Question 1

What is the difference between CTC and take-home salary?

Accepted Answer

CTC (Cost to Company) is the total annual package, including the employer's PF contribution and other benefits. Take-home salary is what actually reaches your bank account after PF, professional tax and income tax are deducted.

Question 2

Why is my in-hand salary lower than my CTC?

Accepted Answer

CTC includes the employer's PF contribution, which you do not receive in cash. Your gross salary is then reduced by your own PF, professional tax and income tax to arrive at the in-hand amount.

Question 3

How much is deducted for PF?

Accepted Answer

Both you and your employer contribute 12% of basic salary to PF. Your 12% is deducted from your salary; the employer's 12% is part of CTC but goes into your PF account, not your bank account.

Question 4

What is professional tax?

Accepted Answer

Professional tax is a small state-level tax on salaried income, usually around Rs 200 a month or Rs 2,400 a year. The exact amount varies by state, and a few states do not levy it at all.

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