How we calculated take-home for ₹20 LPA
Starting from a ₹20,00,000 annual CTC, basic salary comes to ₹8,00,000 (40% of CTC) and HRA to ₹3,20,000 (40% of basic). After removing employer PF (₹96,000) and gratuity accrual (₹38,480) — both part of CTC but never paid to you in cash — gross salary works out to ₹18,65,520. Your own PF contribution of ₹96,000 and ₹2,400 professional tax are then deducted, along with income tax under whichever regime you pick.
New regime puts ₹1,76,310 more in your pocket per year at this CTC level, under these default assumptions. This gap changes with your actual rent, 80C investments, and salary structure — small differences in basic/HRA percentage can shift the comparison meaningfully at this income level.
At ₹20 LPA — professional tax and marginal tax
At ₹20 LPA, income tax dominates deductions. Professional tax (₹2,400/year assumed here) is small but real in states like Maharashtra and Karnataka. Consider NPS Section 80CCD(1B) for an extra ₹50,000 deduction under the old regime — not reflected in these default numbers.
CTC vs in-hand salary — why they're never equal
CTC (cost to company) always overstates what lands in your bank account, because it includes non-cash components like employer PF contribution and gratuity accrual — money set aside for your future, not paid out monthly. For a full breakdown of every component and to run the numbers with your own company's salary structure, use our in-hand salary calculator.