The initial ₹23.5 LPA annual salary figure seems desirable yet your actual monthly payment called in-hand salary generally differs substantially. Multiple employer deductions including income tax and provident fund payments and professional tax reduction result in the final pay amount. This article presents a simple explanation combined with detailed tables for understanding the information.
Annual Salary Overview
For a ₹23.5 LPA CTC (Cost to Company) package the key components need clarification. The Cost to Company represents the complete employee expense paid by a company while encompassing numerous intangible employee benefits.
| Component | Amount (₹) |
| CTC (Annual) | 23,50,000 |
| Monthly CTC | 1,95,833 |
Typical CTC Structure
Companies generally divide CTC into multiple parts. Here’s a common structure:
| Component | % of CTC | Annual (₹) | Monthly (₹) |
| Basic Salary | 40% | 9,40,000 | 78,333 |
| House Rent Allowance (HRA) | 20% | 4,70,000 | 39,166 |
| Special Allowance | 30% | 7,05,000 | 58,750 |
| Provident Fund (Employer) | 12% of Basic | 1,12,800 | 9,400 |
| Gratuity | 4.81% Basic | 45,221 | 3,768 |
| Total CTC | — | 23,50,000 | 1,95,833 |
Employer vs Employee Contribution
Note: The employer’s contribution to PF and Gratuity is part of CTC, but it is not part of in-hand salary. Similarly, employee’s contribution to PF is deducted from the basic salary.
| Contribution | Monthly (₹) | Annual (₹) |
| Employee PF (12% of Basic) | 9,400 | 1,12,800 |
| Employer PF | 9,400 | 1,12,800 |
| Gratuity | 3,768 | 45,221 |
Taxable Income Calculation
Let’s now calculate the taxable income based on the income tax slabs for FY 2024-25 under the new tax regime.
| Component | Amount (₹) |
| Gross Salary | 23,50,000 |
| Standard Deduction | -50,000 |
| Taxable Income | 23,00,000 |
Income Tax Calculation (FY 2024-25 – New Tax Regime)
| Slab Range | Tax Rate | Tax Amount (₹) |
| 0 – 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 – 23,00,000 | 30% | 2,40,000 |
| Total Tax Before Cess | — | 3,90,000 |
| Health & Education Cess (4%) | — | 15,600 |
| Total Tax Payable | — | 4,05,600 |
Monthly TDS Deduction
| Component | Amount (₹) |
| Annual Tax Liability | 4,05,600 |
| Monthly TDS | 33,800 |
Final Monthly In-Hand Salary
Let’s now put everything together to find the in-hand salary after tax and PF deductions:
| Component | Monthly (₹) |
| Monthly CTC | 1,95,833 |
| Less: Employer PF & Gratuity (Excluded from in-hand) | -13,168 |
| Gross Pay | 1,82,665 |
| Less: Employee PF | -9,400 |
| Less: TDS (Income Tax) | -33,800 |
| Final In-Hand Salary | ₹1,39,465 |
Annual In-Hand Salary
So, for a CTC of ₹23.5 LPA, you get an annual in-hand salary of around ₹16.7 LPA, after standard deductions and taxes.
| Component | Amount (₹) |
| Monthly In-Hand | 1,39,465 |
| Annual In-Hand | 16,73,580 |
Summary of Key Figures
| Category | Amount (₹) |
| CTC | 23,50,000 |
| Tax Payable | 4,05,600 |
| PF Deduction (Employee) | 1,12,800 |
| In-Hand Salary (Annual) | 16,73,580 |
| In-Hand Salary (Monthly) | 1,39,465 |
Tips to Increase In-Hand Salary
- Opt for tax-saving allowances like food coupons, fuel cards, or phone reimbursements if available in your organization.
- Choose the right tax regime: Sometimes the old regime (with exemptions) may be better if you have home loans or insurance.
- Utilize Section 80C by investing in ELSS, PPF, NPS, or life insurance.
- Negotiate CTC structure: Ask HR to shift part of the special allowance to tax-free benefits.
Is 23.5 LPA Good in India?
Yes. It places you in the top 5% of earners in India. Here’s a rough idea:
| Salary Range (INR) | Position |
| 2-5 LPA | Entry-Level/Freshers |
| 6-10 LPA | Mid-Level Professionals |
| 15-20 LPA | Senior Developers/Managers |
| 23.5 LPA | Senior Manager/Tech Lead |
Final Thoughts
The ₹23.5 LPA salary amount offers impressive earnings but your actual bank deposit becomes lower because of income tax and various deductions. Financial planning supported by appropriate tax selection and negotiating your Compensation Taxable Income will lead to maximum take-home amounts.
Having insight into your salary formation enables you to create better financial plans while allowing you to make smarter negotiations.
FAQs
How much is the in-hand salary for 23.5 LPA in India?
The actual salary amount amounts to ₹1,39,465 per month after applying deductions for both taxes and PF.
How much tax is deducted from 23.5 LPA?
A total of ₹4,05,600 annual deduction exists for income tax under the new tax system.
Is PF included in the in-hand salary?
CTC includes both worker PF contributions and employer PF contributions yet the employee receives no deductions on those amounts.
Can I increase my in-hand salary from 23.5 LPA?
Your monthly income will increase through CTC remodeling combined with 80C investments and reimbursement deductions.
Which tax regime is better for 23.5 LPA?
Tax obligations depend on how much you are exempted and how many deductions apply to your situation. The new taxation system works easily yet the older system will bring better advantages to those with home mortgages and insurance policies.
