How to calculate take-home salary from CTC?+
Take-Home = Gross Salary – Employee PF (12% of basic) – Professional Tax – TDS. Gross Salary = Basic + HRA + Special Allowance + Other Allowances. Basic is typically 40-50% of CTC. HRA is 50% of basic (metro) or 40% (non-metro). The difference between CTC and take-home can be 20-35% due to these deductions.
What is the difference between CTC and in-hand salary?+
CTC (Cost to Company) includes everything the employer pays: your gross salary + employer PF contribution (12% of basic) + gratuity provision + insurance premiums + other benefits. In-hand salary is what you actually receive after deducting: employee PF, professional tax, and income tax (TDS). In-hand is typically 70-80% of CTC.
What is professional tax and who pays it?+
Professional tax is a state government levy on employment. It is deducted by the employer and paid to the state. Maximum professional tax is ₹2,500 per year (₹200/month). States that levy professional tax: Maharashtra, Karnataka, Tamil Nadu, Andhra Pradesh, Telangana, West Bengal, Gujarat, Madhya Pradesh. Delhi, Rajasthan, UP, Bihar do NOT have professional tax.
Is PF deduction mandatory for all employees?+
EPF is mandatory for establishments with 20+ employees, and for employees earning basic salary ≤ ₹15,000/month. Employees earning basic > ₹15,000 can opt out of PF. Employee contributes 12% of basic salary; employer contributes 12% (8.33% to EPS pension scheme + 3.67% to EPF). Both contributions are part of CTC.
How much HRA is tax-exempt?+
HRA exemption is the minimum of: (1) Actual HRA received, (2) 50% of basic salary (metro cities) or 40% (non-metro), (3) Actual rent paid minus 10% of basic salary. The exempt portion reduces your taxable income. This benefit is only available under the Old Tax Regime — HRA exemption is NOT available under the New Tax Regime.
What is the standard deduction for salaried employees in 2026?+
Salaried employees and pensioners get a standard deduction of ₹75,000 per year in FY 2025-26 under both old and new tax regimes (increased from ₹50,000 in Budget 2024). This is automatically deducted from gross salary to arrive at net salary for tax calculation. No proof or claim is required.