Cost to Company (CTC) is the total annual expenditure a company incurs to employ you. It includes your basic salary, allowances (HRA, LTA, Special Allowance), employer's Provident Fund contribution, gratuity accrual, and any other benefits like medical insurance premiums.
Your in-hand (take-home) salary is what actually reaches your bank account every month after deducting employee PF (12% of Basic), Professional Tax (₹2,400–₹2,500/year in most states), and TDS (Tax Deducted at Source based on your chosen tax regime). For most Indian salaried professionals, in-hand salary works out to 65–80% of CTC depending on the salary structure and tax obligations.
The tax regime you declare to your employer at the start of the financial year directly determines your monthly TDS deduction. Under the Old Regime, if you have significant investments (PPF, ELSS, LIC — up to ₹1.5L under 80C), home loan interest (up to ₹2L under 24b), and HRA exemption, the Old Regime can substantially lower your taxable income and hence your monthly TDS — boosting your take-home. Under the New Regime, there are no deductions (except a ₹75,000 standard deduction), but the lower slab rates mean lower TDS for those with minimal investments. Use this calculator with the regime toggle to instantly see which option increases your monthly in-hand salary.
Both you and your employer contribute 12% of your Basic Salary to the Employees' Provident Fund (EPF). The employer's 12% is part of your CTC but is not received as salary — it goes directly into your EPF account. Your own 12% is deducted from your gross salary. For a Basic Salary of ₹30,000/month, this means ₹3,600/month is deducted from your gross pay toward EPF, reducing your take-home. The accumulated EPF corpus, however, earns 8.25% interest (FY 2024-25) tax-free, making it one of the best risk-free savings instruments in India.