Vikram joined on a ₹3.7 lakh network technician role in Visakhapatnam. The offer letter said ₹30,833 a month. The bank credit was ₹26,192. The whole gap is your own EPF, the ₹2,400 professional tax, and the employer PF plus gratuity that live inside CTC and never reach you. In-hand at 3.7 LPA works out to about 85% of CTC.
What ₹3.7 lakh CTC actually contains
Standard 50% basic structure at ₹3.7L:
| Component | Annual | Monthly |
|---|---|---|
| Basic salary | ₹1,85,000 | ₹15,417 |
| HRA (50% of basic) | ₹92,500 | ₹7,708 |
| Special allowance | ₹61,402 | ₹5,117 |
| Employer PF (12% of basic) | ₹22,200 | ₹1,850 |
| Gratuity provision (4.81%) | ₹8,898 | ₹742 |
| Total CTC | ₹3,70,000 | ₹30,833 |
Employer PF plus gratuity comes to ₹31,098. That money sits inside the ₹3.7 lakh CTC and never lands in your salary account. Your gross salary, the part payroll actually pays, is ₹3,38,902 a year.
3.7 LPA in-hand salary: the take-home math
| Item | Annual | Monthly |
|---|---|---|
| Gross salary (excl. employer PF + gratuity) | ₹3,38,902 | ₹28,242 |
| Less: Employee PF | ₹22,200 | ₹1,850 |
| Less: Professional tax (Karnataka) | ₹2,400 | ₹200 |
| Less: Income tax | ₹0 | ₹0 |
| In-hand | ₹3,14,302 | ₹26,192 |
Taxable income after the ₹75,000 standard deduction is ₹2,63,902, and the 87A rebate wipes out any tax the slabs produce. So income tax is zero. The only money leaving your gross is your own PF of ₹22,200 and ₹2,400 of professional tax.
Why in-hand is about 85% of CTC here
Your in-hand at ₹3.7 lakh is ₹3,14,302, roughly 85% of CTC. Early on almost everything you earn is yours, which is exactly when a savings habit is cheapest to start. The share reaching your hand only drops from here: about 80% near ₹16 lakh, 75% near ₹30 lakh, under 60% at ₹1 crore.
The ₹1,850 a month into PF is part of that gap. Your employer adds the same again, so close to ₹3,700 a month is quietly compounding for you. Track it with the EPF calculator.
In-hand salary across nearby CTC bands
| CTC | Monthly in-hand | Income tax / year |
|---|---|---|
| ₹3.3L | ₹23,339 | Zero |
| ₹3.4L | ₹24,052 | Zero |
| ₹3.5L | ₹24,765 | Zero |
| ₹3.6L | ₹25,478 | Zero |
| ₹3.7L | ₹26,192 | Zero |
| ₹3.8L | ₹26,905 | Zero |
| ₹3.9L | ₹27,618 | Zero |
| ₹4L | ₹28,332 | Zero |
| ₹4.2L | ₹29,758 | Zero |
All figures: new regime, Karnataka professional tax, 50% basic, FY 2025-26. Enter your own CTC and city into the in-hand 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)