Why Is Your In-Hand Salary So Much Lower Than CTC?
Cost to Company (CTC) includes several mandatory employer contributions and deferred retiral benefits that never hit your monthly bank account:
- Employee Provident Fund (EPF): 12% of Basic Salary deducted from employee + 12% contributed by employer.
- Gratuity (Payment of Gratuity Act, 1972): Approximately 4.81% of basic salary set aside for employees completing 5+ years.
- Professional Tax (PT): State-level tax (typically ā¹200/month, capped at ā¹2,500/year).
- Income Tax TDS (Section 192): Monthly tax deduction under either the New Regime (default) or Old Regime.
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