Salary Calculator — CTC to In-Hand Salary Calculator (New vs Old Regime) | AliGreat.com

Free Salary Calculator for India — convert your CTC into monthly in-hand salary under the new or old tax regime for FY 2025–26, instantly.

An Indian salary offer letter almost always quotes an annual CTC (Cost to Company) figure — but the number that actually lands in your bank account every month can look surprisingly different once PF, professional tax, and income tax are all accounted for. The Salary Calculator on AliGreat.com breaks that gap down clearly, comparing your in-hand pay under both the new and old tax regimes for FY 2025–26.

What does the Salary Calculator do?

Enter your annual CTC, the percentage of CTC allocated to basic pay, HRA as a percentage of basic, whether you live in a metro or non-metro city, your preferred tax regime, your annual rent paid, and your 80C investments (relevant only under the old regime). The calculator shows your monthly in-hand salary, yearly in-hand salary, annual income tax payable, and yearly employee PF contribution — along with a full component-wise breakdown table showing basic, HRA, special allowance, employer PF, employee PF, professional tax, and income tax, both yearly and monthly.

Why CTC and in-hand salary are so different

CTC includes every cost your employer bears in employing you — not just what reaches your bank account. This typically includes your basic salary, HRA, special allowance, the employer’s contribution to your PF (which never touches your account directly), and a notional gratuity accrual (an estimated future entitlement, not current cash). Your actual monthly in-hand figure is what remains after subtracting your own PF contribution, professional tax, and income tax (TDS) from your gross monthly salary — which is why a ₹12 lakh CTC offer rarely translates into ₹1 lakh landing in your account every month.

How the calculator builds up your salary structure

Step 1 — Basic pay: calculated as your chosen percentage of CTC (commonly 40-50%), since basic pay forms the base for several other calculations including PF and gratuity.

Step 2 — HRA: calculated as a percentage of basic pay (commonly 40-50%, depending on company policy and city).

Step 3 — Employer PF contribution: 12% of basic pay (subject to certain caps), which is part of your CTC but never appears in your in-hand salary.

Step 4 — Gratuity accrual: a notional accrual based on basic pay, calculated as an annual provision even though it’s only actually paid out on eventual resignation or retirement after the minimum eligibility period.

Step 5 — Special allowance: the remaining balance of CTC after basic, HRA, employer PF, and gratuity accrual are all accounted for — this acts as a flexible “balancing” component in most Indian salary structures.

A worked example

Suppose your CTC is ₹12,00,000 annually, with basic set at 40% of CTC, HRA at 40% of basic, you live in a metro city, choose the new tax regime, pay ₹1,80,000 in annual rent, and have ₹1,50,000 in 80C investments (though this only matters under the old regime).

• Basic = 12,00,000 × 40% = ₹4,80,000
• HRA = 4,80,000 × 40% = ₹1,92,000
• Employer PF ≈ ₹57,600
• Gratuity accrual ≈ ₹27,690
• Special allowance = remaining balance ≈ ₹4,42,710
• Gross salary (Basic + HRA + Special) ≈ ₹11,14,710
• Under the new regime: standard deduction ₹75,000 applied, tax calculated on the resulting taxable income using FY 2025–26 new regime slabs
• Employee PF ≈ ₹57,600 (12% of basic)
• Professional tax ≈ ₹2,400 annually (varies by state)

Putting it all together, the monthly in-hand salary comes to approximately ₹87,000-90,000 (the exact figure depends on the precise tax calculated), against a CTC of ₹1,00,000 per month — illustrating the roughly 10-13% gap between headline monthly CTC and actual take-home pay that’s typical for salaries in this range under the new regime.

New tax regime vs old tax regime — how they actually differ

The new tax regime for FY 2025-26 uses lower tax rates across broader income slabs, starting at 0% up to ₹4 lakh, then rising through 5%, 10%, 15%, 20%, 25%, and 30% bands — combined with a rebate that makes tax effectively nil for taxable income up to ₹12 lakh, and a standard deduction of ₹75,000. However, it does not allow most traditional deductions and exemptions — no HRA exemption, no Section 80C deduction, no home loan interest deduction under Section 24(b).

The old tax regime uses higher rates across narrower slabs (0% up to ₹2.5 lakh, then 5%, 20%, and 30% bands), but allows a wide range of deductions: a ₹50,000 standard deduction, HRA exemption (calculated based on actual rent paid, basic salary, and city type), the full ₹1.5 lakh Section 80C deduction (covering PF, PPF, ELSS, life insurance premiums, and more), home loan interest deduction, and several other itemised deductions.

