Karthik took a data-entry associate job in Hyderabad on ₹2 lakh a year. The offer letter showed ₹16,667 a month, so Karthik planned around that figure. The first salary credit was ₹14,066. None of the gap is income tax, because at ₹2 lakh you pay zero. It is provident fund and a little professional tax, plus the slice of CTC that an offer letter counts but a bank account never receives.
What ₹2 lakh CTC actually contains
Standard 50% basic structure at ₹2L:
| Component | Annual | Monthly |
|---|---|---|
| Basic salary | ₹1,00,000 | ₹8,333 |
| HRA (50% of basic) | ₹50,000 | ₹4,167 |
| Special allowance | ₹33,190 | ₹2,766 |
| Employer PF (12% of basic) | ₹12,000 | ₹1,000 |
| Gratuity provision (4.81%) | ₹4,810 | ₹401 |
| Total CTC | ₹2,00,000 | ₹16,667 |
Employer PF plus gratuity comes to ₹16,810. That money sits inside the ₹2 lakh CTC and never lands in your salary account. Your gross salary, the part payroll actually pays, is ₹1,83,190 a year.
Take-home calculation (new regime)
| Item | Annual | Monthly |
|---|---|---|
| Gross salary (excl. employer PF + gratuity) | ₹1,83,190 | ₹15,266 |
| Less: Employee PF | ₹12,000 | ₹1,000 |
| Less: Professional tax (Karnataka) | ₹2,400 | ₹200 |
| Less: Income tax | ₹0 | ₹0 |
| In-hand | ₹1,68,790 | ₹14,066 |
Taxable income after the ₹75,000 standard deduction is ₹1,08,190, below the ₹4 lakh first slab of the new regime. So income tax is zero. The only money leaving your gross is your own PF of ₹12,000 and ₹2,400 of professional tax.
The real-world wrinkles at this salary
Your monthly gross of about ₹15,266 is under the ₹21,000 ESI ceiling, so ESI usually applies: you contribute 0.75% and your employer 3.25%, and you get health cover in return. The calculator above does not model ESI, so your slip may show a small extra deduction. Several states also waive professional tax below a monthly income threshold, which means your actual deduction could be ₹2,400 lighter than the table. Ask payroll for the detailed slip so you know exactly which heads apply.
The ₹1,000 a month going into PF is not really a loss. Your employer matches it, so close to ₹2,000 a month is being saved for you at around 8.25% tax-free. Track it with the EPF calculator.
How take-home moves across the salary ladder
| CTC | Monthly take-home | Income tax / year |
|---|---|---|
| ₹1L | ₹6,933 | Zero |
| ₹1.5L | ₹10,499 | Zero |
| ₹2L | ₹14,066 | Zero |
| ₹2.3L | ₹16,206 | Zero |
| ₹3L | ₹21,199 | Zero |
| ₹3.8L | ₹26,905 | Zero |
| ₹3.9L | ₹27,618 | Zero |
All figures: new regime, Karnataka professional tax, 50% basic structure, FY 2025-26. Plug your own CTC and city into the take-home salary calculator for an exact number.
Sources
- Income Tax Act 1961: Section 115BAC new regime slabs, ₹75,000 standard deduction, Section 87A rebate (FY 2025-26)
- EPFO: 12% employee plus 12% employer PF contribution on basic salary
- Payment of Gratuity Act 1972: 4.81% gratuity provision formula
- State Professional Tax Acts (Karnataka rate used as the representative figure)