Three terms that get used interchangeably and mean completely different amounts of money.
Corrected 29 August 2026. An earlier version of this page excluded target variable pay from both received cash and taxable salary, which understated income tax. Figures are recalculated under model PS-A3. What changed →
Short answer: “CTC in LPA” means your total annual package expressed in lakhs per year — 6 LPA is a ₹6,00,000 CTC. CTC is Cost to Company — the total your employer spends on you in a year. LPA means lakhs per annum and always refers to annual CTC. In-hand is what actually reaches your bank, and it is typically 10–30% lower than CTC divided by twelve.
Figures are indicative, as of August 2026
Take a job offer of ₹6 LPA — ₹50,000 a month CTC. Here is how it shrinks:
| Term | What it is | Monthly amount |
|---|---|---|
| CTC | Total cost to your employer | ₹50,000 |
| Gross salary | CTC minus employer PF, gratuity provision and variable pay | ₹47,238 |
| In-hand | Gross minus your PF, professional tax and income tax | ₹45,238 |
The difference between the first and last row is ₹4,762 a month. None of it is your employer being dishonest — it is simply what CTC means. But it is why an offer should always be discussed as a breakup, not a headline.
Job listings and recruiters use several forms of the same thing:
| What you see | What it means |
|---|---|
| 6 LPA | ₹6,00,000 annual CTC — ₹50,000 a month |
| 6 lakh per annum | The same thing |
| 50k CTC | ₹50,000 monthly CTC — 6 LPA |
| 1.8 LPA | ₹1,80,000 a year — ₹15,000 a month |
| 12 LPA fixed | ₹12,00,000 with no variable component |
| 10 + 2 LPA | ₹10 lakh fixed plus ₹2 lakh variable — total CTC ₹12 lakh |
Monthly to LPA: multiply by 12, divide by 100,000. ₹35,000 a month becomes 4.2 LPA.
LPA to monthly: multiply by 100,000, divide by 12. 8 LPA becomes ₹66,667 a month CTC.
To in-hand: there is no clean formula, because it depends on your basic percentage, your variable component and your state. As a rough guide you keep 83–94% at salaries below ₹10 lakh a year, and 70–80% above it.
Employer provident fund. 12% of basic, capped at ₹15,000 of basic — so ₹1,800 a month for most people. Goes into your EPF account, not your salary.
Gratuity provision. Roughly 4.81% of basic, set aside each year. You receive it only after five years of service with that employer.
Employer ESI. 3.25% of gross, but only where gross is ₹21,000 a month or less. At ₹25,000 CTC you are already outside it.
Variable pay. Often 10–20% of CTC, paid annually or quarterly, and dependent on performance. Any amount actually paid is salary cash and is taxable in that year; any amount not paid is neither received nor taxed.
Ask for three numbers: the basic salary amount, the variable percentage, and whether the company offers employer NPS under Section 124(2).
Those three tell you more than the CTC does. Two offers at the same CTC can differ by ₹30,000 a month in actual take-home depending on how they are built.
CTC stands for Cost to Company — the total annual amount your employer spends on you. It includes your gross salary plus employer provident fund, the gratuity provision, employer ESI where applicable, and any variable pay. It is not the amount you receive.
LPA means lakhs per annum. It always refers to annual CTC. A 6 LPA job means a CTC of ₹6,00,000 a year, or ₹50,000 a month — of which roughly ₹45,000 would reach your account.
No. CTC includes costs your employer pays that never enter your bank account — principally employer PF and the gratuity provision. Gross salary is what appears on your payslip before deductions; in-hand is what remains after PF, professional tax and income tax.
Multiply the monthly figure by 12, then divide by 100,000. ₹35,000 a month is ₹4,20,000 a year, which is 4.2 LPA.
Typically 10–30% of CTC never reaches you. Employer PF and the gratuity provision go into separate accounts, variable pay is paid separately and is not guaranteed, and your own PF, professional tax and income tax are deducted from what remains.
Related: Monthly CTC to In-Hand · CTC-to-In-Hand Index 2026 (research) · In-Hand Salary by Annual CTC · CTC to In-Hand Guide · Salary Slip Explained
A note on section numbers. The Income-tax Act, 2025 replaced the Income-tax Act, 1961 with effect from 1 April 2026. Section numbers on this page are those of the 2025 Act. Where you know a provision by its old number, the mapping is: 115BAC → 202, 87A → 156, 16(ia) → 19, 80CCD(2) → 124, 112A → 198, 10(10) → 19(1) Table Sl. Nos. 3-6.
The official pages this page is checked against. If one of them disagrees with us, it wins.
Written and checked by the PaisaSamajh editorial desk · Last reviewed: 29 August 2026 · How we check this →