Which regime actually wins — it depends entirely on your deductions

There’s no universally correct regime — the right choice depends entirely on how many deductions you can genuinely claim. As a rough general pattern: the new regime tends to work out better for people with few deductions to claim — for example, someone without a home loan, living in a low-rent situation relative to their salary, and not maximising 80C investments. The old regime can still win for people with a substantial home loan interest deduction, high HRA in an expensive metro city, and a fully utilised ₹1.5 lakh 80C limit. The only reliable way to know which applies to your specific situation is to run your actual numbers through both regimes — exactly what this calculator’s regime toggle is built for — rather than assuming a generic answer applies to everyone.

How HRA exemption is calculated under the old regime

HRA exemption (relevant only under the old regime) is the least of three amounts: your actual HRA received, actual rent paid minus 10% of basic salary, or 50% of basic salary for metro cities (40% for non-metro). This calculator applies exactly this three-way minimum rule automatically based on your entered rent, basic salary, and metro/non-metro selection, so you don’t need to manually work through the comparison yourself.

Employee PF vs employer PF — why only one reduces your in-hand pay

Both you and your employer contribute 12% of your basic salary (subject to certain wage ceiling rules) toward your EPF account each month. The employer’s 12% contribution is part of your CTC but never touches your bank account directly — it goes straight into your retirement fund on the employer’s side of the ledger. Your own 12% contribution, by contrast, is deducted directly from your gross salary, which is exactly why it reduces your monthly in-hand figure even though, like the employer’s portion, it’s technically still your money, just locked away in a retirement account rather than available for immediate use.

Professional tax — a small but real state-specific deduction

Professional tax is a small, state-government-levied tax on salaried income, typically capped at ₹2,500 annually under a national ceiling, though the exact amount and slab structure varies by state — some states don’t levy it at all. This calculator applies a standard estimate, but if you know your specific state’s exact professional tax structure, you can treat the calculator’s figure as a close approximation rather than an exact state-specific figure.

Why your special allowance line looks large and unexplained

Many salary structures include a “special allowance” or similarly named component that simply absorbs whatever remains of your CTC after basic, HRA, employer PF, and gratuity accrual are calculated. This isn’t a mysterious or arbitrary number — it’s a deliberate balancing figure that lets companies design salary structures around a target CTC while keeping basic and HRA at conventional percentages. Since special allowance is generally fully taxable with no specific exemption of its own (unlike HRA), a salary structure with a very high special allowance and low basic/HRA can sometimes mean a comparatively higher effective tax burden, particularly under the old regime where HRA exemption is a meaningful benefit that a lower HRA component would leave partially unused.

Negotiating your salary structure, not just your CTC number

Because basic, HRA, and special allowance percentages are often at least partially negotiable (particularly at senior levels or during a fresh offer negotiation), understanding how this structure affects your actual take-home pay — not just the headline CTC figure — can be a genuinely valuable negotiation tool. Running the same total CTC through this calculator with a couple of different basic-percentage assumptions can reveal whether a specific structure would meaningfully improve or reduce your net in-hand pay, information that’s rarely obvious from the offer letter’s summary figures alone.

Who should use this calculator

Anyone evaluating a new job offer, trying to understand exactly what a quoted CTC translates to in monthly in-hand terms, or deciding between the new and old tax regime for the upcoming financial year will find this calculator directly useful. It’s also valuable for comparing two different job offers with different CTC figures and salary structures, since a lower-CTC offer with a more favourable structure (higher basic, lower special allowance, genuine HRA benefit under the old regime) can sometimes produce a similar or even better in-hand outcome than a nominally higher CTC offer structured less favourably.

Frequently asked questions

Which tax regime should I choose? This depends entirely on your specific deductions — run your numbers through both regimes using this calculator and compare the resulting in-hand salary directly, rather than assuming a generic answer applies to your situation.

Why is my actual in-hand salary lower than CTC divided by 12? CTC includes employer PF contribution and a notional gratuity accrual, neither of which reaches your bank account monthly, plus your own PF contribution, professional tax, and income tax are all deducted from your gross salary before it reaches you.

Can I switch between the new and old tax regime every year? Salaried individuals (without business income) can generally choose their preferred regime each financial year when filing their return, offering flexibility to reassess based on changing personal circumstances like a new home loan or a change in rent.

Does this calculator account for a home loan interest deduction? The calculator’s old-regime calculation includes standard deduction, HRA exemption, and 80C, but does not separately model home loan interest under Section 24(b) — if you have a home loan, your actual old-regime tax liability may be lower than this calculator’s estimate once that deduction is properly factored in.

Try it now

Open the Salary Calculator on AliGreat.com, enter your CTC and structure details, and compare your in-hand salary under both tax regimes instantly — free and fully transparent about every calculation step.