Salary / CTC
CTC vs. In-Hand Salary
Cost to Company (CTC) is the total variety of expenses a company spends on an employee. However, this is NOT what you receive in your bank account at the end of the month.
Components of CTC
- Direct Benefits (In-Hand): Basic Salary, HRA, Special Allowance.
- Deductions: Provident Fund (PF), Professional Tax (PT), TDS (Income Tax).
- Indirect Benefits: Employer's PF Contribution, Gratuity, Health Insurance.
Why is In-Hand Lower?
Your "Take Home" salary is calculated as:
CTC - (Employer PF + Gratuity + Insurance) - (Employee PF + PT + TDS)
FAQ
What is Professional Tax?
It is a state-level tax deducted from salaried employees. The amount varies by state (e.g., ₹200/month in Maharashtra) but is capped at ₹2,500 per year.