How to calculate in-hand salary from CTC Tax Year 2026–27
Six steps, worked through on a ₹15 lakh package. Do it once by hand and the calculator will stop feeling like a black box.
Step 1. Find your salary structure
Get the salary breakup from your offer letter, not just the CTC. You need Basic, HRA, any DA, and what the employer counts as their own contributions.
If you only have a CTC, assume Basic at 40–50% of the package, but treat that as a guess, because it is the single number that moves the answer most.
On our ₹15,00,000 example with Basic at 50%: Basic is ₹7,50,000 a year.
Step 2. Subtract employer-side components
Take out anything counted in CTC that is not paid to you as salary:
- Employer's PF: 12% of the PF wage. At the ₹15,000 ceiling that is ₹21,600 a year.
- Gratuity provision: 4.81% of Basic + DA, ₹36,075 here.
- Insurance, benefits, employer NPS if any.
₹15,00,000 − ₹57,675 = ₹14,42,325 gross salary.
Step 3. Take out your own PF
12% of the same PF wage, from your side this time: ₹21,600 a year, or ₹1,800 a month.
Check whether your employer applies the ₹15,000 ceiling. If they charge PF on your full Basic instead, this figure rises to ₹90,000.
Step 4. Take out Professional Tax
Depends entirely on your state. In Karnataka it is ₹2,500 a year. In Delhi, Haryana, Uttar Pradesh and several other states it is nothing at all.
Step 5. Work out taxable income and tax
Start from gross salary and subtract what your regime allows.
Under the new regime that is essentially the ₹75,000 standard deduction and any employer NPS contribution. Note that Professional Tax is not deductible here, section 16(iii) is unavailable under the new regime, so it leaves your salary without reducing your tax.
₹14,42,325 − ₹75,000 = ₹13,67,325 taxable.
Then apply the slabs. For Tax Year 2026–27 under the new regime: nothing on the first ₹4,00,000, 5% to ₹8,00,000, 10% to ₹12,00,000, 15% to ₹16,00,000, and so on. Apply the section 87A rebate if taxable income is at or below ₹12,00,000, add surcharge above ₹50,00,000, then add 4% cess.
Tax here comes to ₹88,503.
Step 6. Put it together
| CTC | ₹15,00,000 |
|---|---|
| Employer-side components | −₹57,675 |
| Gross salary | ₹14,42,325 |
| Your PF | −₹21,600 |
| Professional Tax | −₹2,500 |
| Income tax | −₹88,503 |
| Annual take-home | ₹13,29,722 |
| Monthly take-home | ₹1,10,810 |
The three things that move the answer most
- Basic percentage. Drives PF, gratuity and your HRA exemption at once.
- Whether PF is capped. Worth several thousand a month at higher Basics.
- Which regime you are on. Especially if you pay significant rent or have 80C investments.
Common questions
Is there a simple formula for in-hand salary?
Not one that stays accurate. Rules of thumb like "in-hand is 80% of CTC" are wrong at both ends of the range, closer to 87% at ₹5 lakh and under 70% at ₹1 crore. The steps above are the actual method; there is no shortcut that survives the slab structure.
How do I calculate in-hand salary under the old regime?
The same six steps, with two changes at step five: subtract your HRA exemption and your Chapter VI-A deductions (80C, 80D, 80CCD(1B), home loan interest), and use the old slabs. Professional Tax is deductible there.
Should I use gross or CTC as my starting point?
Whichever you actually have. If your offer letter gives a salary structure, start from gross and skip step two. If all you have is a CTC number, start there and estimate the employer-side components.
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Written by Divya Akash Dutta. Published 18 August 2026. Last reviewed 18 August 2026 for Tax Year 2026–27.