In-Hand Pay.
Convert your Gross CTC into actual bank credit. India's most precise net-pay analysis engine for salaried professionals — EPF, PT, TDS, New Regime & Old Regime, all in one place.
Analyzing Pay Structure...
The Net Pay Workflow
Gross Breakdown
Identify Basic, HRA, LTA, Medical, and Special Allowances. These form the taxable and exempt components of your Gross Salary.
Statutory Cuts
EPF (12% Basic), Professional Tax (state-wise), and ESI (if salary < ₹21,000/month) are deducted before tax calculation.
Tax Optimization
Apply standard deduction, HRA exemption (Old Regime), 80C/80D investments to minimize monthly TDS withheld by your employer.
Net Credit
The final amount wired to your salary account. This is your starting point for budgeting, EMI planning, and investment allocation.
Gross vs In-Hand
Understanding your In-Hand Salary is the single most important financial literacy step for any salaried Indian professional. Most employers quote a high CTC (Cost to Company) that bundles non-cash benefits — yet your actual monthly bank credit is often 65–80% of that CTC figure.
The gap isn't sleight of hand. CTC legitimately includes the Employer's EPF contribution (12% of Basic), Gratuity accrual (~4.81% of Basic), group health insurance premiums, canteen subsidies, and other perks. None of these hit your account monthly.
Budget 2025 Update: The standard deduction under the New Tax Regime has been raised from ₹50,000 to ₹75,000. For most salaried taxpayers, this alone saves ₹7,500–₹22,500 in annual tax depending on their slab.
Our engine dissects every component — Basic, HRA, LTA, Medical, Special Allowance — and applies current FY 2025-26 rules to give you the exact post-deduction number that actually lands in your account each month.
The Paycheck Math
Core Net Salary Formula
Net Salary = Gross Salary − (EPF + PT + TDS)- Gross SalaryBasic + HRA + Special Allowances + LTA + Medical + Bonus (monthly share).
- EPF12% of (Basic + DA) as employee contribution. Employer matches, but doesn't affect your take-home.
- PTProfessional Tax — state-specific monthly deduction. Zero in Delhi, UP; ₹200–₹300/month in Maharashtra, Karnataka.
- TDSTax Deducted at Source — your employer divides estimated annual tax by 12 and deducts monthly.
Complete CTC → In-Hand Derivation
- Start with Annual CTC — the number on your offer letter.
- Subtract Employer EPF (12% of Basic) and Gratuity (~4.81% of Basic) — these form part of CTC but aren't monthly cash.
- Result = Annual Gross Salary — your total annual cash earnings.
- Apply Standard Deduction (₹75,000 New / ₹50,000 Old) and applicable exemptions (HRA, LTA under Old Regime).
- Apply 80C / 80D / 80CCD deductions if using Old Regime.
- Result = Net Taxable Income — on which slab rates are applied.
- Calculate Tax Liability → Apply Section 87A rebate if applicable → Add 4% Cess.
- Divide tax by 12 = Monthly TDS deducted from your payslip.
- Monthly In-Hand = Monthly Gross − Employee EPF − PT − Monthly TDS.
