Question 1

How is in-hand salary calculated?

Accepted Answer

In-hand (net) salary = Gross salary − employee PF − employee ESI − Professional Tax − TDS. Gross salary is your CTC minus the employer's contributions (employer PF, employer ESI and gratuity).

Question 2

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

Accepted Answer

CTC (Cost to Company) is the total amount an employer spends on you, including employer PF, employer ESI and gratuity. In-hand salary is what reaches your bank account after all deductions, and is always lower than CTC.

Question 3

How much Professional Tax is deducted?

Accepted Answer

Professional Tax varies by state and is capped at ₹2,500 per year. For example, Maharashtra deducts up to ₹200–₹300 per month depending on salary, while some states do not levy Professional Tax at all.