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Indian Salary Calculator: How CTC Becomes Take-home
In India, the salary number on your offer letter (CTC — Cost to Company) is rarely the amount that hits your bank account. A ₹12 lakh CTC typically becomes ₹75,000–₹85,000 monthly in-hand once Provident Fund, Professional Tax, and TDS (income tax deducted at source) come out. This calculator walks through that translation step-by-step so you know exactly what to expect on the 1st of every month.
The Wendesk salary calculator handles both the old and new tax regimes (the new regime is the default since FY 2023-24), applies the 4% Health & Education cess automatically, models your HRA exemption based on metro vs non-metro city, and respects the simplified FY 2024-25 slabs published in the Union Budget.
Understanding Indian Salary Structure
A standard Indian salary breaks into four components:
- Basic salary — Usually 40–50% of CTC. The foundation everything else is calculated on (PF, HRA, gratuity). A higher basic = higher take-home in retirement but lower in-hand today (PF goes up).
- HRA (House Rent Allowance) — Typically 40–50% of basic. Tax-exempt up to a limit if you pay rent and provide rent receipts (more on this below).
- Special allowance — The flexible bucket that fills the remaining CTC. Fully taxable, no exemptions.
- Employer contributions — Employer’s share of PF (12% of basic) and gratuity (4.81% of basic) — these count in CTC but never appear in your bank account; they go into your retirement corpus.
Old vs New Tax Regime in India (2026)
New Regime (FY 2024-25, default since FY 2023-24)
Lower slabs, but no HRA / 80C / 80D / standard-deduction beyond ₹75,000:
- Up to ₹3 lakh — Nil
- ₹3–7 lakh — 5%
- ₹7–10 lakh — 10%
- ₹10–12 lakh — 15%
- ₹12–15 lakh — 20%
- Above ₹15 lakh — 30%
Old Regime (still available)
Higher slabs, but all classical deductions allowed (80C up to ₹1.5L, HRA, 80D, home-loan interest, etc.):
- Up to ₹2.5 lakh — Nil
- ₹2.5–5 lakh — 5%
- ₹5–10 lakh — 20%
- Above ₹10 lakh — 30%
Quick rule of thumb: if you actively use ₹3 lakh+ of deductions (80C maxed + HRA + 80D), old regime usually wins. If your deductions are under ₹1.5 lakh, the new regime almost always wins. The Wendesk calculator computes both — switch the toggle to compare.
PF, ESI, Professional Tax — What Gets Deducted
- Provident Fund (EPF) — 12% of basic salary from employee + 12% from employer. Capped at ₹15,000 basic statutorily, but most companies apply on actual basic. PF interest is currently 8.25% per annum (tax-free up to certain limits).
- ESI (Employees’ State Insurance) — 0.75% from employee + 3.25% from employer if monthly gross is below ₹21,000. Most salaried professionals are outside this bracket.
- Professional Tax — A state-level levy of ₹150–₹250 per month in most states (Karnataka, Maharashtra, West Bengal, Andhra Pradesh, Tamil Nadu). Five states (including Haryana, Delhi, UP) have no PT.
- TDS — Income tax deducted at source by your employer. The calculator estimates a monthly average; actual TDS varies month-to-month based on annual projections and Form-12BB declarations.
For real payroll runs — including statutory filings (PF ECR, ESI MC, PT challans, TDS 24Q), Form-16 issuance, and variable-pay processing — check Wendesk Team Ops. This calculator is for take-home projection only.
HRA Exemption — Metro vs Non-Metro
Under Section 10(13A) of the Income Tax Act, your HRA exemption is the lowest of three:
- Actual HRA received
- Rent paid minus 10% of basic salary
- 50% of basic (metro: Delhi, Mumbai, Kolkata, Chennai) OR 40% of basic (non-metro everywhere else)
Worked example: Basic ₹40,000/mo, HRA ₹20,000/mo, rent ₹18,000/mo in Bangalore (non-metro). Three values: ₹20,000 actual HRA, ₹14,000 (rent − 10% basic), ₹16,000 (40% basic). Lowest is ₹14,000 — that’s the monthly tax exemption. Available only under the old regime.
Salary Calculator FAQs
What is CTC?
Cost to Company — the total annual amount your employer spends on you, including basic, HRA, special allowance, employer PF contribution, employer gratuity contribution, performance bonuses, and any other benefits. It is NOT what hits your bank account.
Is my employer’s PF contribution counted in my CTC?
Yes — almost always. Indian employers report employer-side PF (12% of basic) and gratuity (4.81% of basic) as part of CTC. These never appear in your bank account; they accumulate in your EPFO retirement corpus.
How do I choose between old and new regime?
Compute your annual deductions (80C investments, HRA exemption, home-loan interest under 80EE/24, 80D health insurance, 80CCD NPS, etc.). If they exceed ₹3 lakh, old regime is usually better. Under ₹1.5 lakh, new regime wins. Between, use this calculator’s toggle to see both side by side.
What is Professional Tax?
A monthly state-level levy on salaried employees, deducted by the employer and remitted to the state government. Rates and applicability vary: Maharashtra ₹200/mo for income above ₹10,000/mo; Karnataka ₹200/mo above ₹15,000/mo; Delhi / Haryana / Uttar Pradesh have no PT.
Do I get HRA exemption if I own my home?
No — HRA exemption requires you to actually pay rent. If you own and live in your home you can’t claim HRA, but you can claim home-loan principal under 80C and home-loan interest under Section 24 (up to ₹2 lakh/year for self-occupied) — both of which can save more tax than HRA depending on your loan size.
What deductions apply if I work from home?
The same as if you work from an office — HRA exemption continues as long as you pay rent (provide receipts), 80C limits stay the same, standard deduction (₹50,000 old / ₹75,000 new) applies. There is no separate “home office” deduction for salaried employees in India.
When does TDS get deducted?
Every month, before your salary hits your account. Your employer estimates your annual tax liability at the start of the financial year based on your declarations, divides by 12, and deducts that amount each month. Submit Form 12BB with proof of investments before the deadline (typically January) to align actual TDS with your real tax liability.
When to Use This Calculator
- Joining a new company — translate the offer CTC into expected take-home before signing
- Salary negotiation — model how a ₹2 lakh hike actually flows to your bank account
- Tax regime selection — compute old vs new each April before locking your declaration with payroll
- Restructuring CTC — model the effect of shifting Basic from 40% to 50% on PF + take-home
- Year-end planning — see how much 80C / 80D / NPS additions would save under old regime
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