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Your offer letter says one number, but your bank account sees another. Our free India CTC to in-hand salary calculator for FY 2025-26 converts your cost-to-company into an estimated monthly in-hand salary — accounting for the new-regime income tax slabs, the Section 87A rebate, EPF deductions and professional tax.
CTC vs in-hand salary: what’s the difference?
CTC (cost to company) is everything your employer spends on you in a year: your basic salary, HRA and allowances, plus the employer’s EPF contribution, gratuity provision and sometimes insurance premiums. In-hand salary is what is left after the deductions that never reach you. The calculator follows these steps:
- Step 1: it removes the employer’s EPF contribution from your CTC to find your gross salary.
- Step 2: it subtracts the standard deduction (₹75,000 in the new regime, ₹50,000 in the old) and, in the old regime, the exempt part of your HRA.
- Step 3: it applies the regime’s tax slabs, the 87A rebate with marginal relief, and 4% health & education cess.
- Step 4: it deducts your employee EPF share and professional tax, then divides by 12 for the monthly figure.
New regime tax slabs for FY 2025-26
The new regime (Section 115BAC) is the default for FY 2025-26. These are the slabs announced in Budget 2025:
| Total income | Tax rate |
|---|---|
| Up to ₹4,00,000 | Nil |
| ₹4,00,001 – ₹8,00,000 | 5% |
| ₹8,00,001 – ₹12,00,000 | 10% |
| ₹12,00,001 – ₹16,00,000 | 15% |
| ₹16,00,001 – ₹20,00,000 | 20% |
| ₹20,00,001 – ₹24,00,000 | 25% |
| Above ₹24,00,000 | 30% |
Zero tax up to ₹12 lakh: the 87A rebate and marginal relief
The headline change of Budget 2025 is the Section 87A rebate: if your total income (after the ₹75,000 standard deduction) is up to ₹12,00,000, your tax is fully rebated to zero. For a salaried employee, that means gross income up to ₹12,75,000 can be tax-free. If your income is slightly above ₹12 lakh, marginal relief caps your tax at the amount by which your income exceeds ₹12 lakh — so earning a little more never leaves you worse off. A 4% health and education cess applies on the tax computed.
EPF: how provident fund affects your in-hand pay
Both you and your employer contribute 12% of your basic salary (+ dearness allowance) to the Employees’ Provident Fund, but only on wages up to ₹15,000 a month. That caps each side’s contribution at ₹1,800 a month (₹21,600 a year). The employer’s share sits inside your CTC, so the calculator removes it to reach gross salary; your own 12% is then deducted from your pay. EPF earns tax-free interest and is a genuine saving, even though it reduces your monthly in-hand figure.
Professional tax
Professional tax is a small state-level levy deducted from salaries — for example, up to ₹2,500 a year in Maharashtra (₹200 a month, ₹300 in February) and ₹200 a month in Karnataka, while some states charge nothing. Because it varies, the calculator assumes ₹2,500 a year and labels it clearly; check your state’s slab for the exact figure.
HRA: new regime vs old regime
Under the new regime, HRA is fully taxable — there is no HRA exemption. Under the old regime, the least of three amounts is exempt: actual HRA received, 50% of basic (metro) or 40% (non-metro), and rent paid minus 10% of basic. The calculator approximates the exemption as the lower of your HRA and the 50%/40% limit (assuming your rent is high enough), so treat the old-regime figure as indicative and compare both regimes before choosing.
Worked example: ₹12,00,000 CTC in the new regime
Say your CTC is ₹12,00,000, basic is 40% (₹4,80,000), HRA is ₹2,40,000, you live in a metro city and choose the new regime:
- Employer EPF: 12% of basic capped at ₹1,800/month = ₹21,600
- Gross salary: ₹12,00,000 − ₹21,600 = ₹11,78,400
- Taxable income: ₹11,78,400 − ₹75,000 standard deduction = ₹11,03,400
- Income tax: ₹0 (87A rebate — income under ₹12 lakh)
- Annual in-hand: ₹11,78,400 − ₹21,600 (employee EPF) − ₹2,500 (professional tax) = ₹11,54,300
- Monthly in-hand: ₹96,192
India salary FAQs
What is the difference between CTC and in-hand salary?
CTC (cost to company) is your employer’s total annual spend on you, including employer EPF, gratuity and insurance. In-hand salary is what reaches your bank account after employee EPF, professional tax and income tax are deducted. In-hand is typically 75–85% of CTC for mid-range salaries.
What are the new regime tax slabs for FY 2025-26?
For FY 2025-26 the new-regime slabs are: nil up to ₹4 lakh, 5% to ₹8 lakh, 10% to ₹12 lakh, 15% to ₹16 lakh, 20% to ₹20 lakh, 25% to ₹24 lakh, and 30% above ₹24 lakh, plus 4% cess. A ₹75,000 standard deduction applies to salaried income.
Is there really zero tax up to ₹12 lakh?
Yes, under the new regime for FY 2025-26. The Section 87A rebate wipes out tax entirely when your total income (after the ₹75,000 standard deduction) is up to ₹12 lakh, so salaried employees earning up to ₹12.75 lakh pay no income tax. Marginal relief protects you just above the threshold.
How much is deducted for EPF?
You and your employer each contribute 12% of basic salary plus dearness allowance, capped at wages of ₹15,000 a month – so a maximum of ₹1,800 a month (₹21,600 a year) each. The employer’s share is part of your CTC; yours is deducted from your pay.
What is professional tax on salary?
Professional tax is a state levy on salaried income, deducted by your employer. It goes up to ₹2,500 a year in Maharashtra and is ₹200 a month in Karnataka, while several states levy nothing. The calculator assumes ₹2,500 a year – check your state’s rates for the exact amount.
Should I choose the new or old tax regime?
The new regime usually wins for salaries up to about ₹12–15 lakh because of the ₹12 lakh rebate and lower slabs, while the old regime can win if you claim large deductions (80C, HRA, home-loan interest). Use this calculator’s regime switch to compare your own numbers before deciding.
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