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

CTC is what you cost your employer, not what they pay you. It includes their PF contribution and a gratuity provision, neither of which lands in your account each month, and it is stated before income tax and your own PF deduction. How big the gap is depends on the income level — where the 87A rebate wipes out tax it is mostly PF; at higher incomes tax widens it well past 25%.

Is the employer’s PF contribution my money?

Yes, but not now. It goes into your EPF and pension accounts and is genuinely yours. It simply is not spendable this month, which is why counting it as salary when planning your rent is a mistake.

Tax year 2026-27 · was AY 2027-28

CTC to In-Hand Salary Calculator

See what a CTC figure actually pays into your bank account each month, and which parts of it never reach you at all.

Your numbers

Nothing you type here leaves your device as you work. Saving is the only thing that sends it anywhere, and only when you ask.

Annual CTC

₹

₹12 lakh

The headline figure on your offer letter.

Tax regime

Basic as % of CTC

Check your offer letter — employers vary this a lot, and it changes PF and HRA.

I live in Delhi, Mumbai, Kolkata or Chennai

For HRA, "metro" means only those four cities.

Annual professional tax

₹

₹2.4 thousand

State-levied. Some states charge none.

₹ MoneyLingo · moneylingo.in

CTC to In-Hand Salary Calculator

Worked out on 13/8/2026

What produced these results
Annual CTC	1200000
Tax regime	new
Basic as % of CTC	40
Monthly rent you pay	0
Annual professional tax	2400

My scenarios (0/10)

Snapshots of your inputs, so you can flip between them — “20 years at 9%” against “15 years at 9.5%”. Stored in this browser only, no account needed.

Monthly in-hand

₹91,277

91% of your CTC reaches your account

Annual in-hand: ₹10,95,323
Gross salary: ₹11,55,323
Income tax for the year: ₹0
Never reaches your account: ₹44,677
HRA exemption: ₹0
Gap between CTC and in-hand: ₹1,04,677

Your CTC, honestly

91%

Reaches your bank₹10,95,323
Income tax₹0
Your PF (still yours)₹60,000
Never reaches you₹44,677

Employer PF and the gratuity provision are counted in your CTC. They are yours eventually — just not this month.

What makes up the CTC

Component	Annual	Monthly	Reaches your bank?
Basic salary	₹4,80,000	₹40,000	Yes
House Rent Allowance	₹1,92,000	₹16,000	Yes
Special allowance	₹4,83,323	₹40,277	Yes
Employer's PF contribution	₹21,600	₹1,800	No
Gratuity provision	₹23,077	₹1,923	No

What comes off

Deduction	Annual	Monthly
Your PF contribution	₹57,600	₹4,800
Income tax (TDS)	₹0	₹0
Professional tax	₹2,400	₹200

What this means

₹44,677 of this CTC never reaches your bank account. It is real money set aside for you, but you cannot spend it this year.
Under the new regime, HRA and 80C are not available. The higher standard deduction and wider slabs are the trade.
Employers structure CTC differently. Use the basic and HRA shares from your own offer letter rather than the defaults, or the answer will be approximately right and specifically wrong.

Questions people actually ask

Why is my in-hand salary so much lower than my CTC?: CTC is what you cost your employer, not what they pay you. It includes their PF contribution and a gratuity provision, neither of which lands in your account each month, and it is stated before income tax and your own PF deduction. How big the gap is depends on the income level — where the 87A rebate wipes out tax it is mostly PF; at higher incomes tax widens it well past 25%.
Is the employer’s PF contribution my money?: Yes, but not now. It goes into your EPF and pension accounts and is genuinely yours. It simply is not spendable this month, which is why counting it as salary when planning your rent is a mistake.