Question 1

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

Accepted Answer

CTC (Cost to Company) includes all components like basic salary, HRA, EPF employer contribution, gratuity, and bonuses. In-hand salary (take-home pay) is what you actually receive after deducting EPF employee contribution, professional tax, and income tax from the gross salary components.

Question 2

How is EPF calculated from CTC?

Accepted Answer

EPF contribution is 12% of basic salary from both employee and employer. The employee's 12% is deducted from salary, while the employer's 12% is part of CTC. The maximum basic salary for EPF calculation is capped at ₹15,000/month (₹21,600/year contribution cap per side) for establishments that opt for the wage ceiling.

Question 3

Which tax regime gives higher take-home salary?

Accepted Answer

The new tax regime generally benefits those who don't have significant deductions under sections 80C, 80D, HRA, etc. The old regime benefits those with home loans, HRA claims, and investments in 80C instruments. Use this calculator to compare both regimes for your specific CTC.

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