# CTC to In-Hand Salary: How to Calculate Your Take-Home Pay in India (2026) > Confused by CTC vs in-hand salary? Learn exactly how to calculate take-home pay in India — PF, professional tax, TDS, gratuity explained — with a worked example for a Rs 5.5 LPA CTC, plus a free calculator. Source: https://edesy.in/blog/ctc-to-in-hand-salary-calculator-india-2026 You get an offer for **Rs 5.5 LPA** and assume that's roughly Rs 45,000 a month in your account. Then the first salary lands — and it's noticeably less. The gap between the **CTC** on your offer letter and the **in-hand salary** in your bank is the single most misunderstood thing in Indian compensation. This guide explains exactly what CTC includes, why your take-home is lower, and how to calculate it — with a worked example. To skip the maths, use the free **[salary calculator](https://edesy.in/tools/salary-calculator)** to convert any CTC to monthly in-hand instantly. ## CTC vs Gross vs Net (in-hand) — the three numbers - **CTC (Cost to Company)** = everything the company spends on you in a year, including parts you never see in your bank account (employer PF contribution, gratuity, sometimes insurance premiums). - **Gross salary** = CTC minus the employer-side contributions and benefits — your salary before deductions. - **Net / in-hand salary** = gross minus *your* deductions (employee PF, professional tax, income tax/TDS). **This is what actually reaches your account.** So the journey is: **CTC → (remove employer costs) → Gross → (remove your deductions) → In-hand.** ## What's inside CTC A typical CTC is built from: | Component | Counts toward CTC | Reaches your bank? | |---|---|---| | Basic salary | Yes | Yes (taxable) | | HRA (House Rent Allowance) | Yes | Yes (partly tax-exempt if you pay rent) | | Special / other allowances | Yes | Yes | | Employer PF contribution | Yes | No — goes to your EPF account | | Gratuity | Yes | No — paid only after 5 years of service | | Performance bonus / variable pay | Yes | Only when paid out, often partly | | Insurance premium | Yes | No — it's a benefit, not cash | The items marked "No" are why CTC always looks bigger than the money you can spend. ## The deductions that lower your in-hand From your gross, these come out monthly: 1. **Employee PF** — 12% of basic salary, deducted from your side (your employer adds a matching 12%, which sits in CTC). 2. **Professional Tax** — a small state-level tax (e.g. up to Rs 200/month in many states); not levied in every state. 3. **Income Tax (TDS)** — deducted monthly based on your tax slab, regime (old vs new), and declared investments. 4. **Other** — any voluntary deductions (NPS, top-up insurance, loan EMIs via employer). ## Worked example: Rs 5.5 LPA CTC Here's a representative breakdown (your exact numbers depend on how the company structures basic/allowances and your tax declarations): - **CTC:** Rs 5,50,000/year ≈ Rs 45,833/month. - **Less employer PF + gratuity** (employer-side, never in your account): roughly Rs 25,000–35,000/year → **Gross ≈ Rs 5.15–5.25 LPA**. - **Less employee PF** (12% of basic): if basic is ~Rs 2.2 LPA, that's ~Rs 26,400/year. - **Less professional tax:** ~Rs 2,400/year (state-dependent). - **Less TDS:** often **zero or minimal** at this level under the new regime, thanks to the standard deduction and rebate. **Result:** in-hand typically lands around **Rs 38,000–41,000/month** for a Rs 5.5 LPA CTC — not the Rs 45,800 the headline suggests. The exact figure swings with your basic-pay ratio and tax regime, which is why a calculator beats a rule of thumb. > Get your precise number: the **[salary calculator](https://edesy.in/tools/salary-calculator)** converts CTC to monthly in-hand, accounting for PF, professional tax, and TDS. ## How to read a job offer like a pro - **Ask for the salary structure**, not just the CTC — the basic-to-allowance split changes both your PF and your tax. - **Separate fixed from variable.** A CTC padded with a large "performance bonus" means lower guaranteed monthly cash. - **Spot the non-cash items.** Employer PF, gratuity, and insurance inflate CTC but don't hit your account. - **Check the tax regime.** The new regime's standard deduction and rebate often make lower-CTC offers nearly tax-free. ## For HR teams and employers If you *issue* offers and payslips, getting this right (and explaining it to candidates) reduces offer-stage confusion and drop-offs. Tools that help: - ⚠️ Generate compliant **[salary slips](https://edesy.in/tools/salary-slip-generator)** and **[experience letters](https://edesy.in/tools/experience-letter-generator)** in minutes. - For high-volume hiring, ⚠️ an [AI voice agent](https://edesy.in/ai-voice-agent) can screen and update candidates at scale — useful when you're running offers across many roles. ## Frequently asked questions ### If CTC is 5.5 lakhs, what is the net salary? Roughly Rs 38,000–41,000/month in-hand, depending on your basic-pay ratio, state professional tax, and tax regime. Calculate your exact figure with the [salary calculator](https://edesy.in/tools/salary-calculator). ### Why is my in-hand salary less than my CTC? Because CTC includes employer-side costs (PF, gratuity, insurance) that never reach your account, plus your own deductions (employee PF, professional tax, TDS) come out of gross. ### What is the difference between gross and net salary? Gross is your salary before your deductions; net (in-hand) is what's left after employee PF, professional tax, and income tax. ### Does a higher basic salary mean lower in-hand? A higher basic raises your PF deduction (12% of basic), which slightly lowers monthly in-hand — but it builds your retirement corpus and can affect HRA exemption. It's a trade-off, not a loss. ### Is TDS deducted on a Rs 5.5 LPA salary? Often little or none under the new tax regime, thanks to the standard deduction and rebate — but it depends on your declarations and regime choice. --- **Know your real take-home →** [Free CTC to in-hand salary calculator](https://edesy.in/tools/salary-calculator) — enter your CTC, get your monthly in-hand with PF, professional tax, and TDS accounted for.