Estimate monthly take-home from annual gross using centralized tax + PF logic. If you only know Basic+DA, we can derive PF; if you know PF, enter it directly.
Reviewed July 2026 · FY 2026–27 (AY 2027–28) tax slabs in engine · Methodology
Output is a modeled estimate from FY slabs + PF rules in code — not your employer's payroll system. Ambiguous inputs are blocked with an explicit message (see accuracy card).
Engine snapshot: gross ₹18,00,000/year, new regime, PT ₹2,500/year, Basic+DA ₹9,00,000/year (PF derived). Estimated monthly in-hand ₹1,35,425. Cross-check by entering annual PF from payslips instead of Basic+DA.
The engine needs a single PF source to avoid double-counting. Use payslip PF if you have it; otherwise use Basic+DA to derive PF under configured assumptions.
No. It uses employee-side deductions and income-tax estimate on gross — adjust gross if your CTC definition differs.
When an employer offers you a job in India, the number in the offer letter is usually CTC — Cost to Company. This includes everything the employer spends on you: your salary, employer PF contribution, group insurance premiums, and sometimes a gratuity accrual. Your actual monthly bank credit (in-hand salary) is always lower than CTC divided by 12, often substantially so.
Three categories of deductions explain the gap. First, your employee PF contribution — typically 12% of your PF wage (Basic + DA or a capped PF wage, depending on employer policy) — is deducted before any cash reaches you. Second, professional tax (PT) is a state-specific levy, usually collected monthly from payroll and ranging from zero (some states) to around ₹200–250 per month in states like Maharashtra and Karnataka. Third, TDS (Tax Deducted at Source) is your estimated annual income tax spread across 12 months. Under FY 2025-26 rules, new-regime employees with taxable income up to ₹12 lakh pay zero income tax after the Section 87A rebate — but TDS is still computed and spread every month until actual liability is zero.
The regime choice (old vs new) has a direct, sometimes large, effect on in-hand. The new regime offers a ₹75,000 standard deduction (FY 2025-26) and lower slab rates, making it the default for many employees — especially those with fewer deductions. The old regime allows deductions like Section 80C (up to ₹1.5 lakh), HRA exemption, and others that can make it worth more for employees with high rent or large investments. Use the tax regime comparison calculator to see which produces a lower annual liability for your specific numbers.
Common mistakes when reading an offer letter: treating CTC as a monthly number (divide by 12 to get gross, then apply deductions); assuming all components are paid monthly (bonus and variable pay are often paid quarterly or annually); and ignoring PF wage definition differences between employers (the same CTC at two companies can produce different monthly PF deductions and different in-hand).
CTC (Cost to Company)is everything your employer spends on your employment: your gross salary, the employer's share of provident fund, gratuity accrual, and insurance premiums. It is a cost figure for the company, not an income figure for you.
Gross salaryis CTC minus employer contributions. This is the taxable earnings base your income-tax liability is computed on. It is what HR uses when they say "your salary is ₹12 LPA" — but it is still not what lands in your account.
Net / in-hand / take-home is gross minus four statutory deductions: income tax (TDS), employee share of provident fund (PF), professional tax, and — for some employees — ESI. This is the number that matters for budgeting.
Under the new tax regime (default from FY 2024-25 onwards), the slabs are lower but most deductions are not available. Standard deduction is ₹75,000. No 80C, no HRA exemption, no home loan interest deduction.
Under the old tax regime, slabs are higher but you can claim 80C (up to ₹1.5 lakh), HRA exemption (if renting), home loan interest, and several other deductions. If your total deductions exceed roughly ₹4–5 lakh, the old regime often saves more tax.
For most employees earning below ₹12–15 LPA with no active investment claims, the new regime now typically produces a higher or equal in-hand figure. Above ₹20 LPA with aggressive 80C and HRA claims, the old regime often still wins.
This calculator computes an estimate from financial-year slabs and statutory rules. Your employer's payroll system may differ in three specific ways: