How to read your CTC vs in-hand
Your offer letter shows a single big number — the CTC, or cost to company. It is everything your employer spends on you in a year, including amounts that never touch your bank account. The honest chain is CTC → gross → taxable → in-hand, and every arrow removes something. Gross is CTC minus employer-side costs (chiefly the employer PF contribution). Taxable income is gross minus the standard deduction. In-hand is gross minus your own EPF, income tax and professional tax, divided by twelve. That is why a 10 LPA package is ₹83,333 a month on paper but about ₹75,133 in your account.
The two things that shrink your salary: PF and tax
Below the zero-tax band, almost the entire gap between CTC÷12 and your in-hand is provident fund. At a 40% basic, you contribute 12% of basic and your employer contributes another 12% from inside the CTC — so a 10 LPA package quietly routes about ₹8,000 a month into EPF. That is not lost money; it is your cheapest, safest retirement asset, compounding at the EPFO rate. Our EPF calculator shows what those deductions grow into over a career.
Income tax is the second lever — but only kicks in higher up. Up to a taxable income of ₹12 lakh, the §87A rebate wipes out the slab tax entirely under the new regime, so packages up to 12 LPA pay no income tax at all. Above that the marginal rates (10%, 15%, 20% and beyond) start eating into each raise, which is why the jump from in-hand at 12 LPA to 15 LPA feels smaller than the headline ₹3 lakh suggests.
Where the zero-tax band ends
The cleanest way to read this ladder is to find the line where tax stops being zero. Every package from 3 LPA through 12 LPA shows zero income tax: at 12 LPA the taxable income (₹10,67,400 after the ₹75,000 standard deduction) is still under the ₹12 lakh rebate limit. At 15 LPA taxable income reaches about ₹13.5 lakh, the rebate no longer applies, and real tax — roughly ₹86,268 a year — appears for the first time. From there, each higher rung carries a visibly larger tax bill, and the pass-through from raise to in-hand drops.
Use the calculator for your real offer
This table is a clean baseline, not your payslip. Real offers carry variable pay (often 7–15% at senior bands), different basic percentages, gratuity or insurance inside CTC, and state-specific professional tax. Any of these moves your monthly figure. Pick the rung closest to your package for the detailed breakup, then open the in-hand salary calculator to plug in your exact basic %, regime, PF treatment and deductions.