How to Calculate In-Hand Salary from CTC (FY 2025-26)
Your offer letter says ₹12,00,000 CTC — but how much actually hits your bank account every month? The gap between Cost‑to‑Company and take‑home pay confuses many employees. It’s driven by tax slabs, PF deductions, professional tax, and the standard deduction. Under the new tax regime for FY 2025-26, employees with a taxable income up to ₹12,00,000 pay zero tax thanks to the Section 87A rebate. In this article we break down the exact calculation using a real example, so you can forecast your monthly in‑hand pay.
What is deducted from your CTC?
Your CTC includes everything the employer spends on you: basic salary, allowances, employer PF, gratuity, and sometimes variable components. To get your gross salary, subtract employer PF (12% of basic). From gross, subtract employee PF, professional tax, and income tax to get your annual take‑home. The monthly in‑hand is that figure divided by 12.
- Gross salary = CTC − Employer PF
- Taxable income = Gross salary − ₹75,000 standard deduction
- Tax = computed from the slab table below
- Annual in‑hand = Gross − Employee PF − Professional Tax − Tax
New tax regime slabs FY 2025-26
| Income Slab (₹) | Tax Rate |
|---|---|
| 0 – 4,00,000 | Nil |
| 4,00,001 – 8,00,000 | 5% |
| 8,00,001 – 12,00,000 | 10% |
| 12,00,001 – 16,00,000 | 15% |
| 16,00,001 – 20,00,000 | 20% |
| 20,00,001 – 24,00,000 | 25% |
| Above 24,00,000 | 30% |
Plus 4% health & education cess. Section 87A rebate: if taxable income ≤ ₹12,00,000, tax becomes zero.
Step-by-step: calculate your in‑hand salary
- Open the In-Hand Salary Calculator tool.
- Enter your annual CTC (e.g., 12,00,000). Set the basic salary percentage (default 50%) and your monthly professional tax (default ₹200).
- The tool automatically computes gross salary, taxable income, and tax using the new regime slabs.
- Review the result — monthly in‑hand, annual take‑home, total tax, and monthly employee PF.
Worked example: CTC ₹12,00,000
Let’s assume basic = 50% of CTC = ₹6,00,000. Employer PF = 12% of basic = ₹72,000. Gross salary = 12,00,000 − 72,000 = ₹11,28,000. Employee PF = ₹72,000. Professional tax = ₹200 × 12 = ₹2,400. Taxable income = 11,28,000 − 75,000 = ₹10,53,000. Tax before rebate = 0 on first 4L + 5% on next 4L (₹20,000) + 10% on remaining 2,53,000 (₹25,300) = ₹45,300. Cess 4% = ₹1,812. Total tax = ₹47,112. But since taxable income ≤ ₹12,00,000, the 87A rebate kicks in and tax becomes ₹0. Annual in‑hand = 11,28,000 − 72,000 − 2,400 − 0 = ₹10,53,600. Monthly in‑hand ≈ ₹87,800. Use the calculator to verify.
Frequently Asked Questions
Does the new regime offer any other deductions?
No, under the new regime you cannot claim HRA, 80C, or other deductions. Only the ₹75,000 standard deduction is available. That’s why many taxpayers still compare with the old regime using our HRA calculator.
Is professional tax deducted every month?
Yes, in states where it applies, ₹200–250 is deducted monthly from your salary. The exact amount varies by state; some states have no professional tax at all.
What if my basic is less than 50% of CTC?
Then your PF contribution will be lower, and your take‑home may increase slightly. However, a lower basic also reduces your employer’s PF contribution and future EPF corpus.
Can I switch between old and new regime mid‑year?
Salaried employees can choose the regime at the start of the financial year. If you haven’t opted out of the new regime, it applies by default. Use a tax‑planning tool before making a final decision.
Is it free and private?
Yes — the tool runs entirely in your browser, free, with no sign‑up and nothing uploaded to a server.
Try the In-Hand Salary Calculator