1. What is In-Hand Salary?

In-Hand Salary is the actual amount an employee receives after all deductions like income tax, provident fund (PF), professional tax, etc. It's the net amount credited to your bank account each month.

2. How is In-Hand Salary Calculated?

The basic formula for calculating in-hand salary is:

Where:

• Gross Salary — Total salary before any deductions
• Income Tax — Tax deducted as per income tax slabs
• PF — Employee's contribution to Provident Fund (typically 12% of basic salary)
• Professional Tax — State-level tax on employment (varies by state)

3. Components of Salary Deductions

Income Tax: Calculated based on your income tax slab rates. For FY 2023-24, the tax slabs range from 0% to 30% plus cess.

Provident Fund (PF): Typically 12% of basic salary, with both employee and employer contributing.

Professional Tax: Varies by state, typically around ₹200-₹250 per month in most states.

4. Using the Calculator

Instructions: Enter your gross annual salary in INR, followed by your annual income tax, PF contributions, and professional tax. The calculator will compute your net in-hand salary.

5. Frequently Asked Questions (FAQ)

Q1: What's the difference between CTC and in-hand salary?
A: CTC (Cost to Company) includes all benefits (even those not received as cash), while in-hand salary is the actual cash received after deductions.

Q2: How can I reduce my tax deductions?
A: Through tax-saving investments (Section 80C), HRA exemption, medical insurance (Section 80D), and other deductions.

Q3: Is PF contribution mandatory?
A: For organizations with 20+ employees, PF contribution is mandatory for employees earning up to ₹15,000 basic salary.

Q4: Why does professional tax vary?
A: Professional tax is determined by state governments, so rates differ across Indian states.

Q5: How often should I calculate my in-hand salary?
A: Whenever there's a change in your salary structure, tax laws, or at the start of each financial year.