📖 8 min read | Salary | April 08, 2026
Last updated: April 08, 2026
You cracked the interview. The HR says "We are offering you ₹10 Lakh CTC." You smile, divide by 12, and think you will get ₹83,333 per month. Then the first salary hits your account — ₹65,000. What happened to the remaining ₹18,000? Welcome to Indian salary structures, where nothing is what it seems.
CTC (Cost to Company) includes everything the company spends on you. Your in-hand salary is what remains after subtracting three categories of deductions: employer costs that never reach you (employer PF, gratuity), mandatory deductions from your gross pay (employee PF, professional tax), and income tax (TDS).
Here is a realistic breakup for a ₹10 LPA CTC package:
| Component | Annual | Monthly |
|---|---|---|
| CTC | ₹10,00,000 | ₹83,333 |
| Less: Employer PF (12% of Basic) | ₹21,600 | ₹1,800 |
| Less: Gratuity (4.81% of Basic) | ₹19,240 | ₹1,603 |
| Less: Performance Bonus (held back) | ₹1,00,000 | — |
| = Gross Salary | ₹8,59,160 | ₹71,597 |
| Less: Employee PF (12%) | ₹21,600 | ₹1,800 |
| Less: Professional Tax | ₹2,400 | ₹200 |
| Less: Income Tax (New Regime) | ₹0* | ₹0 |
| = In-Hand Salary | ₹8,35,160 | ₹69,597 |
*Zero tax because taxable income after standard deduction falls under ₹12L rebate limit. Basic assumed at 40% of CTC, PF capped at ₹15,000 basic.
So from ₹10 Lakh CTC, you actually take home about ₹69,600 per month — roughly 83% of your CTC. As your CTC increases, the percentage drops further because higher income means higher tax slabs.
| CTC | Monthly In-Hand (approx) | % of CTC |
|---|---|---|
| ₹5 LPA | ₹38,000 - ₹40,000 | ~92% |
| ₹8 LPA | ₹58,000 - ₹62,000 | ~90% |
| ₹10 LPA | ₹68,000 - ₹72,000 | ~85% |
| ₹12 LPA | ₹82,000 - ₹87,000 | ~85% |
| ₹15 LPA | ₹95,000 - ₹1,05,000 | ~80% |
| ₹20 LPA | ₹1,20,000 - ₹1,35,000 | ~76% |
| ₹30 LPA | ₹1,70,000 - ₹1,90,000 | ~72% |
| ₹50 LPA | ₹2,60,000 - ₹2,90,000 | ~66% |
Notice how at ₹50 LPA, you only take home about 66% — one-third of your CTC goes to PF, tax, and other deductions. This is why senior professionals often say their "in-hand" is surprisingly low compared to the CTC number.
You cannot avoid PF or professional tax — they are mandatory. But you can legally reduce your income tax through investments in 80C (PPF, ELSS), 80D (health insurance), 80CCD(1B) (NPS), and HRA exemption if you pay rent. Under the old regime, these deductions can save ₹50,000-1,50,000 in tax annually, which directly increases your in-hand pay.
When negotiating salary, ask the HR for a breakup — not just the CTC number. Two companies offering the same CTC can give very different in-hand salaries depending on how they structure basic pay, allowances, and variable components.