26 LPA In-Hand Salary Breakdown After Tax, PF & Deductions

When an individual gets a job offer which comes with a fixed package of ₹26 LPA (approximately 26 Lakhs Per Annum), he/she might ponder the following question:  

“What is the amount that will come to my account each month?”  

The question is more complex than one would think, given that the actual salary to one’s hand is impacted by many considerations like income tax, PF (Provident Fund), Professional Tax (PT), and several other deductions. I attempt to explain all this with simple English in this article along with some tables to assist.  

What is Fixed CTC?  

A fixed CTC (Cost to Company) means the whole ₹26,00,000 is given as a salary without including bonuses or incentive payments which are variable in nature. It includes:  

• Main Salary
• House Rent Allowances (HRA)
• PF (Employer’s Contribution) & (Employee’s Contribution)
• Gratuity
• Other Allowances   

Variable as well as fixed allowances are all combined included with the CTC. However, that does CTC ≠ Take-home salary. Let us understand how.

Step-by-Step Breakdown of ₹26 LPA

Let’s calculate your in-hand salary step by step, assuming a standard salary structure used by most companies.

Split of the ₹26 LPA Fixed CTC

Note: The employer’s PF contribution is part of your CTC but is not part of your in-hand salary.

Deductions to Consider

a. Provident Fund (Employee Contribution)

12% of Basic = 12% of ₹13,00,000 = ₹1,56,000

b. Professional Tax (PT)

PT depends on your state. We’ll assume ₹2,500 annually.

c. Income Tax

This depends on the income tax slab. We’ll use the old regime here as it allows exemptions like PF, HRA, etc.

Income Tax Calculation for FY 2023-24

We first deduct PF and PT from the gross salary to find the taxable income:

Taxable Income

Tax Calculation (Old Regime)

Final In-Hand Salary Calculation

Net Annual Salary

Monthly In-Hand Salary

₹19,96,550 ÷ 12 = ₹1,66,379 approx.

Summary Table

What If You Choose the New Tax Regime?

The new regime removes most exemptions (like HRA, PF) but offers lower tax rates. Here’s the new regime slab:

If you opt for the new regime, your tax could reduce, but you can’t claim HRA, PF, or other deductions. Always compare both regimes before filing.

Tips to Increase In-Hand Salary

1. Invest in Tax-Saving Instruments
   Use Section 80C, 80D, and HRA benefits (if under old regime).
2. Opt for Meal/Transport Allowance
   These are tax-free in many companies.
3. Negotiate Structure, Not Just CTC
   A better structure can reduce deductions.
4. Submit Tax Declarations Early
   Declare your investments to avoid excess monthly tax deductions.

Conclusion 

Understanding your in-hand salary is crucial before accepting any job offer. While ₹26 LPA sounds impressive on paper, your actual monthly take-home is approximately ₹1.66 lakh, depending on tax regime, PF, and deductions. Always review your salary breakup, compare tax regimes, and plan investments to maximize your in-hand income. Knowing the structure helps you make smart financial decisions and avoid surprises in your payslip.

FAQs

Is the employer’s PF contribution included in the in-hand salary?

No. It’s part of your CTC, not your monthly take-home.

Can I get more in-hand salary under the new regime?

Yes, but only if you don’t have many deductions to claim.

Will bonuses be included in this ₹26 LPA?

No, this is a fixed CTC. If there were bonuses, they’d be on top of ₹26 LPA.

How much tax will be deducted monthly?

Roughly ₹45,000 per month as per old regime unless declared exemptions reduce it.