we don’t apply HRA exemption when you select new regime.
- How accurate is this calculator?
- All maths uses high-precision decimal arithmetic and delegates income-tax computation to our income-tax engine, which is cross-checked against published Income Tax India examples. CTC reconciliation invariant (components must sum to CTC within ₹1) is asserted in 200+ property-based tests.
Sources
- EPFO — Employees Provident Fund & Miscellaneous Provisions Act 1952
- Section 10(13A) of the Income Tax Act 1961 — HRA exemption
- Payment of Gratuity Act 1972 — gratuity accrual rate
- State Professional Tax Acts (Maharashtra, Karnataka, etc.)
- Finance Act 2024 — standard deduction increase
Disclaimer. Actual take-home depends on the exact salary structure your employer chooses, mid-year revisions, joining bonuses, leave encashment, ESOP exercises, and any additional flexible benefits. This calculator gives a steady-state monthly average; consult your HR / payroll team for the exact monthly breakdown.