A ₹5 lakh CTC works out to about ₹37,867 a month in hand under the new tax regime, for a typical private-sector salary structure. Below is the exact calculation and the assumptions behind it, so you can adjust it for your own offer letter.
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The calculation
Assumptions: new tax regime, employer PF included in CTC and capped at the ₹15,000 wage ceiling, no gratuity in CTC, professional tax ₹200 a month.
| Line | Annual | Monthly |
|---|---|---|
| CTC | ₹5,00,000 | ₹41,667 |
| Less: employer PF (12% of ₹15,000) | ₹21,600 | ₹1,800 |
| Gross salary | ₹4,78,400 | ₹39,867 |
| Less: employee PF | ₹21,600 | ₹1,800 |
| Less: professional tax | ₹2,400 | ₹200 |
| Less: income tax | ₹0 | ₹0 |
| In-hand salary | ₹4,54,400 | ₹37,867 |
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Start free See the demoWhy income tax is zero
Under the new regime, the standard deduction is ₹75,000 and taxable income up to ₹12 lakh is fully covered by the section 87A rebate. Gross of ₹4,78,400 minus the standard deduction leaves ₹4,03,400 — well under ₹12 lakh, so the tax is nil.
Three things that change the number
1. PF on full basic instead of the ₹15,000 cap. If your employer computes PF as 12% of your actual basic (say basic is 50% of CTC, ₹20,833 a month), both the employer and employee PF become ₹2,500 a month. In-hand drops to about ₹36,467.
2. Gratuity included in CTC. Gratuity is usually 4.81% of basic. On a ₹20,833 basic that is about ₹1,002 a month taken out of gross. In-hand drops by roughly ₹1,000.
3. Your state. Professional tax is ₹200 a month in states like Maharashtra and Karnataka, different in others, and nil in a few states such as Delhi.
In-hand salary from 3 to 12 lakh CTC
Same assumptions as above (PF capped, no gratuity, ₹200 professional tax, new regime).
| CTC | Monthly in-hand |
|---|---|
| ₹3,00,000 | ₹21,200 |
| ₹4,00,000 | ₹29,533 |
| ₹5,00,000 | ₹37,867 |
| ₹6,00,000 | ₹46,200 |
| ₹7,00,000 | ₹54,533 |
| ₹8,00,000 | ₹62,867 |
| ₹10,00,000 | ₹79,533 |
| ₹12,00,000 | ₹96,200 |
All of these stay under the ₹12 lakh rebate limit after the standard deduction, so income tax is nil. For a closer look at the 10 lakh case, read 10 lakh CTC in-hand salary.
How to read your offer letter
Look for four lines: basic, employer PF, gratuity, and anything labelled variable or performance pay. Variable pay is part of CTC but only paid if targets are met, so treat it as a bonus, not as monthly income. Our guide on CTC vs in-hand salary explains each component.
Figures use the new tax regime rules applicable for FY 2026-27 (zero tax up to ₹12 lakh taxable income with rebate). Your employer's structure may differ; this is an illustration, not tax advice.
Frequently asked questions
What is the in-hand salary for 5 lakh CTC?
Roughly ₹37,000 to ₹38,000 a month under the new tax regime, assuming employer PF is part of CTC and capped at ₹1,800 a month. The exact figure depends on your salary structure and state.
Is there income tax on 5 lakh CTC?
Under the new tax regime, taxable income up to ₹12 lakh attracts no tax because of the section 87A rebate, so a ₹5 lakh CTC normally has zero income tax.
Why is in-hand lower than CTC divided by 12?
CTC includes the employer PF contribution and sometimes gratuity and insurance, which you do not receive in your bank account. Employee PF and professional tax are also deducted every month.
Does gratuity reduce in-hand salary?
If your employer includes gratuity in CTC, the monthly gross is lower by that amount, so in-hand drops by about ₹800 to ₹1,000 a month at this salary level.
