Question 1

What is the difference between CTC and in-hand salary?

Accepted Answer

CTC (Cost to Company) is the total expenditure a company makes for you annually, including employer PF, gratuity, and other benefits. In-hand salary is what you actually receive in your bank account after deducting employee PF, professional tax, and income tax (TDS).

Question 2

How much of CTC is my in-hand salary?

Accepted Answer

Typically, in-hand salary is 60-75% of CTC, depending on your salary structure, PF contribution, and tax bracket. The main deductions are: employer PF (12% of basic), gratuity (4.81% of basic), employee PF, professional tax, and income tax.

Question 3

What is included in CTC?

Accepted Answer

CTC typically includes: Basic Salary (40-50% of CTC), HRA (40-50% of Basic), Special Allowance, LTA, Employer PF (12% of Basic), Gratuity (4.81% of Basic), and sometimes medical insurance, food coupons, and other perks.

Question 4

How is professional tax calculated?

Accepted Answer

Professional tax varies by state. In Maharashtra, it is Rs 200/month (Rs 2,400/year) for monthly salary above Rs 10,000. For monthly salary between Rs 7,500-10,000 it is Rs 175/month. Below Rs 7,500, no professional tax is applicable.