What is the in-hand salary for 12 LPA?
A CTC of ₹12,00,000 (12 LPA) gives you roughly ₹85,387 per month in hand under the New Regime for FY 2026-27, assuming a standard structure (50% basic, employer PF and gratuity included in CTC, ₹2,500/year professional tax). That's about 85% of your CTC reaching your bank account.
New Regime
₹85,387
per month in hand
| Gross taxable earnings | ₹10,99,140 |
| Taxable income | ₹10,24,140 |
| Total tax (incl. cess) | ₹0 |
| Employee PF | − ₹72,000 |
| Professional tax | − ₹2,500 |
| Annual in-hand | ₹10,24,640 |
Old Regime
₹76,033
per month in hand
| Gross taxable earnings | ₹10,99,140 |
| Taxable income | ₹9,77,140 |
| Total tax (incl. cess) | ₹1,12,245 |
| Employee PF | − ₹72,000 |
| Professional tax | − ₹2,500 |
| Annual in-hand | ₹9,12,395 |
At 12 LPA, the New Regime saves you ₹1,12,245 per year versus the other regime.
Monthly salary breakdown (New Regime)
| Monthly gross (taxable earnings ÷ 12) | ₹91,595 |
| Employee PF | − ₹6,000 |
| Income tax (incl. cess) | − ₹0 |
| Professional tax | − ₹208 |
| Monthly in-hand | ₹85,387 |
What 12 LPA actually means
The ₹12 lakh headline is about taxable income, not about your CTC.
This bracket covers anyone who read "₹12 lakh is now tax free" in the Budget coverage and wants to know if it applies to them.
This is the most misunderstood number in Indian personal finance, and it is worth being precise. The Budget headline said income up to ₹12 lakh is effectively tax free under the new regime. That limit applies to your taxable income: what is left after the standard deduction, and after the parts of your CTC (the employer PF share, the gratuity provision) that were never really your income to begin with.
A ₹12 LPA CTC produces a taxable income comfortably below ₹12 lakh. So yes, the headline applies to you, and your income tax is zero. But the more useful takeaway runs the other way: because of that gap, packages meaningfully larger than ₹12 LPA also pay zero tax. The rebate reaches further up the CTC ladder than its name suggests.
Do not let anyone convince you that a ₹12 LPA offer is "right at the tax limit" and therefore not worth taking. It is not at the limit. There is real room above it.
Your income tax at 12 LPA is zero
Under the new regime your taxable income works out to ₹10,24,140, which sits within the ₹12,00,000 Section 87A rebate limit, so the entire tax is rebated away. You have ₹1,75,860 of taxable headroom left before the rebate stops applying. A bonus, a raise, or interest income can eat into that.
Watch out: CTC is not taxable income, and the difference is large
People turn down raises or restructure offers because they believe crossing ₹12 LPA of CTC triggers tax. It does not. The threshold is on taxable income, which is substantially lower than your CTC.
Your structure is different?
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Calculate for your exact CTC →How this 12 LPA breakdown works
Out of the ₹12,00,000 CTC, the employer's PF contribution (₹72,000) and the gratuity provision (₹28,860) never reach your monthly pay, leaving gross taxable earnings of ₹10,99,140. From that, your own PF contribution (₹72,000), professional tax (₹2,500) and income tax are deducted to arrive at your in-hand salary.
Under the new regime, a ₹75,000 standard deduction applies and taxable income up to ₹12 lakh is fully rebated under Section 87A. Under the old regime, you get a ₹50,000 standard deduction plus 80C credit for your employee PF, and potentially much more if you claim HRA or other investments, which this standard estimate doesn't include. If you pay rent, check your HRA exemption before choosing a regime.
Frequently asked questions
What is the monthly in-hand salary for 12 LPA?
A 12 LPA CTC gives approximately ₹85,387 per month in hand under the New Regime for FY 2026-27, assuming a standard structure (50% basic, employer PF and gratuity inside CTC). That is about 85% of CTC reaching your bank account.
How much income tax do I pay on 12 LPA?
Under the new regime, income tax on a 12 LPA CTC is zero, because taxable income stays within the ₹12 lakh Section 87A rebate limit. Under the old regime (without HRA/80C beyond PF) you would pay ₹1,12,245 per year.
12 LPA: should I pick the new or old tax regime?
With a standard salary structure and no large deductions, the New Regime is better at 12 LPA, and it saves ₹1,12,245 per year. The old regime can still win if you claim substantial HRA, 80C, and home-loan interest, so compare with your actual deductions.
How much PF is deducted from a 12 LPA salary?
With a 50% basic (₹6,00,000 a year), your employee PF contribution is ₹72,000 per year (₹6,000 a month). Your employer contributes a similar amount inside your CTC, which builds your retirement corpus but never appears in your monthly pay.
Why is my in-hand salary lower than 12 LPA ÷ 12?
Because CTC includes money you never receive monthly: the employer PF contribution (₹72,000), gratuity provision (₹28,860), and then income tax, your own PF, and professional tax are deducted. ₹1,00,000 of "CTC per month" becomes ₹85,387 in hand.
Is 12 LPA completely tax free under the new regime?
On a standard salary structure, yes: your income tax works out to zero. But the ₹12 lakh limit in the Budget refers to taxable income, not CTC. Since your CTC includes employer PF and gratuity that are not taxed as your salary income, and you also get the standard deduction, your taxable income lands well under the limit.
What CTC actually crosses the ₹12 lakh tax-free limit?
On the standard assumptions used here, the zero-tax stretch runs several brackets above ₹12 LPA, and the first bracket to owe anything meaningful pays only a token amount because of marginal relief. Use the calculator with your real basic percentage and bonus to find your own crossover, since the structure of your offer moves it.