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CTC (Cost to Company) is the total amount a company spends on an employee, including employer PF contribution, gratuity, and other benefits. Take home salary (in-hand salary) is what you actually receive after deductions like employee PF, professional tax, and income tax. Typically, take home salary is 65-75% of CTC depending on salary structure and tax liability.

Basic salary is typically 40-50% of CTC, though this varies by company policy. A higher basic means higher PF contribution and retirement benefits but also higher tax liability. Some companies keep basic at 40% to reduce PF deductions and increase take home salary. The ideal basic percentage depends on your financial goals and tax planning strategy.

Common deductions include: Employee PF contribution (12% of basic, max ₹1,800/month for basic up to ₹15,000), Professional Tax (varies by state, max ₹2,500/year), Income Tax (TDS based on tax slab), ESI (if applicable for salary up to ₹21,000), and voluntary deductions like VPF. These deductions can reduce gross salary by 20-35%.

The new tax regime (FY 2025-26) offers lower tax rates but no deductions except standard deduction of ₹75,000. Choose the old regime if you have significant deductions like home loan interest (80C up to ₹1.5L), HRA, NPS (80CCD), medical insurance (80D). Generally, if total deductions exceed ₹3-4 lakhs, old regime may be better.

Employee PF contribution is 12% of basic salary. If basic exceeds ₹15,000/month, PF is calculated on ₹15,000 (₹1,800/month) unless you opt for PF on actual basic. Employer also contributes 12% - of which 8.33% goes to EPS (Pension) and 3.67% to EPF. PF contributions are tax-free up to ₹2.5 lakhs per year under the new rules.