Your First Job in India: Salary, Take-Home Pay and Income Tax

Cost to company (CTC) is what the employer spends on you, not what lands in your account. From it come the employer's PF contribution, gratuity (after five years of service), insurance, bonuses and other components. Your employee PF is usually 12% of basic pay, and professional tax and income tax (TDS) are deducted from what remains.

That is why a ₹10 lakh CTC often means roughly ₹70,000 to ₹80,000 a month in hand, depending on the salary structure and regime. Ask HR for the breakup and enter it in the Salary Calculator to see your own figure.

For FY 2026-27, the new regime is the default. It taxes nothing up to ₹4 lakh and has slabs rising to 30% above ₹24 lakh, with a ₹75,000 standard deduction for salaried employees and a Section 87A rebate that makes tax nil up to ₹12 lakh of taxable income. In practice a salary up to ₹12.75 lakh pays no income tax in the new regime.

The old regime still allows deductions such as 80C, 80D and HRA, but you need large deductions for it to win at most salary levels. Read old vs new tax regime and Section 87A, and test your own numbers in the Income Tax Calculator. For a side-by-side view, see the regime comparison.

Your employer deducts TDS and issues Form 16 after the year ends. Even if your tax is nil, filing an income tax return helps with loans, visas and refunds of any excess TDS. The usual due date for individuals without audit is 31 July after the financial year, though it can be extended. Verify dates on the income tax portal.

Once the basics are in place, set up a small automatic investment. Even ₹2,000 a month in a SIP builds a habit, and the investing for beginners guide explains where to start.