CTC vs In-Hand Salary: Why Your Take-Home Is Lower

Last updated: October 2026

Your offer letter shows a big CTC number, but your bank credit each month is noticeably smaller. That gap is normal, and once you see where the money goes, it stops being a surprise.

Two layers of deductions

Part of your CTC is never paid to you monthly. Your employer's PF contribution (usually 12% of Basic) and a gratuity provision (about 4.81% of Basic) are counted in CTC but go into your PF account and a future gratuity payout. CTC minus these gives your gross salary.

Then your own deductions come out of gross salary: your PF contribution (12% of Basic), professional tax (around ₹2,400 a year in most states that levy it), and income tax deducted as TDS. What's left is your take-home.

Typical take-home at different CTCs

Assuming Basic is 50% of CTC, the new tax regime and Karnataka professional tax:

Take-home is roughly 85% of CTC up to ₹12 lakh, then falls to around 75-80% as income tax kicks in.

Ways to raise your take-home

Work out your own take-home payOpen the calculator →

Frequently asked questions

What percentage of CTC is in-hand salary?+

Usually around 75-85% of CTC, depending on how Basic is set, your tax regime and your income level. It's higher at lower incomes where little or no income tax applies.

Why is employer PF part of my CTC?+

Your employer counts its PF contribution as part of the cost of employing you. It goes into your PF account rather than your bank each month, so it's part of CTC but not part of take-home.

Is professional tax charged everywhere?+

No. States such as Karnataka, Maharashtra and Tamil Nadu levy it (up to about ₹2,500 a year), while states like Delhi, Haryana and Uttar Pradesh don't.

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