In hand salary is lower than CTC divided by 12 because CTC is everything your employer spends on you in a year, including its PF and a gratuity provision that are not paid out monthly. Your own PF, professional tax and income tax are then deducted from the rest. The table below shows monthly take home salary at ₹15 lakh to ₹40 lakh CTC, with PF on full wages and on the ₹25,000 a month ceiling in force since 17 September 2026.

What is in a CTC breakup?

A CTC breakup has three layers: fixed monthly pay (your gross salary: basic, HRA and special allowance), costs the employer pays for you but not to you (its PF, a gratuity provision, any group health cover), and variable pay, usually annual.

Under the labour codes in force since 21 November 2025, PF and gratuity are calculated on "wages": basic plus dearness allowance, plus the amount by which allowances and the employer's PF exceed half of total pay, where total pay counts the employer's PF but not gratuity.

How does Aarav's ₹25 lakh CTC become ₹1,56,700 a month?

Aarav is offered ₹25,00,000 fixed CTC and expects a twelfth, ₹2,08,333, each month. His first credit is about ₹1,56,700.

His basic is below half of his total pay, so his PF wages are set at that half; the employer's PF is 12% of wages and gratuity is shown at 4.81% of wages. On those rules his gross salary is ₹22,94,810 a year, employer PF ₹1,46,477 and gratuity ₹58,713, which add up to ₹25,00,000. His PF wages are ₹1,01,720 a month: half of ₹24,41,287, the year's gross plus employer PF, divided by 12.

His gross salary is ₹1,91,234 a month, about ₹17,100 below that twelfth.

His own PF is 12% of wages, ₹12,206 a month. Professional tax is ₹2,500 a year, about ₹208 a month. Under the new regime for FY 2026-27, his taxable salary is ₹22,94,810 minus the ₹75,000 standard deduction, ₹22,19,810. Slab tax on it is ₹2,54,953, plus 4% cess, ₹2,65,151 a year, or ₹22,096 a month.

His salary after tax and PF: ₹1,91,234 minus ₹12,206, ₹208 and ₹22,096 is ₹1,56,724.

If PF is paid only on the ₹25,000 ceiling, ₹3,000 a month from each side, the employer adds the ₹1,10,477 it saves to his salary. His gross salary rises to ₹24,05,287, tax on it to ₹2,93,875, and his take home to about ₹1,72,700, but his PF gets ₹18,413 a month less. On the same structure, ₹15 lakh CTC leaves about ₹1,00,700 a month and ₹40 lakh about ₹2,29,100.

What is the take home salary at ₹15 lakh to ₹40 lakh CTC?

The table uses Aarav's structure for FY 2026-27: no variable pay, no group insurance or PF admin charges, and the new regime. Gross salary and tax are for PF on full wages.

CTC Gross salary a year Tax on salary a year In hand a month, PF on full wages In hand a month, PF on ₹25,000 ceiling
₹15 lakh ₹13,76,900 ₹78,300 ₹1,00,700 ₹1,08,700
₹20 lakh ₹18,35,800 ₹1,58,300 ₹1,29,800 ₹1,41,900
₹25 lakh ₹22,94,800 ₹2,65,200 ₹1,56,700 ₹1,72,700
₹30 lakh ₹27,53,800 ₹3,99,000 ₹1,81,400 ₹2,01,000
₹40 lakh ₹36,71,700 ₹6,85,400 ₹2,29,100 ₹2,57,000

The PF choice moves the figure most: the gap between the two columns is about ₹8,000 a month at ₹15 lakh CTC and about ₹27,900 at ₹40 lakh, while the PF credit falls by more than the gap. This is one common structure; treat your row as an estimate.

Subtract your monthly spending from your row, then put what is left into the FI calculator to see when investing it could make you financially independent.

How is income tax on your salary worked out?

For FY 2026-27 the new regime is the default; you can still choose the old one in a return filed by the due date, and telling your employer only sets the monthly deduction. Your employer estimates the year's tax on your salary, not your CTC, and deducts it monthly as TDS, shown in your Form 16 (Form No. 130 from 2026-27). The rebate cancels tax up to ₹12 lakh of taxable income, so a salary up to ₹12,75,000 carries none, and marginal relief softens the tax just above it; beyond that, slabs rise to 30% above ₹24 lakh of taxable income.

How can you estimate take home before accepting an offer?

First, remove from the CTC employer PF, gratuity, insurance, variable pay and any joining bonus, and divide the rest by 12 for gross monthly salary.

Second, subtract your own PF: 12% of your PF wages, which are your basic, or half of your gross salary and employer PF together if basic is lower. On the ₹25,000 ceiling it is ₹3,000 a month. Third, subtract professional tax, ₹200 a month in many states and nil in some. Fourth, estimate tax under your chosen regime and divide by 12.

With PF on full wages, a basic above half of total pay means more PF and less cash, as the salary components post shows. Your in hand figure is what the 50-30-20 budgeting rule splits.

Dhi puts your salary in one view with your net worth, protection and goals, and maps the PF your CTC sets aside to your goals as an investment, not lost pay. Dhi nudges you when that view needs attention and takes no commissions.

Frequently asked questions

Variable pay such as an annual bonus is added in the month it is paid, and in states such as Karnataka and Maharashtra professional tax is ₹300 instead of ₹200 in February. Tax deducted can also change during the year once you submit or revise your declarations and proofs, because your employer recalculates the year's tax and spreads the balance over the remaining months. Arrears from a backdated raise arrive as a one-time addition and can raise that month's deductions too.
About ₹1,81,400 a month if PF is paid on full wages, or about ₹2,01,000 if PF is paid on the ₹25,000 ceiling, with no variable pay, the new tax regime for FY 2026-27 and PF wages at half of total pay. Your own PF is about ₹14,600 a month on full wages and ₹3,000 on the ceiling, so the ceiling's extra cash comes out of what you save in PF. Group insurance, PF admin charges, a different professional tax or a variable component inside the CTC will move the figure.
It can. The regime you tell your employer decides how much tax is deducted each month, though the final choice is made in your return. At ₹25 lakh CTC, your own PF on full wages is ₹1,46,477 a year, which already fills most of the ₹1,50,000 limit under section 80C of the 1961 Act (section 123 of the 2025 Act), so the old regime turns mainly on rent and home-loan interest; compare both before you tell your employer.

This is general information for salaried individuals in India, not personalised financial advice.