How is take home different from CTC?

Ever wondered why your take home salary is a lot lower than what you were told on your offer letter? Continue reading to know the difference.


Your job may entitle you to some benefits in the form of food coupons or a cab service apart from your salary. The total cost to the company is the sum of all the benefits offered plus your salary.

The salary that gets credited to your bank account is just your salary after deducting tax.

Compare CTC and salary side-by-side:

CTC
Components Amount
Basic Salary Rs. 3,00,000
Special Allowance Rs. 1,00,000
HRA Rs. 80,000
Medical Reimbursements Rs. 15,000
Medical Insurance for you and your family Rs. 5,000
PF (12% of basic) Rs. 36,000
Performance bonus
(range between 50,000 to 75,000 based on performance ratings)
Rs. 75,000
Total CTC Rs. 6,11,000
Taxable Salary
Components Amount
Basic Salary Rs. 3,00,000
Special Allowance Rs. 1,00,000
HRA (less exemption on production of rent receipts) Rs. 80,000
Bonus received Rs. 70,000
Total Salary Rs. 5,20,000
Less: 12% PF Rs. 36,000
Less: Tax Payable*
 
Rs. 12,875
Take Home Salary Rs. 4,71,125

Broadly your CTC will include these

  • Salary received each month
  • Retirement benefits such as PF and Gratuity
  • Non-monetary benefits such as an office cab service, medical insurance paid for by the company, or free meals at the office, a phone provided to you and bills reimbursed by your company.

Your take-home salary will include

  • Salary received each month
  • minus allowable deductions
  • minus Section 80 deductions
  • minus income taxes payable
*Tax Payable
Total Salary Rs.5,20,000
Less: Deduction u/s Section 80C Rs.1,25,000
Taxable Salary Rs.3,95,000
Tax payable (includes cess; excludes interest payable) Rs.12,875