When you receive a job offer, the number you see is the CTC (Cost to Company). This is the total amount the company spends on you annually. However, your actual Take-Home (or In-Hand) Salary is always lower because of mandatory and voluntary deductions.
Common Salary Components
Earnings (Gross Salary)
- • Basic Pay: Usually 40% to 50% of your CTC. Forms the basis for PF.
- • HRA (House Rent Allowance): Usually 40% or 50% of Basic Pay.
- • Special Allowance: The balancing figure used to round up your CTC. Fully taxable.
Deductions
- • EPF (Provident Fund): 12% of Basic Pay deducted directly for retirement.
- • Professional Tax (PT): A state-level tax, usually around ₹200/month.
- • TDS (Income Tax): Tax Deducted at Source based on your tax slab.