Hi, Could you please help me with CTC breakups where the salary is below the tax limit also, PF is not in the picture.
10th April 2017 From India, Bengaluru
CTC or Cost to Company is the total amount that a company spends (directly or indirectly) on an employee. It refers to the total salary package of the employee. CTC is inclusive of monthly components such as basic pay, various allowances, reimbursements, etc. and annual components such as gratuity, annual variable pay, annual bonus, etc.
CTC is never equal to the amount of take-home salary of the employee. There are many components in the CTC that one does not receive as part of take-home salary.
CTC = Gross Salary + PF + Gratuity
We have provided some easy steps to help you calculate your take-home salary, also known as in-hand salary and net salary.
In order to calculate take home salary, subtract the Income Tax, Provident Fund (PF) and Professional Tax from the Gross Salary.
Step 1: Calculate gross salary
Gross Salary = CTC – (EPF + Gratuity)
Step 2: Calculate taxable income
Taxable Income = Income (Gross Salary + other income) – Deductions
In order to determine the part of your income that is taxable, subtract allowances (LTA, Conveyance Allowance, HRA), professional tax, medical bills, medical insurance, tax saving investments, if any and other deductions from your gross salary.
Step 3: Calculate income tax**
Once you have taxable income, you can easily calculate income-tax by referring to the income-tax slab and rates provided below:
Tax slab
The amount of tax paid by an individual is dependent on the taxable income range.
Step 4: Calculating in-hand/take home salary
Take Home Salary = Basic Salary + Actual HRA + Special Allowance - Income Tax - Employer’s PF Contribution(EPF)
27th August 2019 From India
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