A 10 LPA (Lakhs Per Annum) salary is a significant marker of successful professional growth in India. But it’s important to note that you don’t get the full sum as take-home pay. Various deductions and tax components also play a bigger role in deciding the difference between Cost to Company (CTC) and in-hand salary. In this article, you will get a detailed breakdown of a 10 LPA Salary for the financial year 2025-26 under the Old and New Tax Regime.
What is CTC (Cost to Company)?
CTC is the total cost of an employee that the company incurs in a year. It’s a holistic number that’s made up of a variety of elements, not all of which is included in the take-home pay.
It encompasses various components, including:
· House Rent Allowance (HRA): An allowance provided to cover the cost of housing expenses, which can vary depending on a location.
· Bonus/Variable Pay: Effects-based incentives, not necessarily constant month by month.
· Special allowances: Allowances that employers give for certain purposes.
· Provident Fund (PF): Retirement fund contributions of the employee and employer.
· Gratuity: A one-time payment by the employer in recognition of long term service.
CTC Breakdown of 10 LPA
| Component | Annual (₹) | Monthly (₹) |
| Basic Salary | 4,00,000 | 33,333 |
| HRA | 1,60,000 | 13,333 |
| Special Allowance | 3,00,000 | 25,000 |
| Bonus/Variable | 1,00,000 | 8,333 |
| PF (Employer Part) | 40,000 | 3,333 |
| Gratuity | 20,000 | 1,667 |
| Total CTC | 10,00,000 | 83,333 |
Difference Between Gross, Net & In-Hand Salary
Gross Salary: The total amount paid to an employee before any deductions. It consists of Basic Salary, HRA, Special Allowance, and different Allowances excluding employer contributions like PF and Gratuity.
Net Salary: It is referred to the take home salary you get after taxes (ex: Income tax) or other deductions (ex: Employee provident fund) paid.
In Hand Salary: The money credited to the Employee’s account after all deductions such as taxes, Provident Fund, Professional Tax (PT) etc.
Old vs New RegimeIncome Tax Slabs for FY 2025-26
Tax slabs are significant in estimating tax liabilities. According to Union Budget 2025, the tax slabs are as follows:
| Income Tax Slabs (₹) | New Regime Rates (%) | Old Regime Rates (%) |
| Up to ₹4 lakhs | Nil | Nil |
| ₹4 lakhs – ₹8 lakhs | 5% | 5% |
| ₹8 lakhs – ₹12 lakhs | 10% | 20% |
| ₹12 lakhs – ₹16 lakhs | 15% | 30% |
| Above ₹16 lakhs | 20%-30% | 30% |
Old Regime provides various exemptions and deductions like those under Section 80C, 80D, HRA etc which are not available in New Regime.
Deductions From Salary
These are specific amounts deducted from your gross salary to calculate taxable salary or net in-hand salary. Such deductions are classified into statutory contributions, taxes, and benefits. Here you go, a detailed break of common deductions for salaried individuals in India for FY 2025-26:
Employee Provident Fund (EPF) —
Employees contribute 12% of their Basic Salary against EPF.
Professional Tax (PT)
Calculation: State-dependent but generally a nominal fixed amount with reference to salary slabs.
Applicable by: Some state governments on all employees.
Health Insurance Premiums
There are employers that provide health insurance plans with premium deductions from salary.
Gratuity
Not a typical deduction but relate to the first five years of uninterrupted service.
In-Hand Salary Calculation (Both Regimes)
Old Regime Calculation
Deductions:
· Standard Deduction: ₹75,000
· EPF (Employee Contribution): ₹48,000
· Taxable Income = ₹9,40,000 – ₹75,000 – ₹48,000 = ₹8,17,000
Monthly Deductions:
· Income Tax = ₹78,936 / 12 = ₹6,578
· EPF = ₹48,000 / 12 = ₹4,000
· Professional Tax = ₹200
Total Monthly Deduction = ₹10,778
Monthly In-Hand Salary = ₹78,333 – ₹10,778 =₹67,555
Annual In-Hand = ₹67,555 × 12 = ₹8,10,660
New Regime Calculation (FY 2025–26)
Deductions:
· Standard Deduction = ₹75,000
· No 80C/80D deductions (except EPF)
· EPF (Employee Contribution): ₹48,000
· Taxable Income = ₹9,40,000 – ₹75,000 = ₹8,65,000
Monthly Deductions:
· Income Tax = ₹43,160 / 12 = ₹3,597
· EPF = ₹4,000
· Professional Tax = ₹200
Total Monthly Deduction = ₹7,797
Monthly In-Hand Salary = ₹78,333 – ₹7,797 = ₹70,536
Annual In-Hand = ₹70,536 × 12 = ₹8,46,432
How Take-Home Salary Is Calculated
There are several elements that determine your take-home pay:
· Increases in variable pay components like bonuses.
· Residential city affects Health Risk Assessment exemptions.
· Investments that save tax under Sections such as 80C and NPS.
· EPF and insurance contribution plans as per company policy.
How to Maximize In-Hand Salary?
Maximizing your in-hand salary involves strategic planning and optimization of your salary structure. Here are several strategies to help you retain more of your earnings:
Tax-Saving Investments
Section 80C Deductions:
Your investment in the Public Provident Fund (PPF), National Savings Certificate (NSC), Equity Linked Savings Scheme (ELSS) etc can provide you deductions of up to ₹1.5 Lakhs.
Section 80D For Health Insurance
Deduct health insurance premiums you pay for yourself and your family.
Salary Restructuring
Optimize Allowances:
Enhance tax-exempt components such as House Rent Allowance (HRA), Leave Travel Allowance (LTA), and medical reimbursements. These accounts can lower your taxable income considerably.
Reduce Basic Salary:
Reducing the basic pay can reduce tax liability, just be sure that this will not hurt your PF contributions.
Conclusion
Knowledge about what a 12 LPA package means, is important for maximum financial planning, as well as maximizing what an individual gets in-hand in a month. The difference between CTC and in-hand salary, taxation and deductions, and city-wise variations are some of the major factors that affect the take-home pay.
With the Indian economy undergoing dynamics, tax policies and the salary structure also keep changing. As the saying goes, knowledge is power; staying informed of any changes to the tax laws and knowing how you can take advantage of available deductions can set you on the right path toward financial stability! For specific insights tailored to your financial situation, consult a tax advisor.
FAQ’s
How much is the monthly take-home salary for a ₹10 LPA package?
The post also provided the monthly take-home salary in the case of both the old and new tax regimes with standard deductions — ranging from ₹67,900 to ₹69,100.
Is a ₹10 LPA salary in FY 2025 good after tax?
Depending on the tax regime opted and exemptions allowed, annual tax deductions will range between ₹60,000 and ₹75,000.
I have a salary of ₹10 LPA. Which tax structure is good for me?
Then the old regime is probably better if you’re eligible for deductions such as HRA and Section 80C benefits. The new regime, otherwise, offers lower tax rates.
During a financial year, can I choose both tax regimes?
No, you can switch tax regimes only once in a financial year while filing your income tax return.
What is HRA and how will it affect my take-home salary?
If you pay rent HRA can help reduce the taxable income which would reduce TDS thus increasing take home salary.
Can I negotiate for what structure my salary is in with my employer?
Yes, legally your employer cannot deny you from optimizing the salary structure for higher allowances or benefits that are tax-efficient.
How do I maximise what I take home in my salary?
By selecting the most beneficial tax regime, making investments in tax-saving instruments, and choosing flexible benefit plans you can take home the highest salary.
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