CTC INR 4.5 LPA In Hand Salary – New Tax Regime

You know a different happiness thrills us when we listen to the incoming month’s end salary and the “salary has been credited” message to our phone. Whenever we get a job offer from the company, we are offered a particular salary package i.e. CTC. Knowing in hand salary (take-home salary) from CTC can help you understand the whole salary structure and help you in your financial and tax planning, which can ultimately increase your in hand salary. With this article, let us know what will be the in hand salary for CTC of INR 4.5 LPA (Lakh per annum). So, let’s start:

Usual salary structure components (fixed) of the salary of an Employee

1. Basic Salary – It is usually 50% of your CTC.
2. House Rent Allowance (HRA) – Usually 30% of your basic salary
3. Employer’s contribution to your PF – 12% of your basic salary
4. Food Coupons (Like Sodexo Card, etc.) – Usually INR 1,250/- per month
5. Ex gratia or Special Allowance  – Remaining part of total salary

Note – We have not considered variable performance pay (bonus) as part of salary in the example because this amount is not fixed and varies as per the discretion of the employer.

In hand salary when CTC (Package) is 4.5 LPA (Lakh Per Annum)

CTC is the summation of the below components –

1. Basic Salary = 50% * 4.5 lakh = INR 2.25 Lakh
2. HRA = 30% * 2.25 lakh = INR 0.675 Lakh
3. Employer’s contribution to your PF(#) = 12% * 2.25 lakh = INR 0.27 Lakh
4. Food Coupons (Like Sodexo, etc.) = INR 1,250 per month * 12 = INR 0.15 Lakh per year
5. Ex gratia or Special Allowance = 4.5 lakh – 2.25 lakh – 0.675 lakh – 0.27 lakh – 0.15 lakh = INR 1.155 Lakh

(#)Provident Fund (PF) – It is a government-managed retirement savings scheme for employees wherein an employee and also his/her employer have to deposit 12% of the employee’s basic salary mandatorily in the employee’s PF account.

Now, what would be your In hand take-home salary? For that, we have to take out certain components from your total salary (CTC) which are as follows –

1. PF contributions (Both employee & employer contributions)
2. Food coupons
3. Total tax liability including cess

In hand Salary = CTC – Sum of above components

Let’s see the calculation of the above components below –

1. PF Contributions = 12% of Basic salary (Employer’s Contribution) + 12% of basic salary (Employee’s Contribution) = 12% * 2.25 lakh + 12% * 2.25 lakh = INR 0.54 Lakh
2. Food Coupons = INR 0.15 Lakh (Already calculated above)
3. Total tax liability including cess – INR 0/- (There is a tax rebate of INR 25,000/- under the new tax regime when taxable income is up to INR 7 lakh)

Income Slab (INR – Indian Rupees)	New Tax Regime (Rate) (W.e.f 01.04.2023)
Up to 3 lakh	Nil
3 to 6 lakh	5%
6 to 9 lakh	10%
9 to 12 lakh	15%
12 to 15 lakh	20%
Above 15 lakh	25%
Education Cess	4% of the total tax payable

Summary of Salary Package

Particulars	Amount (INR)
Gross Salary	INR 4,50,000/-
Basic Salary	INR 2,25,000/-
PF (Employee’s Contribution)	INR 27,000/-
PF (Employer’s Contributions)	INR 27,000/-
Food Coupons	INR 15,000/-
HRA	INR 67,500/-
Ex-Gratia or Special Allowance	INR 1,15,500/-
Tax liability including cess (New tax regime)	INR 0/-
In hand salary (New tax regime)	INR 3,81,000/- Lakh per year ~ INR 31,750/- per month

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