What is LPA? Tax Year 2026–27
LPA stands for lakhs per annum. Your annual package expressed in lakhs of rupees. It is a unit, not a salary, and the arithmetic that turns it into a monthly figure is where most people go wrong.
One lakh is 1,00,000 rupees. So 12 LPA is ₹12,00,000 a year, and 3.5 LPA is ₹3,50,000. Indian salary conversation runs almost entirely in these units, which is convenient right up to the point where you try to work out what you will actually be paid.
Converting LPA to rupees
- 1 LPA = ₹1,00,000 a year
- 5 LPA = ₹5,00,000 a year
- 10 LPA = ₹10,00,000 a year
- 100 LPA = ₹1,00,00,000 a year, which people usually call 1 crore instead
Above about 50 LPA the unit tends to switch to crores: 1.2 crore rather than 120 LPA.
Why dividing by 12 does not work
LPA is almost always quoted as CTC, the cost to your employer, not your salary. Dividing it by twelve gives you a monthly CTC figure, which is not a number that exists anywhere in your life.
| Package | Annual | CTC ÷ 12 | Actual in-hand |
|---|---|---|---|
| 3 LPA | ₹3,00,000 | ₹25,000 | ₹21,399 |
| 5 LPA | ₹5,00,000 | ₹41,667 | ₹36,856 |
| 8 LPA | ₹8,00,000 | ₹66,667 | ₹61,255 |
| 10 LPA | ₹10,00,000 | ₹83,333 | ₹77,521 |
| 12 LPA | ₹12,00,000 | ₹1,00,000 | ₹93,787 |
| 15 LPA | ₹15,00,000 | ₹1,25,000 | ₹1,10,810 |
| 20 LPA | ₹20,00,000 | ₹1,66,667 | ₹1,44,025 |
| 25 LPA | ₹25,00,000 | ₹2,08,333 | ₹1,74,744 |
The gap starts around 14.4% at the bottom of the range and widens as tax takes hold. It is never zero, because employer-side costs and your own PF sit inside every CTC.
Monthly CTC, gross salary and in-hand
Three different monthly numbers get called "monthly salary", and confusing them is what makes offers feel dishonest:
- Monthly CTC. Annual package divided by twelve. Meaningless in practice.
- Monthly gross. CTC minus employer-side costs, divided by twelve. This is the top line of your payslip.
- Monthly in-hand. Gross minus PF, Professional Tax and TDS. This is what your bank shows.
Common questions
Is 10 LPA a good salary in India?
That depends on your city, your experience, your industry and your costs, and we do not have a dataset that would let us answer it honestly. What we can tell you is the arithmetic: 10 LPA works out at about ₹77,521 a month in hand on a typical structure. Whether that is good is your call.
What does 3.5 LPA mean?
₹3,50,000 a year as a package. Note the decimal, 3.5 LPA is three and a half lakh, not thirty-five lakh. On a typical structure it works out at roughly ₹24,757 a month in hand.
Is LPA the same as CTC?
LPA is a unit; CTC is what is being measured. When someone says "12 LPA" they almost always mean a CTC of ₹12 lakh. Occasionally, particularly for fixed-pay roles, it can mean gross salary, worth clarifying before you do any arithmetic on it.
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Written by Divya Akash Dutta. Published 18 August 2026. Last reviewed 18 August 2026 for Tax Year 2026–27.