How do I calculate my net monthly salary from CTC in India?
To calculate your net monthly salary, start with your gross salary and subtract employee deductions: Employee Provident Fund (12% of Basic), Professional Tax (usually ₹200/month), and monthly TDS (income tax). The formula is: Net Monthly Salary = (Gross Annual Salary - Employee PF - Professional Tax - Income Tax) / 12.
What is the difference between CTC, Gross Salary, and Net Salary?
CTC (Cost to Company) is the total amount your employer spends on you, including retirement benefits like gratuity and employer PF. Gross Salary is what you earn before deductions. Net Salary (or in-hand pay) is the actual money credited to your bank account every month after tax, PF, and statutory deductions.
How much tax is deducted on a ₹10 Lakh CTC under the New Tax Regime?
Usually none. For FY 2026-27 the new regime gives salaried employees a ₹75,000 standard deduction and a rebate that makes tax nil when taxable income is up to ₹12 lakh, so a salary of up to ₹12.75 lakh pays no income tax. On a ₹10 lakh CTC, once employer PF, gratuity and the standard deduction are taken out, taxable income is about ₹8.5 lakh, so no TDS is deducted.
Is New Tax Regime or Old Tax Regime better for salaried employees?
For most salaried individuals earning up to ₹12.75 Lakh per year without substantial home loan interest or high rent, the New Tax Regime offers lower tax rates, a higher standard deduction of ₹75,000, and zero paperwork. However, if you claim high HRA, Section 80C (₹1.5 Lakh), Section 80D health insurance, and home loan interest (Section 24b up to ₹2 Lakh), the Old Regime may save more tax. Use this calculator to compare both regimes side-by-side.
How is income from salary calculated for income tax?
Add up everything your employer pays you in the year — basic pay, allowances, bonus and taxable perquisites. Under the new regime, subtract only the ₹75,000 standard deduction. Under the old regime, you also subtract exempt allowances such as HRA (within limits), the ₹50,000 standard deduction and professional tax, and then Chapter VI-A deductions like 80C and 80D. Employer PF within the limits and gratuity that has not been paid are not part of taxable salary.
Why is my monthly bank credit lower than my monthly CTC divided by 12?
Because CTC includes employer contributions that are not paid to you directly in cash each month. These include Employer EPF (12%), statutory gratuity allocation (4.81% of basic), annual performance bonuses, and group medical insurance premiums, in addition to the monthly deductions of your own PF, professional tax, and income tax.
