Understanding Your Take-Home Salary in TCS from a CTC of 11.5 Lakhs

When you receive an offer letter with a Cost to Company (CTC) of 11.5 lakhs from Tata Consultancy Services (TCS), you may wonder, What will be my take-home salary? This article will break down the various components of your CTC and the deductions involved, providing a clear understanding of what to expect in terms of your take-home salary.

Components of CTC

Basic Salary:Usually around 40-50% of the CTC. For an estimate, let's consider it to be 50% of 11.5 lakhs, which amounts to 5.75 lakhs. House Rent Allowance (HRA):Typically around 50% of the basic salary. Therefore, HRA would be 5.75 lakhs x 50% 2.875 lakhs in a metro city. Provident Fund (PF):Generally 12% of the basic salary, which means 5.75 lakhs x 12% 69,000. Variable Pay:May be a part of the CTC but it is not guaranteed. Other Allowances:Such as medical insurance, travel, etc., which are part of your total package but can vary widely.

Deductions

Provident Fund (PF):A mandatory 12% deduction of your basic salary, which is 69,000. Professional Tax:Varies by state but is generally around 2,500 annually. Income Tax:Depends on the applicable tax slab after all deductions have been made. For the fiscal year 2023-24, the tax slabs are as follows: Up to 2.5 lakhs: No tax 2.5 lakhs to 5 lakhs: 5% 5 lakhs to 10 lakhs: 20% Above 10 lakhs: 30%

Calculation Steps

To calculate the take-home salary, follow these steps:

Step 1: Calculate the Basic Salary

50% of the CTC of 11.5 lakhs is 5.75 lakhs.

Step 2: Calculate the House Rent Allowance (HRA)

50% of the basic salary, so 2.875 lakhs.

Step 3: Calculate the Provident Fund Contributions

12% of the basic salary, which is 69,000.

Step 4: Calculate Professional Tax

Approximately 2,500 annually.

Step 5: Estimate Income Tax

Based on the applicable slabs calculated as follows:

Gross Salary: 5.75 lakhs (Basic) 2.875 lakhs (HRA) 1 lakh (other allowances) 9.625 lakhs. Total Deductions: 69,000 (PF) 2,500 (Professional Tax) 57,500 (Income Tax) 129,000.

Estimated Take-Home Calculation

Gross Salary:9.625 lakhs (Basic HRA Other allowances).

Total Deductions:69,000 (PF) 2,500 (Professional Tax) 57,500 (Income Tax) 129,000.

Take-Home Salary:9.625 lakhs - 1.29 lakhs 8.335 lakhs annually.

Monthly Take-Home:8.335 lakhs / 12 ≈ 69,458.

Conclusion

The estimated monthly take-home salary for a CTC of 11.5 lakhs in TCS is approximately 69,458. This is a rough estimate, and actual figures may vary based on specific allowances, tax-saving investments, and other factors.