Tax Slabs FY 2025-26
New Tax Regime
Default from FY24| Income Range | Rate |
|---|---|
| Up to ₹4,00,000 | Nil |
| ₹4,00,001 – ₹8,00,000 | 5% |
| ₹8,00,001 – ₹12,00,000 | 10% |
| ₹12,00,001 – ₹16,00,000 | 15% |
| ₹16,00,001 – ₹20,00,000 | 20% |
| ₹20,00,001 – ₹24,00,000 | 25% |
| Above ₹24,00,000 | 30% |
Old Tax Regime
Opt-in Required| Income Range | Rate |
|---|---|
| Up to ₹2,50,000 | Nil |
| ₹2,50,001 – ₹5,00,000 | 5% |
| ₹5,00,001 – ₹10,00,000 | 20% |
| Above ₹10,00,000 | 30% |
Key Deductions Available
- • 80C: ₹1.5L (PPF, ELSS, LIC, EPF top-up)
- • 80D: ₹25K–₹50K (health insurance)
- • 80CCD(1B): ₹50K (NPS extra)
- • 24(b): ₹2L (home loan interest)
- • HRA: Actual exemption
Regime Deep Dive
| Feature | New Regime DEFAULT | Old Regime |
|---|---|---|
| Standard Deduction | ₹75,000 | ₹50,000 |
| HRA Exemption | Not Available | Available (Sec 10-13A) |
| 80C Deduction | Not Available | Up to ₹1,50,000 |
| 80D (Health Ins.) | Not Available | Up to ₹25,000–50,000 |
| Home Loan Interest | Not Available | Up to ₹2,00,000 |
| Section 87A Rebate | Up to ₹7L taxable income | Up to ₹5L taxable income |
| NPS 80CCD(2) – Employer | Available | Available |
| Tax Slabs | 7 slabs (5%–30%) | 3 slabs (5%–30%) |
| Surcharge on >₹50L | Same as Old | Same as New |
| Best For | Minimal investments, higher liquid income | Heavy home loan + HRA + 80C users |
5 Salary Myths Busted
Myth
"CTC = Take-Home"
Reality
CTC includes Gratuity, Employer EPF, insurance, perks — your actual in-hand is typically 65–80% of CTC depending on your slab.
Myth
"Higher Salary = Higher Tax Rate on Full Amount"
Reality
India uses a slab system. Only the income above each threshold is taxed at the higher rate — not your entire salary.
Myth
"Old Regime Always Saves More Tax"
Reality
The New Regime beats Old for most individuals earning ≤ ₹15L/year with limited deductions (no home loan, modest 80C use).
Myth
"EPF Is a Bad Investment"
Reality
EPF currently earns ~8.25% p.a. (FY 2023-24), is EEE-exempt (Exempt-Exempt-Exempt), and is far safer than most fixed-income instruments.
Myth
"Professional Tax Is National"
Reality
PT is a state-level levy. 9 states (including Delhi, UP, Haryana) don't charge PT at all. Karnataka charges up to ₹2,400/year.
Official References
10 authoritative government & regulatory sources backing every number on this page.
Income Tax India – Official e-Filing Portal
File returns, check Form 26AS, verify tax credit, and access all official tax notices and compliance tools.
EPFO – Employee Provident Fund Organisation
Check your EPF balance, passbook, KYC status, and file transfer/withdrawal claims directly.
Union Budget 2025 – Finance Act
Official source for tax slab changes, standard deduction revisions, and all finance act provisions for FY 2025-26.
Section 87A Rebate – CBDT Circular
Official circulars and notifications on rebates, surcharges, and tax computation guidelines from CBDT.
NPS – National Pension System Trust
Learn about employee NPS contributions (Tier-1), tax benefits under 80CCD(1B), and current returns.
EPF Interest Rate – EPFO Official Notification
Latest declared EPF interest rates and notifications. Currently 8.25% for FY 2023-24 as declared by the Central Board of Trustees.
Professional Tax – State-wise Rules (Bombay PT Act)
Authoritative state-specific PT slabs, due dates, and exemption criteria for Maharashtra (one of India's highest PT-levy states).
HRA Exemption – Section 10(13A) Rules
Official text of Section 10(13A) governing HRA exemption computation for metro and non-metro employees.
Form 16 / TDS on Salary – Section 192
How your employer calculates TDS under Section 192, issues Form 16, and reconciles advance tax credit.
Gratuity Act & Calculation Rules – Labour Ministry
Payment of Gratuity Act rules, eligibility criteria (5 years), and the formula: (Last Salary × 15 × Years) ÷ 26.
All figures on HQCalc are sourced from these official publications. Last verified: February 2025 (Union Budget 2025-26).
Payroll FAQ Hub
20 most-searched questions about Indian salary structure, answered.
1. What is the difference between Gross Salary and In-Hand Salary?
Gross Salary is the total amount promised by the employer before any deductions. In-Hand Salary is the net amount credited to your bank account after deducting EPF, Professional Tax (PT), and Income Tax (TDS).
