CTC vs In-Hand Pay for 4 LPA: What’s the Difference?
Confused between CTC and in-hand pay? Learn the difference between 4 LPA CTC and in-hand salary, deductions, tax impact, and real monthly take-home.
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When you receive a job offer mentioning a 4 LPA package, it sounds impressive. But many professionals are surprised when their first salary credit is much lower than expected. That’s because CTC and in-hand salary are not the same.
Understanding the difference between 4 LPA CTC and in-hand salary is essential for budgeting, financial planning, and making smart career decisions.
Let’s break it down in simple terms.
What Does 4 LPA CTC Mean?
CTC (Cost to Company) is the total amount your employer spends on you in a year. It includes more than just your monthly salary.
A typical 4 LPA CTC may include:
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Basic salary
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House Rent Allowance (HRA)
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Special allowance
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Employer’s PF contribution
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Gratuity
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Insurance benefits
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Bonuses (if any)
Not all of these components are paid to you monthly.
What Is In-Hand Salary?
Your in-hand salary is the actual amount you receive in your bank account every month after deductions.
It is calculated as:
Gross Salary – Deductions = In-Hand Salary
Deductions usually include:
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Provident Fund (PF)
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Income tax
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Professional tax
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Other company-specific deductions
This is why your 4 LPA CTC in hand salary is always lower than what the offer letter shows.
Why Is In-Hand Salary Lower Than CTC?
Many parts of CTC are either future benefits or indirect perks. Here’s how your salary reduces:
1. Provident Fund (PF)
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12% of your basic salary is deducted
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Your employer also contributes, but that part is not paid to you
2. Income Tax
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Depends on your tax regime (old/new)
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Depends on deductions and exemptions
3. Professional Tax
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Small state-level deduction (where applicable)
4. Gratuity
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Included in CTC
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Paid only after 5 years of continuous service
5. Insurance & Benefits
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Useful, but not cash in hand
Estimated 4 LPA CTC In-Hand Salary
On average, a 4 LPA CTC in hand salary ranges between:
? ₹24,000 to ₹28,000 per month
This depends on:
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Salary structure
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Tax regime
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PF contribution
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State deductions
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Benefits included
Old vs New Tax Regime: Which Affects In-Hand More?
Old Tax Regime
Better if you:
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Claim 80C deductions
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Have HRA
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Invest regularly
New Tax Regime
Better if you:
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Don’t claim deductions
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Want simple tax calculation
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Prefer higher monthly cash
Choosing the right regime can increase your in-hand salary.
Why Understanding CTC vs In-Hand Matters
Knowing the difference helps you:
✔ Avoid disappointment
✔ Plan monthly expenses
✔ Save smartly
✔ Compare job offers correctly
✔ Negotiate better
Never accept a job based only on CTC—your lifestyle depends on your in-hand salary.
How to Calculate Your Exact In-Hand Salary
To know your real take-home, consider:
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Basic salary percentage
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PF rules
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Income tax slab
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Regime selection
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State professional tax
Using a salary calculator can give you a precise figure.
Final Thoughts
A 4 LPA package may look good on paper, but what really matters is how much you take home every month. Understanding the difference between 4 LPA CTC and in-hand salary helps you make smarter financial and career decisions.
Always focus on your real monthly income, not just the CTC.
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