CTC to In-Hand Salary: How Much Will You Actually Get in 2026?

Your CTC is not your salary. It is the total amount a company spends on you in a year, including money you never see in your bank account each month. For a 12 LPA offer, the monthly credit is often around ₹93,000–₹96,000, not ₹1 lakh.

This guide shows you exactly where the money goes, with two worked examples under the FY 2026-27 rules.

CTC vs gross salary vs in-hand salary

What gets deducted from your CTC

• Employer PF: 12% of basic pay. Many companies cap this at ₹1,800 a month (12% of ₹15,000); others pay 12% of full basic.
• Gratuity: Usually 4.81% of basic. You receive it only when you leave after the qualifying period, not monthly.
• Employee PF: Another 12% of basic, cut from your gross pay.
• Professional tax: A state tax of up to ₹2,500 a year. Karnataka, Maharashtra, West Bengal and others charge it; Delhi does not.
• Income tax (TDS): Based on your tax regime. Most salaried people now use the new regime.
• Variable pay: Bonus shown in CTC is paid only if targets are met, usually once or twice a year.

The new labour codes and your basic pay

The labour codes commenced on 21 November 2025, as described in the official government release. Their wage definition includes an allowance add-back rule: where specified excluded allowances exceed 50% of remuneration, the excess is added back to wages. This does not mean every employee's basic salary must equal 50% of CTC.

What this means for you: the wage base used for applicable statutory benefits may change, potentially affecting PF, gratuity and take-home pay. The result depends on your salary structure, coverage and applicable contribution rules; ask HR for your actual breakup.

Income tax under the new regime (FY 2026-27)

Under the new regime, salaried employees get a ₹75,000 standard deduction. For eligible resident individuals with taxable income up to ₹12 lakh, the rebate can reduce tax on normal slab-rate income to zero. A gross salary up to ₹12.75 lakh can therefore have zero income tax when salary is the only income and the rebate conditions are met. Other income can change eligibility, and the rebate does not cover special-rate income such as capital gains. A 4% health and education cess applies on tax payable.

Check the Income Tax Department's tax information for official rules.

Example 1: 12 LPA CTC

Assumptions: basic is 50% of CTC for this illustration only, PF capped at ₹1,800 a month, gratuity 4.81% of basic, Karnataka professional tax, new regime, resident individual with only normal slab-rate salary income and no other income. The zero tax result depends on these assumptions and rebate eligibility.

Example 2: 20 LPA CTC

Same assumptions.

If your company pays PF on full basic instead of the ₹15,000 cap, expect a lower monthly credit and a bigger PF balance.

Quick rule of thumb

• Around 12 LPA CTC, in-hand can be roughly 92–94% under the illustrated structure. Zero income tax depends on resident-individual rebate eligibility and normal slab-rate taxable income staying within ₹12 lakh after the salary deduction; CTC alone does not establish eligibility.
• CTC 15–25 LPA: roughly 83–88% of CTC.
• Large variable pay or PF on full basic lowers these numbers.

How to get a better in-hand salary

1. Ask HR for the full salary breakup before you accept the offer, not just the CTC.
2. Check how much is variable pay and how often it was actually paid last year.
3. Ask whether PF is on full basic or capped.
4. Ask about employer NPS. Up to 14% of basic is tax-free under the new regime.
5. Compare your CTC against the market before negotiating.

Compare your pay with our Fair Salary Guide India, and read how Artha's estimates work.