Find out your in-hand monthly salary after tax, PF and other deductions using India’s new tax regime (FY 2025-26). Just enter your annual CTC.
How Take-Home Salary Is Calculated
This calculator uses India’s new tax regime for FY 2025-26 (the default regime for most salaried employees). It assumes Basic Pay is 40% of CTC, applies employer and employee PF contributions, a standard deduction of Rs. 75,000, and calculates tax using the new regime slabs plus 4% health and education cess.
New Regime Tax Slabs (FY 2025-26)
- Up to Rs. 4,00,000: Nil
- Rs. 4,00,001 – 8,00,000: 5%
- Rs. 8,00,001 – 12,00,000: 10%
- Rs. 12,00,001 – 16,00,000: 15%
- Rs. 16,00,001 – 20,00,000: 20%
- Rs. 20,00,001 – 24,00,000: 25%
- Above Rs. 24,00,000: 30%
Income up to Rs. 12,00,000 pays zero tax under the new regime due to Section 87A rebate.
What Your CTC Is Actually Made Of
CTC is the employer’s total cost, not your salary. A meaningful part of it never reaches your bank account at all. A typical structure looks like this:
| Component | Typical share | Reaches your account? |
|---|---|---|
| Basic pay | 40 to 50 percent of CTC | Yes, after deductions |
| HRA | 40 to 50 percent of basic | Yes |
| Special allowance | The balancing figure | Yes |
| Employer PF | 12 percent of basic | No, goes to your PF account |
| Gratuity provision | About 4.81 percent of basic | No, payable after 5 years of service |
| Insurance premium | Varies | No, paid to the insurer |
Worked Example: Rs. 12,00,000 CTC
Assuming basic is 40 percent of CTC and the new regime applies:
- Basic: Rs. 4,80,000
- Employer PF at 12 percent of basic: Rs. 57,600, deducted from CTC
- Gratuity provision at 4.81 percent of basic: Rs. 23,088, deducted from CTC
- Gross salary: 12,00,000 – 57,600 – 23,088 = Rs. 11,19,312
- Less standard deduction of Rs. 75,000, giving taxable income of about Rs. 10,44,312
- Tax under the new regime: nil, because the Section 87A rebate covers income up to Rs. 12,00,000
- Employee PF at 12 percent of basic: Rs. 57,600 for the year
- Annual take-home: about Rs. 10,61,712, roughly Rs. 88,476 per month
Note that the take-home is around 88 percent of CTC even with zero income tax. The gap is entirely employer PF, gratuity and your own PF contribution.
New Regime or Old Regime?
The new regime has lower rates but removes most exemptions. The old regime has higher rates but allows deductions. Which wins depends entirely on how much you can actually claim.
| Choose the new regime if | Consider the old regime if |
|---|---|
| You have few or no deductions | You pay significant rent and can claim HRA |
| You do not pay rent, or live in your own home | You are repaying a home loan with substantial interest |
| You prefer simplicity and higher liquidity | You already invest heavily under Section 80C |
| Your income is within the rebate threshold | Your total deductions are large relative to income |
A useful rule of thumb: the old regime tends to win only when your total claimable deductions are large. Below that, the new regime’s lower rates and higher rebate usually come out ahead. Run both before choosing, since the choice can be made each year for salaried employees.
What You Can Still Claim Under the New Regime
The new regime removes most exemptions, but not all:
- Standard deduction on salary income
- Employer’s NPS contribution under Section 80CCD(2), which is one of the few meaningful planning tools left
- Employer PF contribution, within the prescribed limits
Not available under the new regime: HRA exemption, LTA, Section 80C investments, Section 80D health insurance premiums, and home loan interest on a self-occupied property.
Common Misunderstandings
- Reading CTC as salary. Take-home is typically 80 to 90 percent of CTC even before income tax, because of employer PF and gratuity.
- Assuming zero tax means full CTC in hand. PF deductions continue regardless of your tax position.
- Choosing a low basic to maximise monthly cash. It reduces PF, gratuity and, on the old regime, your HRA exemption.
- Ignoring professional tax and other state levies. Small, but they reduce monthly take-home in states that levy them.
Frequently Asked Questions
What is the difference between CTC and take-home salary?
CTC is the employer’s total cost, including components that never reach your bank account such as employer PF contribution, the gratuity provision and insurance premiums. Take-home is what actually lands in your account after those and after tax and your own PF contribution. Take-home is typically 80 to 90 percent of CTC even when no income tax is payable.
How is take-home salary calculated from CTC?
Start with CTC, subtract employer PF (12 percent of basic) and the gratuity provision (about 4.81 percent of basic) to get gross salary. Subtract the standard deduction to find taxable income, calculate tax, then also subtract your own PF contribution and any professional tax. What remains is your annual take-home.
Why is my take-home less than CTC minus tax?
Because CTC includes employer contributions that were never yours to receive. Employer PF goes into your provident fund account and the gratuity provision is only payable after five years of continuous service. Your own 12 percent PF contribution is then deducted from gross salary before you are paid.
Is the new tax regime better than the old regime?
It depends on how much you can genuinely claim in deductions. The new regime has lower rates and a higher rebate threshold but removes HRA, LTA, Section 80C and most other exemptions. If you pay significant rent or are repaying a home loan, the old regime may still win. Salaried employees can choose each year, so it is worth calculating both.
Why does basic pay matter so much in my salary structure?
Because PF, gratuity and HRA exemption are all calculated as a percentage of basic pay. A structure with a low basic increases your immediate monthly cash but reduces your provident fund accumulation, your eventual gratuity, and on the old regime the HRA exemption you can claim.
What deductions can I still claim under the new regime?
The standard deduction on salary income, the employer’s NPS contribution under Section 80CCD(2), and employer PF within prescribed limits. HRA exemption, LTA, Section 80C investments, Section 80D health insurance and home loan interest on a self-occupied property are not available under the new regime.
Does this calculator include HRA exemption?
No. It assumes the new tax regime, which does not permit HRA exemption. If you are on the old regime and claiming HRA, your taxable income will be lower than this calculator shows, and you should use a dedicated HRA exemption calculator alongside an old-regime tax calculation.