Salaries: The service sector in India is very large and most of the population in urban areas works in the service sector. Most of the people working in the service sector get monthly income. But do you know what deductions are made in your salary and what is your in-hand salary and CTC salary? Today we will try to answer these questions of yours.
Salaries: After agriculture in India, if there is any sector that strengthens the country’s economy, then it is the service sector. Most of the people in the service sector get monthly income. But many people do not know the difference between their monthly earnings and annual earnings. In relation to salary, you must have often heard words like CTC and in-hand salary or gross pay and net pay. But what do these words mean? What is the difference between CTC and in-hand salary? Today we will try to answer these questions of yours and will also explain salary calculation to you.
Gross Pay Vs Net Pay
CTC is also called gross pay and monthly earnings are called net pay. CTC or gross pay is your annual earnings from which tax and other types of deductions (PF, gratuity etc.) have not been made. CTC also includes other facilities provided by the company. The salary that is given to you every month after deducting PF, gratuity and tax from CTC is called your net salary. Now you know the difference between CTC and in-hand salary. Let us now tell you how your salary is calculated?
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Calculate your salary like this
To calculate your in-hand salary, you first have to find out what deductions are made from your salary and what allowances you get? For example, the deductions usually made include tax, PF and gratuity. On the other hand, the allowances given to employees also include HRA, DA and annual bonus. Deduct tax from your salary as per the tax slab, deduct 12% of the basic salary as PF and take out gratuity. After this, add the HRA, DA and other allowances received monthly to your basic salary. The amount that comes to you after its calculation will be your net salary.
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