CTC vs in-hand salary Tax Year 2026–27
One is what you cost your employer. The other is what reaches your bank account. On a ₹15 lakh package the difference is roughly ₹14,190 a month.
| CTC | In-hand salary | |
|---|---|---|
| What it is | Everything your employer spends on employing you in a year | What your bank account receives each month |
| Includes your salary | Yes | Yes, what is left of it |
| Employer's PF contribution | Usually included | Never. It goes to your EPF account |
| Gratuity provision | Usually included | Never. Paid only after five years, if then |
| Insurance and benefits | Often included | Never as cash |
| Variable pay | Included at 100% of target | Not in your monthly figure |
| Your own PF | Included | Deducted, but still your money |
| Income tax | Not deducted | Deducted monthly as TDS |
| Professional Tax | Not deducted | Deducted where the state charges it |
| Who quotes it | Recruiters, offer letters, appraisal letters | Your payslip and your bank statement |
The gap on a ₹15 lakh package
Dividing ₹15,00,000 by twelve gives ₹1,25,000. The actual figure on a typical structure is ₹1,10,810. Here is where the difference goes:
- ₹4,806 a month is employer-side cost, their PF contribution and a gratuity provision
- ₹1,800 is your own PF, which is still yours
- ₹7,375 is income tax
- ₹208 is Professional Tax
Only one of those four is genuinely money you will never see again.
What to ask before accepting an offer
The CTC tells you very little on its own. Four questions settle most of the uncertainty:
- What percentage of the package is Basic?
- Is the employer's PF contribution counted inside the CTC?
- Is PF capped at the ₹15,000 statutory wage, or charged on the full Basic?
- How much of the package is variable, and what has actual payout looked like?
Ask for the salary structure in writing. Any employer worth joining will send it.
Common questions
What percentage of CTC is in-hand salary?
It falls as the package grows, because tax is progressive. On the assumptions used across this site it runs from roughly 85% at ₹3 lakh down to about 65% at ₹1 crore. The salary examples show the curve at every level.
Can I ask for a different salary structure?
Sometimes, particularly at senior levels or in smaller companies. Most large employers run fixed structures set by payroll policy. It is always worth asking, because moving the Basic percentage changes your PF and your take-home materially.
Which number should go on a loan application?
Lenders assess your net monthly income from your payslip and bank statements, not your CTC. Quoting CTC will just mean the figures do not reconcile.
Related
Written by Divya Akash Dutta. Published 18 August 2026. Last reviewed 18 August 2026 for Tax Year 2026–27.