Finding a job that offers 22.5 LPA (Lakhs Per Annum) is an exhilarating achievement, especially in extremely competitive sectors such as banking, consulting, and technology. But even if the top-line CTC (Cost to Company) is great, when your first salary arrives, the reality often proves to be different. The question, “What will my actual in-hand salary be every month?” is one that many professionals have. We will break down a 22.5 LPA salary in this article, considering taxes, PF (Provident Fund), and other common deductions, so that you can understand how much money you earn.
What Does 22.5 LPA Mean?
Your gross yearly pay is ₹22,50,000 if you have a 22.5 LPA.
This represents your CTC, which typically consists of:
- Base pay
- Allowance for House Rent (HRA)
- Extra allowances
- Extras
- Contributions to the Provident Fund (including employer and employee portions)
- Gratuity and other advantages
The catch? Your in-hand pay is not CTC. Your real take-home pay is decreased by a number of deductions.
Basic Salary Structure (Example)
Although pay scales differ from business to business, let’s assume a common breakdown:
| Component | % of CTC | Amount (₹) |
| Basic Salary | 40% | 9,00,000 |
| House Rent Allowance (HRA) | 20% | 4,50,000 |
| Special Allowance | 30% | 6,75,000 |
| Provident Fund (Employer) | 12% of Basic | 1,08,000 |
| Gratuity + Other Benefits | 4% | 90,000 |
| Total CTC | 22,50,000 |
Provident Fund (PF) Deductions
Employee PF: 12% of base pay
- 12% of ₹9,000,000 = ₹1,08,000 per year
- PF deduction per month: about 9,000
Employer PF: 12% of base pay
- Usually included in CTC rather than being added to the in-hand salary..
Professional Tax (PT)
Professional taxes can range from ₹200 to ₹2,500 per month, depending on which state you are in (e.g., Karnataka, Maharashtra). Let’s assume for purposes of this calculation that the typical monthly income is ₹200.
Income Tax Calculation (FY 2025-26)
Assume that you are subject to the new tax law and that there are no exemptions:
| Income Slab | Tax Rate | Tax Amount (₹) |
| Up to ₹3,00,000 | 0% | 0 |
| ₹3,00,001 – ₹6,00,000 | 5% | 15,000 |
| ₹6,00,001 – ₹9,00,000 | 10% | 30,000 |
| ₹9,00,001 – ₹12,00,000 | 15% | 45,000 |
| ₹12,00,001 – ₹15,00,000 | 20% | 60,000 |
| ₹15,00,001 – ₹22,50,000 | 30% | 2,25,000 |
Total tax = ₹3,75,000
Add cess (4% on ₹3,75,000) = ₹15,000
Total tax = ₹3,90,000
Monthly Take-Home Calculation
Annual components:
- Gross CTC: ₹22,50,000
- Employer PF & Gratuity (~₹2,00,000) → Not part of in-hand salary
Employee’s gross salary minus employer PF and gratuity.
- ₹22,50,000 – ₹2,00,000 = ₹20,50,000
Minus:
- Employee PF: ₹1,08,000
- Professional Tax: ~₹2,400
- Income Tax: ₹3,90,000
Total Deductions: ~₹5,00,000
Net in-hand (annually):
₹20,50,000 – ₹5,00,000 = ~₹15,50,000
Monthly in-hand:
₹15,50,000 ÷ 12 ≈ ₹1,29,000
Key Takeaways
- Gross monthly CTC: ~₹1,87,500
- Monthly deductions:
- PF: ~₹9,000
- Tax: ~₹32,500
- PT: ~₹200
- In-hand monthly: ~₹1,29,000
Conclusion
Your after-tax, PF, and deductions pay would ideally be around ₹1.29 lakh per month, even if an in-hand take-home pay is very impressive due to a 22.5 LPA deal. You might push your in-hand pay and use your best-possible returns by being careful with your salary structure and optimizing your taxes.
FAQs
22.5 LPA per month before deductions equals how much?
A: 22.5 LPA (₹22,50,000 per year) equals about ₹1,87,500 per month before any deductions like taxes or provident fund.
What will be the usual in-hand salary for a 22.5 LPA?
A: Your monthly in hand salary will be around ₹1,25,000 to ₹1,35,000 (if you are applying under tax regime and exemptions).
What amount is deducted from the Provident Fund (PF)?
A: But employee PF usually is deducted at 12% of basic salary. For a 22.5 LPA package, that works out to around ₹9,000 per month.
If I go for the old tax regime, then does the in-hand salary change
A: Yes. Take home pay gets worked up if you claim deductions like HRA, 80C (PF, LIC, ELSS), 80D (health insurance).
Does the in-hand salary include bonuses?
A: Bonus usually get paid on CTC basis meaning quarterly or annually and not monthly. Furthermore, the distribution may be also be taxed at a higher rate.
