CTC vs Take-Home: How Much Salary Do You Actually Get?

Salary: Many employees get excited seeing the CTC on a new offer letter. But by the time the salary hits their bank account, expectations change. The reason is the difference between CTC and the in-hand salary. 

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What is CTC?

CTC is Cost to Company, the total yearly expense on an employee. It includes basic pay, HRA, PF, gratuity, insurance, and bonus. Not all of it is in-hand cash.

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What is Take-Home Salary?

Take-Home Salary is the net amount credited to your bank account monthly. After deductions like PF, income tax, and insurance from your CTC, the remainder is your in-hand pay.

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Why does tax increase when income increases?

Tax starts from a ₹15 lakh package. It rises sharply for 25 LPA+ due to tax slabs. As your salary grows, the tax rate increases, so your in-hand pay doesn't rise as much.

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Why do you get less money in hand despite a high CTC?

This is a common doubt. Reasons include high PF cuts, gratuity in CTC but not in-hand, heavy taxes, and insurance premiums. For a ₹1 crore CTC, in-hand is just ~₹5.6 lakh/month.

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Important things employees should know

Always check the CTC breakup in your offer. Calculate your take-home pay in advance. Plan taxes and understand long-term benefits like PF. In-hand cash matters most.