“CTC Illusion: Why Your ₹12 Lakh Job Offer Feels Like Just ₹70K a Month”—CA Explains

A viral message from a Chartered Accountant is sparking conversations across India’s professional circles: “Your CTC is lying to you!” The post breaks down why a ₹12 lakh Cost to Company (CTC) offer often leaves new hires with a take-home salary that feels underwhelming—sometimes as low as ₹70,000 per month after deductions.

 

Key Highlights:

 

•⁠  ⁠CTC vs. Take-Home Reality: CTC is the total annual cost your employer incurs—not your salary. It includes benefits, allowances, employer PF, and even some non-cash perks, but your take-home is the cash you actually receive.

 

•⁠  ⁠Deduction Impact: Mandatory deductions like EPF (12% of basic), income tax, and professional tax can reduce your take-home pay by 30–40% or more, depending on your salary structure.

 

•⁠  ⁠Tax Slabs & Rebates: Under the new tax regime, you may pay little to no tax on a ₹12 lakh CTC if your taxable income is below ₹12.75 lakh after deductions and rebates. However, many employees still see a significant gap between CTC and in-hand pay due to PF and other deductions.

 

•⁠  ⁠Negotiation Tips: CAs advise negotiating for higher basic pay and allowances, as these directly impact your take-home, unlike many benefits included in CTC.

 

Outlook:

Understanding the difference between CTC and take-home salary is crucial for financial planning and salary negotiations. Next time you get a job offer, look beyond the headline CTC—it’s the in-hand amount that truly defines your lifestyle and savings.

 

Sources: LinkedIn, ClearTax, EnKash