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

It is undoubtedly wonderful to take home a pay packet of 21.5 LPA (Lakhs Per Annum), which firmly places you in India’s high-income bracket and reflects the worth of your skills and abilities.  Nevertheless, it is common for employees to notice a wide disparity between their in-hand monthly salary and their reported CTC (Cost to Company).

This is why it’s important to understand the exact composition of a 21.5 LPA package.  The salary structure is well discussed in this article, which also discusses tax liabilities, mandatory deductions such as Provident Fund (PF), and other regulatory donations.  By breaking down every element, we hope to present an honest and transparent image of what your take-home pay per month should be.

Understanding 21.5 LPA: What Does It Include?

21.5 LPA indicates that your yearly Cost to Company (CTC) is ₹21.5 lakhs. CTC is a general phrase that includes all of the money your company spends on you.

• The base pay
• HRA, or House Rent Allowance
• Special provisions
• Employer-sponsored Provident Fund
• A gratuity
• Rewards (for joining, staying, or performing)
• Additional benefits (such as insurance or food vouchers)

It is crucial to keep in mind the CTC ≠ in-hand wage. Many of the components are either non-cash perks or are subtracted from your income before it is paid.

Typical Salary Structure of 21.5 LPA

Assume the following typical compensation breakdown for a 21.5 LPA package:

What’s Deducted From Your Salary?

Now, when we look at the main deductions, to understand your hands-on salary.

a. Provident Fund (PF)

• Employee PF contribution: 12% of basic salary.
• For ₹8,60,000 basic salary:

12% × ₹8,60,000 = ₹1,03,200 annually (₹8,600/month).

b. Professional Tax

Varies by state.

• E.g., in Maharashtra: ₹2,500 per year (~₹200/month).

c. Gratuit

This is not linked to CTC but is not paid expensively monthly. It is payable only after 5 years of continuous service, hence it does not effect on monthly in hand salary.

d. Tax Deducted at Source (TDS)

Your employer will deduct income tax as per the respective slab from your income.

4. Income Tax Calculation for 21.5 LPA (FY 2025-26)

Suppose:

• You are subject to the new tax law (as of April 2024).
• You deduct ₹50,000 as a standard deduction.
• No other exclusions or deductions (such as 80C or 80D).

a. Taxable Income

Gross: ₹21,50,000

Common deduction: -50,000

Amount Due: ₹21,000,000

b. Tax Slabs (FY 2025-26)

c. Tax Calculation

• 0% on ₹3 lakh = ₹0
• 5% on ₹3 lakh = ₹15,000
• 10% on ₹3 lakh = ₹30,000
• 15% on ₹3 lakh = ₹45,000
• 20% on ₹3 lakh = ₹60,000
• 30% on ₹6 lakh = ₹1,80,000
  

Total Tax = ₹3,30,000

Add Health & Education Cess (4%):
4% × ₹3,30,000 = ₹13,200

Total Tax Liability = ₹3,43,200 (~₹28,600/month)

5. Total Annual Deductions

6. In-Hand Salary Calculation

We can do this calculation for your annual in-hand salary (annual):

• CTC: ₹21,50,000
• Minus Employer PF & Gratuity: -₹1,44,700

(₹1,03,200 + ₹41,500)

Net Earnings (before deductions): ₹20,05,300

Now subtract:

• Employee PF: -₹1,03,200
• Professional Tax: -₹2,500
• Income Tax: -₹3,43,200

Estimated In-Hand Salary (Annual):

₹20,05,300 – ₹4,48,900 = ₹15,56,400

Monthly In-Hand Salary

₹15,56,400 ÷ 12 ≈ ₹1,29,700/month

Conclusion

However, the salary of 21.5 LPA is great, but once you break it down and understand it, you and make your expectations realistic. Assuming PF and various deductions, you should expect an in-hand salary of somewhere in the range of ₹1.3 lakh every month. As in all things, these numbers will differ depending on your location and tax-saving strategies. It’s always advisable to check your exact Salary structure and also consult a tax expert such that your earnings can be maximized as much as possible.

FAQ’s

What is the amount of in-hand salary for 21.5 LPA?

In-hand salary of a package of 21.5 LPA, after deducting PF, professional tax, and income tax, comes to an average of around ₹1.25 lakh to ₹1.3 lakh per month, provided that your investments are tax-saving and are in the same location.

Hence, what is a tax on a 21.5 LPA salary?

In case of opting for the new tax regime with no additional deductions, the tax liability (including cess) is about Rs 3.4 lakh per year.

The amount of PF deducted from 21.5 LPA?

The basic salary of an employee is 12% of the contribution that goes into the Provident Fund. Typically, your PF deduction from your basic salary of ₹8.6 lakh would come to about ₹1.03 lakh if your salary is ₹8.6 lakh as per a 21.5 LPA package.

The basic salary of a 21.5 LPA package is?

Usually, the basic salary constitutes about 35 percent to 40 percent of the total CTC. That works out to approximately 1.5 lakhs to 1.5½ lakhs per year or 21.5 LPA.

Is the in-hand salary inclusive of the bonuses?

Bono is a part of the CTC but was usually paid as a bonus quarterly or once a year. They are taxed in the hands of the assessee at the applicable slab rate and do not form part of their monthly in-hand salary.