2. How much EPF is deducted from my salary in FY 2025-26?
12% of your Basic Salary + DA is deducted as the employee's EPF contribution. The employer matches this with an additional 12%, making total EPF 24% of Basic — but only your 12% reduces your in-hand salary.
3. What is the standard deduction for salaried individuals in FY 2025-26?
The standard deduction has been increased to ₹75,000 under the New Tax Regime and remains ₹50,000 under the Old Tax Regime.
4. Is Professional Tax (PT) the same across all states?
No, PT varies by state. Maharashtra and Karnataka cap it at ₹2,500/year (₹200/month, ₹300 in Feb). Tamil Nadu is ₹2,400/year. Andhra Pradesh and Telangana follow slab-based rates. Delhi, Haryana, and UP have no PT.
5. How is HRA exemption calculated?
HRA exemption is the minimum of: (1) Actual HRA received, (2) 50% of Basic for metros / 40% for non-metros, (3) Rent paid minus 10% of Basic. Only the Old Tax Regime allows this exemption.
6. Does a higher CTC always mean higher in-hand?
No. CTC often includes Gratuity (~4.81% of Basic), Employer EPF (12% of Basic), insurance premiums, and flexi-benefit plans — none of which reach your account monthly.
7. How does the New Tax Regime impact my monthly take-home?
The New Regime offers lower slab rates, no tax up to ₹7L (via 87A rebate), and a ₹75,000 standard deduction — typically boosting monthly take-home for those without large investment deductions.
8. Is Gratuity part of my monthly in-hand salary?
No. Gratuity (~4.81% of Basic) accrues over your tenure and is paid as a lump sum after 5 years of continuous service. It reduces CTC but never touches monthly pay.
9. Can I opt out of EPF?
If your Basic is above ₹15,000 at the time of first joining, some employers allow opting out. However, once enrolled, you generally cannot exit until leaving the organisation.
10. What is Section 87A rebate in FY 2025-26?
Under the New Regime, Section 87A gives a rebate of up to ₹25,000 if net taxable income is ≤ ₹7 Lakhs, effectively making it zero-tax.
11. How often should I recalculate my in-hand salary?
Recalculate after every appraisal, job switch, Budget announcement (Feb), or life event (marriage, home loan) that changes your deduction profile.
12. What happens to Variable Pay and Bonus in the month they are paid?
Variable/Bonus is added to that month's income and taxed at your effective slab rate, causing a temporary spike in TDS and a dip in your take-home percentage for that month.
13. Does Special Allowance get taxed?
Yes. Special Allowance is fully taxable under both regimes. There are no exemptions or deductions available against it (unlike HRA or LTA).
14. What is the maximum EPF deduction limit?
Statutory minimum is 12% of ₹15,000 (₹1,800/month), but most private employers deduct 12% of your actual Basic — which can be significantly higher.
15. Is Health & Education Cess included in TDS?
Yes. HQCalc applies the 4% Health and Education Cess on top of your income tax before calculating monthly TDS.
16. How does NPS (National Pension System) impact take-home?
Employee NPS contributions (usually 10% of Basic under Tier-1) reduce your monthly in-hand but provide deduction under Section 80CCD(1B) — up to ₹50,000 extra — in the Old Regime.
17. Why is February salary sometimes different?
In many states, PT arrears are settled in February (e.g., Maharashtra charges ₹300 in Feb vs ₹200 in other months). Additionally, year-end TDS true-ups happen in Q4.
18. Is my salary data safe on HQCalc?
Absolutely. HQCalc runs 100% client-side — no server, no database. Your CTC and breakup are processed entirely within your browser and never transmitted anywhere.
19. Can I compare Old vs New Regime side-by-side?
Yes. The HQCalc engine computes both simultaneously and shows the monthly and annual difference, letting you choose the regime that maximises your liquidity.
20. What if I have multiple income sources besides salary?
This tool focuses on 'Income from Salary' only. For business income, rental income, capital gains, or crypto, use our comprehensive Income Tax Engine linked in the sidebar.
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